By TIOL News Service

MUMBAI, MAR 27, 2017: THE order-in-original is dated 24th June 2014. An appeal was lodged before the CESTAT on 8th September 2014.

However, the right of appeal and guaranteed to the appellant is by section129E of the Customs Act, 1962. That section requires the appellant to deposit a sum equivalent to 7.5% of the duty demanded or penalty imposed or both under the order-in-original. If this condition stipulated by section 129-E(i) is not complied with, Tribunal cannot entertain the appeal.

The second proviso to this section makes it clear that this section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No. 2) Act, 2014. Admittedly, this is not a position emerging in the present case.

Therefore, the condition imposed of deposit of 7.5% penalty of Rs.2.5 crores was required to be complied by the appellant.

Enough time was granted by the tribunal to comply with this condition, namely, to deposit a sum of 7.5% of the penalty amount andwhich was a pre-condition for hearing of the appeal.

Since this was not complied with till 18th November 2014, the tribunal dismissed the appellant's appeal, without adjudication, by taking recourse to section 129-E of the Customs Act, 1962.

The appellant challenges the Tribunal order.

The only argument canvased before the High Court is that the tribunal could not have taken recourse to the second proviso because the order-in-original, from which the appeal arose, is dated 24th June, 2014 i.e. prior to 6th August 2014, on which date section 129-E, as amended, came into force.

The High Court observed that this argument was noted and held in negative not only by a Division Bench of the High Court in the case of Nimbus Communications Limited - 2016-TIOL-1708-HC-MUM-ST , but in several other judgments, one of which was in the case of Ganesh Yadav - 2015-TIOL-1490-HC-ALL-ST .

Opining that similar argument, which was specifically considered and negatived by a Division Bench(supra) cannot be raised again, the High Court held that the tribunal was right in applying the amended provision.

Concluding that there is no legal infirmity or perversity in the order impugned, the appeal was dismissed.

(See 2017-TIOL-575-HC-MUM-CUS)