Delhi HC Directs CESTAT to Hear Appeal on Duty Demand for Second Container Seized from Godown With 50% Pre-Deposit [Read Order]
The Court noted that part of the pre-deposit for penalties had already been made and directed the petitioner to deposit 50% of the duty pre-deposit, i.e., Rs. 7,45,646, within six weeks
Delhi HC
Delhi HC
The High Court of Delhi,directed Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) to hear the appeal on the duty demand for the second container seized from a godown, subject to 50% pre-deposit.
Anuj Jain,petitioner-assessee,filed a petition against the Order-in-Original dated 24th April, 2020, passed by the Principal Commissioner of Customs (Import). The facts of the case are that two consignments were imported in containers declared as induction cookers. On inspection, the first container was found to contain cigarettes and was confiscated.
The second container, also declared as induction cookers, was cleared through Customs but was later found at a godown, where a town seizure was made. The goods were absolutely confiscated, and a demand for customs duty was raised on the petitioner.
Statements of several persons, including the petitioner, were recorded by the Directorate of Revenue Intelligence (DRI). As per the petitioner’s statement, he had introduced the proprietor of M/s Nikhaar Associates, the importer, to the Customs handling agent and had also handed over the documents relating to the consignments
The petitioner filed a reply to the Show Cause Notice, after which the Order-in-Original was passed on 24th April, 2020. The order required a pre-deposit of Rs. 1,000 for cases up to Rs. 5,00,000 and Rs. 5,000 for cases between Rs. 5,00,000 and Rs. 50,00,000. The petitioner challenged this order before CESTAT, but the appeal was rejected for not making the required pre-deposit.
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The petitioner counsel submitted that 7.5% of the penalty had already been deposited, but the petitioner could not pay the substantial duty demand for one container. She argued that while the duty demand for the consignment seized at the port was dropped, a demand of Rs. 1,98,68,395.5 was raised for the consignment seized from the godown.
She prayed that the appeal before CESTAT be allowed without any further pre-deposit, as both consignments were on the same footing.
The department counsel submitted that one container was confiscated at the port, while the other was cleared through customs and later seized in a town seizure. She argued that duty was rightly imposed on the latter consignment.
Justice Prathiba M.Singh and Justice Shail Jain held that the issue of duty demand on the second container had to be decided by CESTAT on merits, but the appeal was not heard earlier due to non-payment of pre-deposit. It noted that the petitioner had already deposited Rs. 2,64,395 towards penalty, while no duty was demanded on the first container and full duty was demanded on the second.
Since 7.5% of the duty came to Rs. 14,90,129, the Court directed the petitioner to pay 50% of this amount, i.e., Rs. 7,45,646, within six weeks in addition to the amount already deposited. It further directed CESTAT to hear the appeal on merits on 6th October, 2025 after such payment.
The petition was disposed of, keeping all rights and contentions open.
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