Madras High Court
V.C. Soundarrajan vs Collector Of Customs on 30 March, 1993
Equivalent citations: 1993(65)ELT358(MAD)
ORDER
1. The writ petition is directed against an order passed by the second respondent Tribunal directing the petitioner to make a pre-deposit of Rs. 25,000/- under the Customs Acts, 1962 and a sum of Rs. 25,000/- under the Gold (Control) Act, 1968.
2. Against the orders of the Collector of Customs, Tiruchirapalli, imposing penalty of Rs. 12,500/- under the Gold (Control) Act, and a sum of Rs. 50,000/- under the Customs Act, dated 30-12-1991, the petitioner preferred appeal before the Tribunal and also filed a petition for stay. The Tribunal found that prima facie, a case is not made out and considering the facts and circumstances of the case, the Tribunal directed the petitioner to pre-deposit on or before 30th November, 1992 and subject to which pre-deposit of balance amounts by the petitioner would stand disposed with pending appeal. The petitioner alleges in the affidavit that he was falsely implicated in a Customs offence in which gold bars were recovered on 1-3-1989. It seems gunny bags containing gold bars were found in the petitioners house. It is also stated in the affidavit that in his absence the same had been kept in the house, and that he had known and that if he had information that the gunny bags contained illegal smuggled gold bars, he would have not permitted the placement of gunny bags in his house. The petitioner challenges the said order on merits and that it is not necessary to state the merits, as alleged in the affidavit, of the case at this stage. In so far as the impugned order before this Court is concerned, the petitioner alleges in the affidavit that the impugned order is illegal and deprives the only right of appeal and renders the appeal provisions under the Customs Act illusory. It is also stated that it shows total non-application of mind by the Tribunal, that the petitioner's case has not been considered. It is also stated that the insistence of payment of any of the portion of the penalty is not warranted, that in this case the goods, which is the subject matter of the proceedings, viz. 650 gold bars are already in the custody of the respondents Department, and as such the penalty levied in respect of the same is not liable to be deposited since the goods continue to be under the control of the department. It is also stated that Section 129E of the Customs Act has no application to the facts of this case. It is also stated that the entire procedure of taking up the stay petition or insisting of stay petition to be heard before entertaining any appeal is neither justified nor warranted, by a plain reading of Sections 129 and 129E of the Customs Act. It is also stated in the affidavit that the right of appeal is constitutionally guaranteed under Article 21 of the Constitution of India and that the order passed by the Tribunal is illegal in so far it demands the petitioner to pay the penalty. It is also stated that Section 129E of the Customs Act, cannot be interpreted as a bar to entertain an appeal. With these allegations, the petitioner is before me.
3. Mr. B. Kumar, the learned counsel appearing for the petitioner reiterates the contentions raised in the affidavit filed in support of the writ petition and states that the condition under Section 129E of the Customs Act can be imposed only when the appeal is ripe for hearing and that the condition cannot be imposed even without entertaining the appeal. According to the learned counsel, first of all the appeal should be entertained and then only the question of passing any orders under Section 129E of the Customs Act will arise. The learned counsel further states that the Section 129E of the Customs Act will not apply to the case where the goods viz. gold bars in this case, are under the control of the respondent Department and as such Section 129E of the Customs Act will not apply to the facts of the case at all. The learned counsel further states that the hardship of the petitioner has not been considered by the Tribunal. Learned counsel for the petitioner heavily relies upon the decision in Shri Shyam Kishore and Others v. Municipal Corporation of Delhi and Another wherein the Supreme Court has considered the condition of pre-deposit of tax under the provisions of the Delhi Municipal Corporation Act, 1957.
4. Mr. K. Jayachandran, learned Additional Central Government Standing Counsel takes notice and appearing for the respondent Department contends that the said order has been passed in November 1992 and that once the said order has not been compiled with, actually no appeal could be filed now, according to the provisions of the Customs Act and the Gold (Control) Act and as such this writ petition is not maintainable at this stage and the writ petition has got to be dismissed on the ground of laches on the part of the petitioner.
5. I have considered the arguments of the learned counsel on either side. I am not able to agree with the contention raised by Mr. B. Kumar, the learned counsel appearing for the petitioner that Section 129E of the Customs Act gives a right to the petitioner to file an appeal to the Tribunal. In my view, it is not an absolute right, nor an ingredient of natural justice. In my view, it is only a statutory right and can be circumscribed by the conditions. In fact the Supreme Court had occasion to consider the right under Sections 129 and 129D of the Customs Act in Associated Traders v. Collector of Customs [1988 (36) E.L.T. 719] wherein the Supreme Court has held that it is only a statutory right and it can be circumscribed by the conditions in the grant.
6. The case relied on by the learned counsel for the petitioner in Shri Shyam Kishore and Others v. Municipal Corporation of Delhi and Another is with regard to scope of Section 170(b) of Delhi Municipal Corporation Act, 1957. In that case, when construing Section 170(b) of the said Act, the Supreme Court has held that clause (b) of Section 170 is a bar to the hearing of the appeal and its disposal on merits and not as a bar to the entertainment of the appeal itself. But that is not the case here. Considering the scope of Section 129E of the Customs Act, the Supreme Court in Shri Shyam Kishore and Others v. Municipal Corporation of Delhi and Another observed as follows : (at p. 351) ".... Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant.."
As such, it cannot be said that an order cannot be passed under Section 129B of the Customs Act. Section 129E reads as follows :
".... Deposits pending appeal, of duty demanded or penalty levied : Where in any appeal under this chapter, the decision or order appealed against relates to any duty demanded in respect 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 the appeal, deposit with the proper officer the duty demanded or the penalty levied.."
The Supreme Court in Vijay Prakash and Jawahar v. Collector of Customs (Preventive), Bombay has held as follows :
".... The right of appeal contemplated under Section 129A and Section 129E is a conditional one and the legislature in its wisdom has imposed that condition of depositing duty demanded or penalty levied. Although S. 129E does not expressly provide for rejection of the appeal for non-deposit of duty or penalty, yet it makes it obligatory on the appellant to deposit the duty or penalty pending the appeal, failing which the Appellate Tribunal is fully competent to reject the appeal. The proviso, however, gives power to the Appellate Authority to dispense with such deposit unconditionally or subject to such conditions in cases of undue hardships. It is matter of judicial discretion of the Appellate Authority. That discretion must be exercised on relevant materials, honesty, bona fide and objectively. Once that position is established it cannot be contended that there was any improper exercise of the jurisdiction by the Appellate Authority.
Thus while refusing to entertain appeal unless certain amount is deposited, where the Appellate Tribunal considered the relevant factors, namely, the probability of the prima facie case of the appellant and the conduct of the parties it could not be said that the appellant's right of appeal is whittled down by an alteration of procedure. The purpose of the Section is to act in terrorem to make the people comply with the provisions of law.
Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant. It is not the law that adjudication by itself following the rules of natural justice would be violative of any right - Constitutional or statutory - without any right of appeal, as such. If the Statute gives a right to appeal upon certain conditions, it is upon fulfilment of those conditions that the right becomes vested and exercisable to the appellant...."
In view of the categorical dicta laid down by the Supreme Court with regard to the scope of Section 129E of the Customs Act and the right of appeal, I do not think the contentions of Mr. B. Kumar the learned counsel for the petitioner can be countenanced. I do not think the decision of the Supreme Court which interpreted the provisions under the Delhi Municipal Corporation Act, alters the position. I do not think that the earlier view has been overruled by the latter decision. The latter decision turns upon construction of particular section with which the Supreme Court was concerned. Nor I am satisfied that the contention that Section 129E of the Customs Act is not applicable to the facts of the case on hand. It is an order of imposing penalty and as such penalty has to be paid by the petitioner and simply because the goods are confiscated, it does not mean that the respondents lose the power to levy the penalty and collect it. The order of confiscation made under Sections 111(d), 119 and 115 of the Customs Act and under the provisions of Gold (Control) Act have nothing to do with the penalty. As such, I do not see any merit in the contention of Mr. B. Kumar, the learned counsel for the petitioner that Section 129E of the Customs Act is not applicable to the facts of the case.
7. That apart, the writ petition has got to be dismissed on the ground of latches on the part of the petitioner, as contended by the learned counsel appearing for the Department. The appeal preferred by the petitioner has not been taken on file, as provisions of the Customs Act stand today. In my view, there is not right to prefer an appeal without complying with the order of pre-deposit. As such, on the ground of latches on the part of the petitioner, this petition is to be dismissed.
8. Even on merits, it can not be said that the Tribunal has not considered that hardship in this case. Of course, the Tribunal has taken note of seriousness of the offence, but that does not mean that hardship has not been considered. It is only a discretionary order and the Tribunal was of the opinion that there was no undue hardship. This can be inferred from the order of the Tribunal. As such, there are no merits in this writ petition and accordingly it is dismissed. No costs.