2019 (7) TMI 1303 - HC - Customs

Non-compliance with the requirement of pre-deposit and penalty - pre-amendment benefit of Section 129E of the Customs Act 1962 - whether the petitioner would be entitled to the benefit of the pre-amended Section 129E of the Customs Act 1962 since the right to file an appeal had accrued prior to the amendment to Section 129E of the Customs Act 1962? HELD THAT - It could be seen that after the amendment the appellant has to deposit 7.5% of the duty in case where duty or duty and penalty are in dispute or penalty whether such penalty is in dispute in pursuance to a decision or an order passed by an officer of customs - There is no provision to waive the pre-deposit of 7.5% on the alleged duty and penalty payable. The amended Section also makes it clear that this Section shall not apply to stay applications and appeals pending before the appellate authority prior to commencement of Finance (Nos.2) Act 2014. Prior to amendment there was a discretion given to the tribunal to dispense with the pre-deposit. A right to appeal is only a statutory right. The right to file an appeal can be hedged by conditions. If the argument of the petitioner is accepted then it would mean that there is a vested right in any appellant to claim the benefit of waiver of pre-deposit. Reading of Section 129E as it stood prior to amendment shows that the appellant before the tribunal would apply to the tribunal for waiver of the entire pre-deposit and it was the discretion of the tribunal whether to waive it or not. Further the proviso to section 129E after amendment does states that the pre-amended section will apply only to appeals. Pending on the commencement of Finance (No.2) Act 2014. Therefore an appeal filed after the amendment should be governed by the old Section The entire Section 129E now stands substituted by the amended Act 25 of 2014. In such a case the appeal would be governed only by the Section which stands on the date when the appeal is sought to be filed - Section 6 of the General Clause Act which deals with repeal cannot be applied to situations where the entire Section has been substituted. Petition dismissed.

Issues Involved:
1. Entitlement to benefit of pre-amended Section 129E of the Customs Act, 1962.
2. Application of Section 6 of the General Clauses Act, 1987 regarding repeal and substitution of statutory provisions.
3. Financial inability and waiver of pre-deposit requirements under amended Section 129E.
4. Validity of confiscation and auction of goods without proper notice.
5. Alleged violations and penalties imposed under the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Entitlement to Benefit of Pre-Amended Section 129E:
The petitioner argued that their right to file an appeal accrued prior to the amendment of Section 129E of the Customs Act, 1962, and thus should be governed by the pre-amended section, which allowed for discretionary waiver of pre-deposit. The court compared the provisions of Section 129E before and after the amendment. The pre-amended section allowed for discretionary waiver of pre-deposit by the tribunal, whereas the amended section mandated a fixed pre-deposit of 7.5% of the duty or penalty. The court concluded that the appeal would be governed by the amended section as it stood on the date the appeal was filed.

2. Application of Section 6 of the General Clauses Act:
The petitioner contended that Section 6 of the General Clauses Act, 1987, which protects rights accrued under repealed enactments, should apply. However, the court noted that the entire Section 129E had been substituted, and therefore, the appeal must be governed by the new provision. The court referenced the case of Dream Castle Vs. Union of India, which held that amendments imposing new conditions for appeals do not take away vested rights but merely change the conditions for exercising those rights.

3. Financial Inability and Waiver of Pre-Deposit Requirements:
The petitioner sought waiver of the pre-deposit requirement due to financial inability, arguing that the amount realized from the auction of confiscated goods should be considered as the pre-deposit. The court held that the amended Section 129E does not provide for waiver of the mandatory pre-deposit and that the tribunal has no discretion to waive it. The court emphasized that the amended section applies to all appeals filed after its enactment, regardless of when the right to appeal accrued.

4. Validity of Confiscation and Auction of Goods Without Proper Notice:
The petitioner claimed that the goods were auctioned without proper notice, which they only became aware of through an RTI reply. The court did not address this issue in detail, focusing instead on the applicability of the amended Section 129E and the requirement for pre-deposit.

5. Alleged Violations and Penalties Imposed:
The petitioner challenged the penalties and duties imposed by the Commissioner of Central Excise, arguing that there were no violations of the EOU Scheme or relevant customs notifications. The court did not delve into the merits of these allegations, as the primary issue was the applicability of the pre-deposit requirement under the amended Section 129E.

Conclusion:
The court dismissed the writ petition, holding that the amended Section 129E of the Customs Act, 1962, which mandates a pre-deposit of 7.5% of the duty or penalty, applies to the petitioner's appeal. The court found no merit in the arguments regarding the applicability of the pre-amended section or Section 6 of the General Clauses Act. Consequently, the connected writ miscellaneous petitions were also closed.

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