2018 (11) TMI 771 - HC - Customs

Maintainability of petition - non-compliance with the full amount of pre-deposit - Held that - It will be unjust, for the petitioner, to undergo, the rigmarole of paying the deficit of ₹ 5 lakhs of pre-deposit for restoration of the appeal, which is the subject matter of the Order-in-Original dated 31.12.2013. That since in an identical appeal, by an order dated 12.09.2017, the CESTAT has remanded the proceedings to the adjudicating authority keeping all issues open, we see no reason why a similar order, be not made, as far as the subject matter of OIO dated 31.12.2013 is concerned. Appeal filed by the petitioner, against such order is deemed to be restored.

Summary

Issues Involved:
1. Legality of the Order-in-Original dated 31.12.2013.
2. Requirement and fairness of pre-deposit conditions imposed by the Tribunal.
3. Jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue show cause notices.
4. Financial hardship and parity in pre-deposit amounts.
5. Remand of proceedings to the adjudicating authority.

Detailed Analysis:

1. Legality of the Order-in-Original dated 31.12.2013:
The petitioner, an owner and partner of M/s. Jay Bhavani Roadlines, challenged the Order-in-Original dated 31.12.2013, which penalized him for allegedly transporting restricted export goods. The Commissioner of Customs, Kandla, imposed penalties under Sections 113(d) and (i) and 114(i) and (AA) of the Customs Act, 1962, totaling ?80 crores. The petitioner sought quashing of this order and remand for fresh adjudication.

2. Requirement and Fairness of Pre-deposit Conditions Imposed by the Tribunal:
The petitioner filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), seeking a stay on recovery and waiver of pre-deposit. The Tribunal directed a pre-deposit of ?80 lakhs (1% of the total penalty). Due to financial hardship, the petitioner could not comply, leading to dismissal of the appeal. Subsequent applications for restoration and modification were partially successful, reducing the pre-deposit to ?10 lakhs. However, the petitioner managed to deposit only ?5 lakhs, resulting in dismissal for non-compliance.

3. Jurisdiction of the Directorate of Revenue Intelligence (DRI) to Issue Show Cause Notices:
One of the arguments was that the DRI lacked jurisdiction to issue show cause notices for periods before the amendment to the definition of "proper officer" on 08.04.2011. The petitioner relied on the Delhi High Court's judgment in Mangali Impex Ltd. vs. Union of India, which questioned the DRI's authority for pre-amendment periods. The Tribunal had previously remanded similar cases to the adjudicating authority due to this jurisdictional issue.

4. Financial Hardship and Parity in Pre-deposit Amounts:
The petitioner argued that in other identical appeals, the Tribunal had required significantly lower pre-deposits (?1 lakh and ?10 lakhs). The petitioner had complied with these lower pre-deposits in similar cases, highlighting the inconsistency and financial hardship in meeting the higher pre-deposit of ?10 lakhs in the present case.

5. Remand of Proceedings to the Adjudicating Authority:
The petitioner sought parity in treatment, referencing an order dated 12.09.2017, where the Tribunal remanded a similar case to the adjudicating authority. The High Court noted that in identical cases, the Tribunal had remanded proceedings due to the pending Supreme Court decision on the jurisdiction issue. The Court found it unjust to require the petitioner to pay the remaining pre-deposit and decided to quash the Order-in-Original dated 31.12.2013. The appeal was restored and remanded to the Commissioner of Customs, Kandla, for fresh adjudication, keeping all issues open.

Conclusion:
The High Court quashed the Order-in-Original dated 31.12.2013 and restored the appeal, remanding the matter to the Commissioner of Customs, Kandla, for fresh adjudication. This decision was based on parity with similar cases, financial hardship, and jurisdictional issues pending before the Supreme Court.