2008 (8) TMI 583 - HC - Customs

Pre-deposit remand when not to be ordered Authority reduced the amount of pre-deposit Assessee did not submitted the amount of pre-deposit - Appellate Authority has no option but to dismiss the appeal - the petitioner who has not chosen to challenge the order of the second respondent Appellate Authority reducing the pre-deposit to 25% of the penalty amounts or to challenge the validity of the second and third proviso to Section 15(1) of the said Act is not entitled to seek the remand of the matter either to the first or to the second respondent. - However it is also my anxiety that if the petitioner has indeed paid the custom duty to the customs authorities and it only wants to establish the said factum it cannot be rendered remedy-less - appeal to be revived after making pre-deposit 25% of penalty amount.

Summary

Issues: Challenge to the Appellate Authority's order, compliance with pre-deposit requirements, dismissal of appeal on merits, validity of provisos under the Foreign Trade Act, establishing payment of customs duty.

Analysis:

Challenge to Appellate Authority's Order:
The petitioner contested the Appellate Authority's order dated April 10, 2006, seeking a remand to the first respondent for document verification and a fresh hearing. The penalty of Rs. 11,04,002 was imposed for non-fulfillment of export obligations against an EPCG License. The appeal filed did not comply with the pre-deposit requirement, leading to dismissal despite some reduction in pre-deposit amount. The petitioner argued for more opportunities to establish payment of customs duty.

Compliance with Pre-deposit Requirements:
The Appellate Authority reduced the pre-deposit amount to 25% of the penalty, granting multiple opportunities for compliance. However, the petitioner failed to submit the required pre-deposits, leading to the dismissal of the appeal. The Court upheld the Authority's decision, emphasizing the importance of fulfilling pre-deposit obligations under the law.

Dismissal of Appeal on Merits:
The petitioner contended that the appeal was dismissed on both procedural grounds and merits. The Court noted that while the petitioner may have paid customs duty, the non-compliance with pre-deposit requirements justified the dismissal. The passing reference to export obligations in the order did not invalidate the decision.

Validity of Provisos under the Foreign Trade Act:
The respondent argued that the petition was flawed as it did not challenge the reduction in pre-deposit amount or the validity of certain provisos under the Foreign Trade Act. The Court agreed, stating that the petitioner cannot seek a remand without addressing these issues.

Establishing Payment of Customs Duty:
Despite dismissing the petition, the Court reserved the petitioner's right to submit the 25% pre-deposit within two months and apply for appeal restoration. Failure to comply within one month would render the Appellate Authority's order final. This provision aimed to address the petitioner's concern regarding proving payment of customs duty.

In conclusion, while the petition was dismissed, the Court provided a window for the petitioner to rectify the non-compliance with pre-deposit requirements and potentially revive the appeal by establishing the payment of customs duty within the specified timeframe.