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Challenge to orders passed by Appellate Collector of Customs and Government of India under Customs Act, 1962 without depositing penalty. Interpretation of Sections 128 and 129 of the Customs Act, 1962 regarding the deposit of penalty pending appeal. Detailed Analysis: The petitioner, a cloth merchant, challenged the seizure of cloth by Customs Preventive Officers. The Assistant Collector rejected the petitioner's explanation, confiscated the cloth, and imposed a penalty. The petitioner appealed against this decision to the Appellate Collector of Customs, Calcutta, but the appeal was rejected for non-compliance with Section 129(1) of the Customs Act, 1962. A revision application was filed with the Government of India, which was also rejected, leading to the writ petition challenging the impugned orders (paras 2). The main issue for consideration was whether an appeal under Sections 128 and 129 of the Customs Act, 1962 could be entertained without depositing the penalty levied and if so, whether the appeal could be heard without such deposit. Section 129 requires the deposit of duty demanded or penalty levied pending an appeal, with a provision for the Appellate Authority to dispense with such deposit in cases of undue hardship (paras 3-5). The Court noted the differences in language between the proviso to Section 129(1) of the Customs Act, 1962 and similar provisions in the Assam Sales Tax Act and Assam Finance (Sales Tax) Act. It emphasized that the penalty levied must be paid during the appeal unless the Appellate Authority dispenses with the deposit due to undue hardship. The timing of the penalty deposit during the appeal process was also discussed (paras 6-8). The Court held that the Appellate Authority must give the appellant a reasonable time to deposit the penalty after rejecting a prayer for dispensing with the deposit. The immediate rejection of the appeal for non-compliance with the deposit requirement was deemed unsustainable. The revisional order's stance on rejecting appeals for non-compliance was acknowledged, but it was clarified that a reasonable time should be given for compliance before rejecting the appeal (paras 8-11). Consequently, the Court quashed the impugned orders of the Appellate Authority and the Revisional Authority. The appellant was granted one month to deposit the penalty, and if done within the stipulated time, the appeal would be restored and disposed of accordingly. Failure to deposit the penalty would result in the dismissal of the petition and upholding of the impugned orders (paras 11-13). The petition was allowed conditionally, and the Rule was made absolute on the specified terms, with no order as to costs. Records were directed to be sent down immediately (paras 14-15).
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