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M/s Bhatia Global Trading Ltd Versus Commissioner of Customs, Mangalore and Assistant Commissioner (Recovery) , Mangalore

2016 (7) TMI 543 - KARNATAKA HIGH COURT

Mandatory pre-deposit before filing an appeal - rejection of appropriation of amount deposited during investigation - Sec. 129 E of the Customs Act, 1962 - Held that:- No public authority or public servant much less a quasi-judicial authority like the Commissioner of Customs can be allowed or permitted to pass these kind of communications or direct their subordinates to communicate such orders in the aforesaid kingly manner. This Court, therefore, records its displeasure on the tenor of the comm .....

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hese facts by the said authority because this Court cannot undertake this exercise here in the present writ petition. Therefore, the matter would essentially require a remand back to the learned Commissioner to decide the representations of the petitioner assessee once again, after giving him an opportunity of hearing, by a detailed speaking order. - It is needless to add that the petitioner assessee will have the liberty to avail appropriate legal remedy against such negative order of the C .....

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oner that the request of the petitioner assessee for considering the deposits made by it during the course of Investigation & Audit, towards the mandatory pre-deposit under the provisions of S.129 E of the Customs Act, 1962 for maintaining the appeal was examined and he was directed by the Commissioner to inform the assessee that his request is not acceded to. 2. Later on and consequently, another Assessing Authority viz., Assistant Commissioner (Recovery), also issued a detention notice und .....

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e assessee requiring the petitioner assessee to make a deposit of 10%/7.5% as pre-deposit for maintaining the said appeal under S.129E of the Customs Act. But the assessee made a representation to the respondent Commissioner of Customs, Mangalore vide Annexure E dated 4.8.2015 that a sum of ₹ 1,49,59,384/- on account of various deposits made by him while the matters were under Investigation & Audit pending before the respondent authorities and a part of that amount may be treated and a .....

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h the respondent may be adjusted as pre-deposit for maintaining the said appeal under S.129 E of the Customs Act. 4. The said representations appear to have been summarily rejected by the learned Commissioner without assigning any reason by Annexure F communicated through the Superintendent of that Office. The appeal of the petitioner assessee therefore, could not be entertained and heard by the CESTAT on merits and as stated at Bar, it is still lying pending without any proceedings further so f .....

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r Mr S Parthasarathi urged that under the amended provisions of S.129 E of the Customs Act, 1962, substituted by Finance (No.2) Act, 2014 and which deals with the requirement of pre-deposit of certain percentage of duty demanded or penalty imposed impugned in the appeal, the CESTAT does not have any discretion to waive of or dispense with the said requirement of pre-deposit of 10% if the order impugned is passed under S.129A of the Customs Act or 7.5% if the order has been passed under clause (a .....

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tted that the communication Annexure F dated 12.8.2015 is wholly a non-speaking order and the said order is not even signed by the learned Commissioner to whom the representations were made by the petitioner assessee in this regard but the same is only a communication on behalf of the Commissioner by the Superintendent conveying that the said request cannot be acceded to. However, no reasons for the same have been assigned, whereas the assessee could not be required to further pay additional sum .....

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ioner assessee as stated in his representations since they were made at different places subject to different proceedings of Investigation and Audit pending before the various authorities and even if the petitioner wanted to have any such relaxation or adjustment of the amounts lying in deposit with the respondent Customs Department, the Tribunal itself was the competent authority to pass any such order and not the Commissioner of Customs. He, therefore, submitted that the petitioner should be r .....

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y reference: S.129 E: Deposit of certain percentage of duty demanded or penalty imposed before filing appeal: The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal - (i) under sub-section (1) of S.128, unless the appellant has deposited seven and a half per cent of the duty demanded or penalty imposed or both, in pursuance of a decision or an order passed by an officer of customs lower in rank than the Commissioner of Custom; (ii) against the decision or .....

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required to be deposited under this section shall not exceed rupees ten crores: Provided further that the provisions of 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. 9. From the bare perusal of the aforesaid provisions of the Customs Act, it is clear that the Tribunal, which earlier had the power prior to the amendment of the provisions by Finance (No.2) Act, 2014 to relax or wai .....

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issioner of Customs was simple that certain amounts had been deposited by the assessee pending Investigation & Audit and no demand was yet raised and set off against such deposits and therefore, a part of which could certainly be treated as paid to the Department for complying with the requirement of pre-deposit under S.129 E of the Customs Act depending upon the determination of the relevant facts and figures by the respondent Commissioner as to whether any such excess deposit was available .....

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the assessee in this regard. Unfortunately, nothing of this sort appears to have been undertaken by the respondent Commissioner in this case. The rejection purportedly made on the office files of the learned Commissioner appears to be blithely communicated to the petitioner vide Annexure F dated 12.8.2015 by the Superintendent of the Office who states in the said communication that "I am directed by the Commissioner to inform you that your request is not acceded". These kind of communi .....

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authority like the Commissioner of Customs can be allowed or permitted to pass these kind of communications or direct their subordinates to communicate such orders in the aforesaid kingly manner. This Court, therefore, records its displeasure on the tenor of the communication Annexure F dated 12.8.2015 given to the petitioner assessee. To say the least, there was not only a breach of principles of natural justice but the said communication also smacks of arbitrary act and non-application of min .....

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