CESTAT cannot be Compelled to Restore Customs Appeal After Decades of Delay and Repeated Defaults in Pre-Deposit: Delhi HC [Read Order]

In a recent ruling, the Delhi High Court held that the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) cannot be compelled to restore a customs appeal after decades of delay and repeated failure by the appellant to comply with mandatory pre-deposit requirements, especially when earlier challenges have already been rejected by High Courts and the Supreme Court.

Kanchan Lal Agrawal, the appellant, filed an appeal before the Delhi High Court under Section 130 of the Customs Act, 1962, challenging an order dated 18 September 2024 passed by CESTAT. By the impugned order, the Tribunal had refused to grant any further extension for restoration of the appellant’s appeal, which had been dismissed long ago for non-compliance with pre-deposit conditions.

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The case arose from the seizure of 702.78 kilograms of silver by the Directorate of Revenue Intelligence on 30 August 1991. After investigation, an Order-in-Original dated 29 September 1997 was passed directing absolute confiscation of the seized silver and a vehicle, and imposing a penalty of Rs. 15 lakh on the appellant.

The appellant challenged this order before CESTAT, which granted a stay in April 1998 subject to deposit of Rs. 5 lakh. The appellant failed to make the pre-deposit. Even after the Delhi High Court granted an extension till April 1999, the appellant did not deposit the amount. As a result, the appeal before CESTAT was dismissed in August 1999.

Over the years, the appellant filed multiple applications seeking restoration of the appeal. These were dismissed by CESTAT, the Allahabad High Court, and the Supreme Court. Despite this, the appellant again sought restoration almost two decades later, which was rejected by CESTAT, leading to the present appeal.

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The appellant’s counsel argued that due to financial difficulties, the pre-deposit could not be made earlier and that the appellant never got an opportunity to argue the case on merits. They also argued that the seized silver was of substantial value and was still lying with the Customs Department.

The Customs Department argued that the appellant had exhausted all available remedies and had approached multiple courts, including the Supreme Court, where the challenge had been dismissed. They argued that granting restoration at this stage would reopen settled proceedings and undermine judicial finality.

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The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain observed that the appellant had repeatedly failed to comply with pre-deposit orders despite sufficient opportunities. The court observed that the second Special Leave Petition had been dismissed by the Supreme Court, giving finality to the matter.

The court explained that the mere fact that the seized silver was still lying with the department could not justify reopening proceedings after such a long delay.

The court declined to interfere with the CESTAT order and held that no further indulgence could be granted. The appeal was disposed of, with liberty granted to the appellant to approach the Supreme Court in accordance with law.

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