By TIOL News Service

ERNAKULAM, FEB 27, 2015: THE petitioner, aggrieved by order passed by the Commissioner of Central Excise and Customs, filed an appeal and stay petition before the Customs Excise and Service Tax Appellate Tribunal, Bangalore. Vide defect memo, the petitioner was informed that he would have to pay 7.5% of the duty confirmed against him, as a condition for maintaining the appeal before the Tribunal. In the writ petition, the petitioner is aggrieved by the notice to the extent it directs him to comply with the condition of depositing 7.5% of the duty confirmed against him. It is the contention of the petitioner that the said condition is an onerous one and effectively deprives him of the right of appeal granted by the statute.

After hearing both sides, the High Court held:

An amount of Rs.3 ,09,88,316 /- has been confirmed against the petitioner by way of customs duty and cess in respect of goods imported. Apart from the said amount there are also separate penalties of Rs.3 ,09,88,316 /- and Rs.31 lakhs confirmed against the petitioner under various provisions of the Customs Act. The requirement of pre-deposit of 7.5% of the duty or penalty, in cases where both have been imposed, as a pre-condition for maintaining the appeal before the Appellate Tribunal, is one that was introduced under the Customs Act with effect from 06.08.2014. As per the said condition, if an assessee pre-deposits the said amount, then the appeal itself is taken up for hearing by the Appellate Tribunal and there is no requirement of filing a further application for waiver of pre-deposit and stay pending disposal of the appeal. This has been clarified by the CBEC Circular No.984/08/2014 CX dated 16.09.2014. The right of appeal granted by the statute is a conditional one and the conditions are not so onerous as to deprive the petitioner of an effective right of appeal. This is more so, because what is required to be deposited by the petitioner, as a condition for maintaining the appeal, is only a small percentage of the duty/penalty amount confirmed against him, and the said amount has to be refunded to the petitioner in the event of his succeeding in the appeal before the Appellate Tribunal. There is no reason to interfere with the direction requiring the petitioner to pre-deposit 7.5% of the duty confirmed against him, as a condition for maintaining the appeal before the Appellate Tribunal. Petitioner granted time up to 20th March, 2015, for effecting the pre-deposit directed.

(See 2015-TIOL-499-HC-KERALA-CUS)