2019 (2) TMI 613 - HC - Customs

Requirement with the pre-deposit - Whether the appellate Tribunal committed error of law in dismissing the appeal on the ground of non compliance of stay order despite direction issued by this Court for reconsideration of the stay application in the light of section 129-E of Customs Act, 1952? - Whether the finding recorded by the appellate Tribunal that the appellant is not in a position to deposit the amount in question is perverse in the state of evidence on record especially in view of the fact that the company was declared sick by BIFR? Held that - In the case at hand evidently the Tribunal after considering the entire facts on record, passed the order for directing to deposit ₹ 10 Lacs as a pre-deposit in an appeal against the levy of duty of ₹ 69,22,218/-. The said direction is after taking into consideration the entire facts situation including the hardship to the Appellant and the prejudice to the Revenue - the substantial question of law is answered against the appellant that the Appellate Tribunal was well within his jurisdiction in dismissing the appeal on the ground of noncompliance of stay order and the finding arrived by the Appellate Tribunal, as would warrant any interference. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Whether the appellate Tribunal erred in dismissing the appeal due to non-compliance of stay order despite court direction?
2. Whether the finding of the Tribunal that the appellant could not deposit the amount in question was justified?

Analysis:

Issue 1:
The case involved an appeal under Section 129E of the Customs Act, 1962. The appellant, a company engaged in manufacturing, faced a show cause notice for non-payment of duty on goods consumed during trial production. The appellant was directed to make a pre-deposit of a specific amount. A Writ Petition was filed, directing the appellant to reapply under Section 129-E of the Act. The Tribunal later dismissed a fresh application for waiver of pre-deposit, citing financial hardship not being a criterion for leniency under fiscal statute. The Tribunal issued a show-cause notice for non-compliance, leading to the dismissal of the appeal.

Issue 2:
The appellant sought exemption from pre-deposit due to financial difficulties and being a sick industry. However, the Tribunal rejected this plea, noting the lack of material evidence, such as a bank account statement, to support the claim. The Tribunal, considering the financial situation and previous benefits enjoyed by the appellant, upheld the pre-deposit requirement. The judgment referenced legal principles regarding undue hardship and safeguarding revenue interests in granting waivers. The Court found that the Tribunal's decision to dismiss the appeal for non-compliance with the stay order was justified, given the circumstances and lack of material evidence presented.

In conclusion, the Court upheld the Tribunal's decision, emphasizing the importance of complying with pre-deposit requirements and considering both undue hardship to the appellant and revenue protection. The appeal was dismissed, and no costs were awarded.