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2016 (7) TMI 543 - KARNATAKA HIGH COURT

2016 (7) TMI 543 - KARNATAKA HIGH COURT - 2016 (338) E.L.T. 342 (Kar.) - 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 .....

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AT under S.129E of the Customs Act itself required the consideration of these 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 liber .....

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of the Commissioner of Customs, Mangalore conveying to the assess petitioner 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 vi .....

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dated 26.3.2014 and demand notice for ₹ 8.31 crores served upon the 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 .....

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requested by the petitioner assessee that a part of this deposit made with 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 stat .....

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roceed to hear the appeal on merits. 5. Learned counsel for the petitioner 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.129 .....

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l, which is a substantive right of the petitioner assessee. He also submitted 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, .....

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Customs had no direct control over the various deposits made by the petitioner 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 Commissi .....

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al and which is relevant for the present purpose is quoted below for ready 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 low .....

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ance of the decision or order appealed against. Provided that the amount 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 th .....

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e representations made by the petitioner assessee before the learned Commissioner 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 re .....

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to the assessee before disposing or deciding the representations made by 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 .....

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Act. 12. 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 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 s .....

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