Legal principle

A mere assertion that the appeal has an excellent case on merits, without pleading and proving undue hardship, does not justify complete waiver of pre-deposit under Section 129E, as an arguable point in appeal is not sufficient to insist on complete waiver of deposit.

Court decision

The High Court dismissed all the appeals, holding that the adjudicating authority's order was not ex facie illegal or without jurisdiction so as to warrant complete waiver of pre-deposit, and that the Tribunal's reasoned insistence on 50% pre-deposit did not give rise to any question of law. The connected Civil Applications did not survive and were disposed of accordingly.

Facts

Al Amin Exports, a partnership firm running a 100% Export Oriented Unit manufacturing ready-made garments at Kabilpore GIDC, Navasari, was investigated by DRI along with related EOUs including M/s. Arya Dyeing and Printing Pvt. Ltd. and M/s. Sunshine Overseas. The Department's show cause notice dated 10.07.2007 alleged that Arya Dyeing imported raw fabric duty-free under an export obligation, but Al Amin merely took paper entries of goods under CT-3 without physical receipt, charging a premium of Rs.4.50 to Rs.5 per metre, while goods exported were actually purchased from the open market through Shri Bilal Memon. Statements of partners were recorded under Section 108 of the Customs Act, 1962, some admitting the CT-3 receipts were on paper only. After adjudication, the appellants appealed to the Tribunal, which insisted on deposit of 50% of the amount by way of pre-deposit, and the appellants approached the High Court challenging that requirement.

Key provisions

• Section 108, Customs Act, 1962 — Power to summon persons to give evidence and produce documents
• Section 112(a), Customs Act, 1962 — Penalty for improper importation of goods
• Section 114, Customs Act, 1962 — Penalty for attempt to export goods improperly etc
• Section 111(o), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 72, Customs Act, 1962 — Goods improperly removed from warehouse, etc
• Section 129, Customs Act, 1962 — Appellate Tribunal
• Section 12, Customs Act, 1962 — Dutiable goods
• Section 68, Customs Act, 1962 — Clearance of warehoused goods for home consumption
• Section 28AB, Customs Act, 1962 — [Omitted] ****
• Section 28(1), Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded
• Section 11A(1), Customs Act, 1962 — Definitions
• Section 125, Customs Act, 1962 — Option to pay fine in lieu of confiscation