2022 (3) TMI 458 - AT - Customs

Non-compliance with the pre-deposit - section 129E of the Customs Act 1962 - HELD THAT - Section 129E of the Customs Act provides that the Tribunal shall not entertain any appeal unless the appellant has deposited 7.5 per cent of duty/penalty. The Customs Act does not provide for waiver of this mandatory deposit before filing appeal. The Supreme Court in NARAYAN CHANDRA GHOSH VERSUS UCO BANK 2011 (3) TMI 1478 - SUPREME COURT , examined the provisions contained in section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 relating to pre deposit in order to avail the remedy of appeal. The provisions are similar to the provisions of section 129E of the Customs Act. The Supreme Court emphasised that when a Statue confers a right to appeal, conditions can be imposed for exercising of such a right and unless the condition precedent for filing appeal is fulfilled, the appeal cannot be entertained. The Supreme Court, therefore, held that deposit under the second proviso to section 18(1) of the Act, being a condition precedent for preferring an appeal, the Appellate Tribunal erred in law in entertaining the appeal. It will also be appropriate to refer to a decision of the Delhi High Court in DISH TV INDIA LIMITED VERSUS UNION OF INDIA AND ORS. 2020 (8) TMI 183 - DELHI HIGH COURT , wherein the requirement of pre-deposit under section 129E of the Customs Act came up for consideration. The High Court held that when the Statue itself has provided wavier of pre-deposit to the extent of 90% or 92.5% of the duty amount and has made it mandatory to deposit 7.5% or 10% of duty amount, as the case may be, the Courts cannot waive this requirement of deposit. As the statutory requirement stipulated under section 129E of the Customs Act has not been satisfied and the application for waiver of deposit has been rejected, the appeal stands dismissed.

Summary

Issues:
Appeal filed under section 129E of the Customs Act to challenge the Commissioner of Customs' order; Application for dispensing with the pre-deposit requirement of 7.5%; Interpretation of section 129E of the Customs Act regarding mandatory deposit for entertaining appeals; Comparison with Supreme Court judgments on similar provisions in other statutes; Delhi High Court's decision on waiver of pre-deposit under section 129E of the Customs Act.

Analysis:
The appeal was filed under section 129E of the Customs Act to challenge the Commissioner of Customs' order, accompanied by an application seeking waiver of the mandatory pre-deposit requirement of 7.5%. The appellant cited financial difficulties due to unemployment and a family member's illness as reasons for seeking the waiver (para 2).

The Department's Authorized Representative contended that section 129E does not allow for the waiver of the mandatory deposit, emphasizing its obligatory nature (para 3). The Tribunal considered the arguments of both parties and examined the provisions of section 129E of the Customs Act (para 4-5).

Citing the Supreme Court's judgment in Narayan Chandra Ghosh vs. UCO Bank and Others, the Tribunal highlighted that when a statute confers a right to appeal, conditions can be imposed for exercising that right. The Court emphasized the mandatory nature of the deposit requirement as a condition precedent for filing an appeal (para 6).

The Tribunal reiterated the principles from the Narayan Chandra Ghosh case in subsequent Supreme Court judgments and a Delhi High Court decision, emphasizing that the law itself provides for a waiver of a significant portion of the duty amount, making the mandatory deposit non-negotiable (para 8).

Ultimately, the Tribunal rejected the appellant's application for waiver of the pre-deposit requirement under section 129E of the Customs Act, stating that the statutory obligation was not fulfilled, leading to the dismissal of the appeal (para 9-10). The decision was dictated and pronounced in open court, adhering to the legal provisions and precedents cited in the judgment.