2017 (11) TMI 947 - HC - Customs

Compliance with pre-deposit - rectification of mistake - Held that - in view of the fact that, the final adjudication is yet to happen, it would be appropriate to set aside such portion of the direction contained in the impugned order dated January 5, 2016 passed by CESTAT which requires the petitioner to make a pre-deposit of ₹ 50 lakhs for the adjudication proceedings to be finalized - petition disposed off.

Summary

Issues: Challenge to orders passed by Customs, Excise & Service Tax Appellate Tribunal (CESTAT) - Breach of principles of natural justice - Right to cross-examination - Pre-condition of deposit for appeal consideration - Discrepancy in recording offer amount - Final adjudication pending - Imposition of pre-condition of deposit.

Analysis:
The petitioner challenged two orders passed by CESTAT, alleging a breach of natural justice and denial of the right to cross-examination during adjudication. The petitioner contended that the Adjudicating Officer's actions were in violation of natural justice principles. Additionally, a discrepancy arose regarding the amount offered for deposit as a pre-condition for appeal consideration, with the petitioner claiming to have offered ?5 lakhs, contrary to CESTAT's recording of ?50 lakhs. The petitioner argued that since the quantum was yet to be determined, the demand for an unadjudicated pre-deposit was unjustified.

The Department argued that the petitioner had indeed offered ?50 lakhs as a pre-condition for appeal admission and that the rectification application was rightfully dismissed. The Department insisted on the petitioner complying with the deposit requirement as directed. However, upon reviewing the contentions and evidence, the Court noted that the adjudication of the petitioner's liability was still pending finality due to CESTAT's order remanding the matter for further consideration. Consequently, the Court found CESTAT's imposition of a ?50 lakhs pre-deposit unreasonable, especially since the final quantum was yet to be determined.

The Court emphasized that the petitioner's offer to deposit ?50 lakhs, if made, was likely for appeal admission purposes and should not bind the subsequent adjudication proceedings. Therefore, the Court deemed it appropriate to set aside the portion of CESTAT's order mandating the petitioner to make a pre-deposit for the pending adjudication proceedings. In light of these findings, the Court disposed of the writ petition and made no order as to costs. The parties were instructed to obtain certified copies of the order upon fulfilling the necessary formalities.