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2025 DIGILAW 188 (TS)

Shiva Prasad Chennuri v. Union of India

2025-03-26

NARSING RAO NANDIKONDA, P.SAM KOSHY

body2025
ORDER : P.Sam Koshy, J. Heard Mr. Kongala Mohan Goud, learned counsel for the petitioner and Mr. Dominic Fernandes, learned Senior Standing Counsel for the CBIC for respondent Nos.2 and 3. Perused the record. 2. The petitioner is aggrieved by the requirement of deposit of 7.5% of the duty imposed on the penalty amount as a pre-condition for filing of an appeal under Section 128 of the Customs Act, 1962 (for short ‘the Act’). 3. In the instant case, on 21.03.2024, the petitioner was said to be found carrying two gold bars in his pocket weighing 233.200 gms, the value of which was Rs.15,50,780/- while travelling from Dubai to Rajiv Gandhi International Airport, Hyderabad. The petitioner was subjected to proceedings in accordance with the Customs Act and an order in original was passed on 10.12.2024 whereby an order of confiscation was ordered and also an amount of Rs.14,00,000/- under Section 112(a) and 112(b) of the Act was imposed as penalty upon the petitioner. 4. Against the order in original dated 10.12.2024 passed by the Joint Commissioner, the petitioner had preferred an appeal before the Commissioner (Appeals) under Section 128 of the Act. However, it appears because of the pre-condition that is stipulated in law under Section 129E and for non-deposit of the amount required under Section 129E, the appeal has not been accepted. The instant writ petition has been filed only seeking for dispensing with the payment of 7.5% on the penalty amount. 5. However, it appears because of the pre-condition that is stipulated in law under Section 129E and for non-deposit of the amount required under Section 129E, the appeal has not been accepted. The instant writ petition has been filed only seeking for dispensing with the payment of 7.5% on the penalty amount. 5. For ready reference, it would be relevant at this juncture to refer to the unamended provision of Section 129E of the Act as stood before substitution of Act 25 of 2014 was made, as under: “129-E. Deposit, pending appeal, of duty and interest, demanded or penalty levied.- Where in any appeal under this Chapter, the decision or order appealed against relates to any duty any interest demanded in respect of goods which are not under the control of the customs authorities or any penalty levied of goods which are not under the control of the customs authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending levied under this Act, the person desirous of appealing against such 3 decision or order shall, pending the appeal, deposit with the proper officer duty and interest demanded or the penalty levied: Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of the opinion that the deposit of duty and interest demanded or penalty levied would cause under hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue: Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty and interest demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its filing.” 6. The said clause subsequently stood substituted by way of amendment and the substituted version for ready reference is as follows: “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 Section 128, unless the appellant has deposited seven and a half per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of a decision or an order passed by an officer of customs lower in rank than the Principal Commissioner of Customs or Commissioner of Customs; (ii) against the decision or order referred to in clause (a) of sub-section (1) of Section 129-A, unless the appellant has deposited seven and a half per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against; (iii) against the decision or order referred to in clause (b) of sub-section (1) of Section 129-A, unless the appellant has deposited ten per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance 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.]” 7. The plain reading of the substituted provision which came into force from 06.08.2014 would clearly reflect that under the pre-amended provision, the Commissioner (Appeals) was conferred with the powers for dispensing with the deposit in a given case. However, subsequent to the substitution made in Section 129-E w.e.f., 06.08.2014, this power of dispensing with the deposit has not been retained in the Statute which exercise would indicate that the Commissioner (Appeals) does not have the power for ordering dispensing with of deposit as is required under Section 129-E. 8. However, subsequent to the substitution made in Section 129-E w.e.f., 06.08.2014, this power of dispensing with the deposit has not been retained in the Statute which exercise would indicate that the Commissioner (Appeals) does not have the power for ordering dispensing with of deposit as is required under Section 129-E. 8. In view of the given facts and circumstances of the case, when the Statute itself does not provide for a power upon any of the authorities for dispensing with or waiving off the pre-deposit as is required, be it the duty or be it the penalty or both, the writ court would find it difficult to grant waiver when the substantive law itself does not permit any such waiver to be granted. In view of this, since the law itself does not permit for any waiver or dispensing with, the writ Court invoking Article 226 of the Constitution of India would also find it difficult to pass orders granting dispensing with or waiver of pre-deposit or even reduction in the amount to be deposited. This view of the Bench stands fortified by the decision of the Hon’ble Supreme Court in the case of CHANDRA SEKHAR JHA VS. UNION OF INDIA AND ANOTHER,  Civil Appeal No.1566 of 2022 decided on 28.02.2022 whereby in paragraphs 8 and 11, the Hon’ble Supreme Court held as under: “It is in sharp departure from the previous regime that the new provision has been enacted. Under the new regime, on the one hand, the amount to be deposited to maintain the appeal has been reduced from 100% to 7.5% but the discretion which was made available to the appellate body to scale down the pre-deposit has been taken away”. x x x x x x x x x x “We would think that the legislative intention would clearly be to not to allow the appellant to avail the benefit of the discretionary power available under the proviso to the substituted provision under Section 129E. When the appellant is not being called upon to pay the full amount but is only asked to pay the amount which is fixed under the substituted provision, we do not find any merit in the contention of the appellant. However, in the interest of justice we extend the period for complying with Section 129E by a period of two months from today. However, in the interest of justice we extend the period for complying with Section 129E by a period of two months from today. Subject to the same, the appeal will stand dismissed”. 9. For the aforesaid reasons, we find it difficult to entertain the writ petition and grant the relief sought for. 10. The writ petition fails and is, accordingly, dismissed. There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed.