By TIOL News Service

AHMEDABAD, DEC 17, 2015: BY an order-in-original dated 31.3.2014 , the Commissioner directed recovery of Customs duty as well as Central Excise duty from the petitioner. He also imposed penalties under the Central Excise Act as well as Customs Act.

This o-i-o was challenged by the petitioner before the Tribunal by filing a single consolidated appeal dated 15.07.2014 praying that the order be quashed and set aside.

The Tribunal registry issued a memo on 24.07.2014 and raised a defect in this appeal and which was specified as under:

"One more Custom appeal to be filed against the OIO No.AHMEXCUS- 003-COM-069-13-14 dated 31.03.2014 in quadruplicate along with proper fee.You are therefore directed to remove the above mentioned defect on or before 11.08.2014."

In compliance thereof, the petitioner filed a separate appeal concerning the duty and penalties imposed under the Customs Act on 11.08.2014 . Simultaneously, they also preferred an application for stay/pre-deposit waiver.

By this date, section 129E of the Customs Act, 1962 came to be substituted by the Finance Act, 2014 (w.e.f 06.08.2014) and which inter alia mandated deposit of 7.5% of the duty confirmed and left no discretion to the appellate authority to waive such requirement in order to entertain an appeal.

The Tribunal viewed that since the appeal filed under the Customs Act was after the amendment of section 129-E, the amended provision would apply. The Tribunal, therefore, insisted that the petitioner should make pre-deposit of 7.5% of the duty.

And since the petitioner failed to do so, the appeal was dismissed on this short ground only.

The petitioner has challenged this order before the High Court and submits that the appeal challenging the Customs duty and penalty, though was re-presented on 11.08.2014 , it was nothing but a continuation of earlier appeal already filed long before section 129-E was amended with effect from 06.08.2014 . Moreover, Section 129-E makes it clear that the amended provision would not apply to any appeal or stay petition already pending when this section was amended.

The counsel for the Revenue opposed the petition.

The High Court observed -

++ It was the Tribunal who raised objection and insisted that the petitioner files a separate appeal under the Customs Act. The petitioner thereupon presented a fresh appeal on 11.08.2014 along with stay petition.

++ In our opinion, this presentation of fresh appeal by the petitioner before the Tribunal on 11.8.2014 must be viewed in the backgrounds of the facts of the case and must be treated as continuation of the original proceedings filed before the Tribunal instituted by the petitioner by presenting its original appeal on 21.7.2014. Since there was only one show cause notice which resulted into one order of adjudication passed by the Commissioner, we wonder whether the petitioner was even obliged to file a separate appeal. Insofar as the petitioner is concerned, it received one show cause notice and was visited with one final order of adjudication. Its liability, therefore, was to file a single appeal challenging such order of the Commissioner. It may be for convenience and better appreciation of issues that the Tribunal insisted for separate two appeals.

++ Nevertheless, we have serious doubts whether under the law the petitioner was required in the first place to present two separate appeals. Be that as it may, when the petitioner merely re-presented the appeal which was already filed for the purpose of challenging the consolidated order of the Commissioner under both the laws, such filing of appeal must be seen as a continuation of the original proceedings and fresh presentation of the appeal would relate back to the original date of filing the appeal. The issue can be seen from another angle. If by the time the petitioner presented the fresh appeal within the time permitted and directed by the Tribunal, the period of limitation had expired, would such appeal be rejected as time-barred? The answer has to be in the negative.

++ Viewed from this angle, it becomes clear that the amended section 129-E of the Customs Act with effect from 06.08.2014 would not apply to both the appeals of the petitioner which are pending before the Tribunal. The petitioner would, therefore, be governed by the original section 129-E as it prevailed prior to 06.08.2014. The petitioner had a right to seek waiver of pre-deposit. The Tribunal would, therefore, restore such appeal and decide the same in accordance with law, after first deciding the petitioner's application for waiver of pre-deposit.

The order passed by the Tribunal was set aside and the Petition was disposed of.

(See 2015-TIOL-2822-HC-AHM-CUS)