A Division Bench of the Delhi High Court has held that the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) is competent to reject Customs Appeals for non-compliance with the Pre-deposit condition for filing appeals.
Being aggrieved with an Order against the appellant, the appellants/exporters preferred an appeal along with application for waiver of pre-deposit under Section 129-E of the Customs Act, 1962 and stay of operation of the impugned order dated 30.09.2008 before
the CESTAT.
The CESTAT vide order dated 17.06.2009, dismissed the stay applications, directing the appellant M/s. G.S. International to deposit Rs. 67,56,033/- and appellant M/s. A’s Raj International to deposit an amount of Rs. 1,00,05,250/- within a period of four weeks from the date of the order.
The CESTAT Bench, vide Final Order No. C/356-357/2009 dated 10.08.2009, recorded the non-compliance of its order No. C-131-132/09-CUS dated 17.06.2009 and dismissed the appeals. Challenging the CESTAT Final Order No. C/356-357/2009 dated 10.08.2009, appellants/exporters have filed the present appeals under Section 130 of the Customs Act, 1962.
The counsel for the appellant argued that right of appeal provided under Section 129E is a statutory right and failure to make pre-deposit provides limited right to the respondents to recover the amount of penalty and drawback from the appellants but the appeals ought to have been heard by the learned CESTAT on merits and could not have been dismissed in a summary manner merely on account of non-deposit of the pre-deposit amount. It was submitted that the condition of pre-deposit is bad as it whittled down the appellant’s right to appeal.
On the other hand, the counsel appearing on behalf of respondents has argued that Tribunal could not have heard the appeal without pre-deposit, and therefore, the appeals have been rightly rejected.
It was observed by the bench of Justice Ravinder Dudeja and Justice Sanjeev Sachdeva that, “It is pertinent to note that Section 129E of the Act as it stood prior to its Amendment by Finance Act (No. 2) of 2014, conferred a discretion on the Commissioner (Appeals) as well as CESTAT to dispense with the deposit liable to be made for the purposes of an assessee pursuing an appeal where it was found that the deposit of duty, interest or penalty levied would cause hardship.”
However, it was also noted that, “If the statute gives a right to appeal upon certain conditions, it is upon fulfillment of those conditions that the right becomes vested and exercisable to the appellant. The proviso to Section 129E of the Act gives a discretion to the Tribunal in cases of undue hardships to dispense the obligation to deposit the duty/interest or penalty.”
It was further observed that, “If the statute gives a right to appeal upon certain conditions, it is
upon fulfillment of those conditions that the right becomes vested and exercisable to the appellant. The proviso to Section 129E of the Act gives a discretion to the Tribunal in cases of undue hardships to dispense the obligation to deposit the duty/interest or penalty.”
Thus, the question of law was answered holding that there is no error in the orders passed by learned CESTAT, thereby, dismissing the appeal for non-compliance of the deposit order dated 17.06.2009, as per the provisions of Section 129 read with proviso of Section 129-E of the Customs Act, 1962. The appeals were thereby dismissed.
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