Nafees Ahmad vs CESTAT

Admittedly, the above-captioned two First Appeals from order have been filed by the appellant beyond time i.e. after 180 days along an application for condonation of delay. Sri Rajesh Singh Chauhan, learned Counsel for the opposite parties submits that he has no objection in case the delay in filing the above-captioned appeals be condoned and the appeals be heard on merit.

Cause shown in the affidavit filed in support of the application for condonation of delay is sufficient.

Applications for condonation of delay filed in the above-captioned appeals are allowed. Delay in filing the above appeals is condoned.

With the consent of learned Counsel for the parties, we proceeded to hear the matter finally at the admission stage itself.

Heard Sri B.R. Singh, learned Counsel for the appellants and Sri Rajesh Singh Chauhan, learned Counsel for the opposite parties and perused the records.

These two appeals are u/s 130 of the Customs Act, 1962 (hereinafter referred to as "the Act") from the orders dated 21-9-2012 passed in Appeal No. C/2400-2401/2012 passed by the Customs, Excise & Service Tax Appellate Tribunal (hereinafter referred as the "Tribunal"), whereby the Tribunal dismissed the appeals for non-compliance with the provisions of Section 129E of the Act read with the stay order.

Since the questions involved in these two appeals are identical, as such, they are being decided by a common order.

On 9-6-2010, at 15.00 hrs. police officers of Gulariha Police Station intercepted the truck, bearing registration No. UP-75-M- 872, at Baragdahi about 9.30 P.M., in which, foreign betel-nut was loaded, which are being imported from Nepal with invalid papers and as such, the said truck was seized by the police officers and the custody of the same was given to the Customs office, Gorakhpur. Besides the above betel-nut loaded truck, the police officials also given the custody of three persons, namely, Shri Rais Ahmad, Sri Shivbalak Yadav and Sri Man Singh. Thereafter, the Customs officials got weighted the betel-nut stuffed in 224 sacks loaded on the truck and recorded the weight as 129.92 qtls. Customs officials had also called two dealers of betel-nut, who, after verifying, informed the officials of the Customs that betel nut are foreign goods and the value of the same is Rs. 50/- per kg. Accordingly, price of seized betel nut was estimated to Rs. 6,49,000/- and price of seized truck to the tune of Rs. 14,00,000/- according to the documents of Insurer of the Truck.

According to the appellants, after recording statements, a show cause notice was issued by the Joint Commissioner, Customs (Prev.) as to why the seized 12,992 Kg. foreign smuggled betel-nut should not be confiscated u/s 11 of the Act and penalty should not be imposed upon them u/s 112 of the Act, to which the appellants submitted their reply but the Adjudicating Authority, without appreciating the various submissions of the appellants, imposed penalty of Rs. 2,00,000/- u/s 112 of the Act upon each of the appellants. Feeling aggrieved, the appellants preferred an appeal before the Commissioner (Appeals), which was rejected vide order dated 3-5-2012, against which, the appellants preferred an appeal before the Tribunal. The Appellate Tribunal, after considering the facts and circumstances of the case and taking into consideration all the relevant material facts and factors, by its order dated 21-9-2012, declined to interfere and dismissed the appeals for non-compliance with the provisions of Section 129E of the Act. Aggrieved thereby, the appellants have appealed to this Court.

In order to appreciate the contentions of the parties, we think it appropriate to reproduce Section 129E of the Act, which is as under:

129E. Deposit, pending appeal, of duty and interest, demanded or penalty levied. - Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of the customs authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the proper officer the duty demanded or the penalty levied:

Provided that where in any particular case, the Collector (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Collector (Appeals) or, as the case may be, the Appellate Tribunal may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue:

Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty and interest demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its filing.

On perusal of the aforesaid provisions, it is abundantly clear that it is a pre-condition to deposit the amount in respect of an appeal filed against the duty demanded or penalty levied. Although the Section does not expressly provide for rejection of the appeal for non-deposit of duty or penalty, yet it makes it obligatory on the appellant to deposit the duty or penalty, pending the appeal, failing which the Appellate Tribunal is fully competent to reject the appeal.

The case of the appellants is that the learned Adjudicating Authority as well as the Appellate Authority have violated the principles of natural justice by not allowing the appellants to cross-examine the witnesses.

From perusal of the records, it reflects that in the impugned order, the Tribunal noted that vide order dated 29-8-2012, Sri Raees Ahmad was directed to deposit an amount of Rs. 50,000/- and Sri Nafees Ahmad was directed to deposit an amount of Rs. 1,00,000/- and the said deposit were required to be made within a period of eight weeks from the date of passing the order but even then, Counsel for the appellants appeared before the Tribunal has submitted that he had no information about the deposit required to be made by the appellants. However, the Tribunal noted that report of the Registrar, which also reflects that the said deposit have not been made as no proof of compliance stand filed on record. After taking into consideration these factors, the Tribunal dismissed the appeals for non-compliance of with the provisions of Section 129E of the Customs Act, 1962 read with the stay order. The proviso to Section 129E of the Act gives a discretion to the Tribunal in cases of undue hardships to condone the obligation to deposit or to reduce. It is a discretion vested in an obligation to act judicially and properly. In the facts and circumstances of the case and all the relevant factors, namely, the probability of the prima facie case of the appellants, the conduct of the parties, have been taken into consideration by the Tribunal. The purpose of the Section is to act in terrorem to make the people comply with the provisions of law.

In that view of the matter, we are unable to accept the submission that there was improper dismissal of the appeals and non-consideration of material and relevant facts. Accordingly, both the appeals are dismissed.