Delhi High Court
Shafiq-Ur-Rahman vs Union Of India on 27 April, 1998
Equivalent citations: 1999IAD(DELHI)405, 76(1998)DLT889, 2000(118)ELT576(DEL)
Author: R.C. Lahoti
Bench: R.C. Lahoti, Mukul Mudgal
JUDGMENT R.C. Lahoti, J.
1. Notice was issued by the Commissioner of Customs to the petitioner to show cause why 7200 cartons of cigarettes shipped from Imphal, Manipur for New Delhi be not confiscated and penalty be not imposed. The same having been illegally imported without there being a valid licence for the purpose. The proceedings terminated into confiscation of Rs. 7,20,000/- realised from the auction of the cigarettes during the course of adjudication proceedings and imposing a penalty of Rs. 10 lakhs under Section 112 of the Customs Act, 1962 against the petitioner. The petitioner preferred an appeal to the CEGAT and moved an application under Section 129E of the Customs Act seeking waiver as to predeposit and stay of recovery. The Tribunal has by its impugned order dated 11.2.1996 directed the petitioner to deposit a sum of Rs. 2 lakhs and subject to such deposit dispensing with recovery of the amount of penalty and stay of recovery proceedings during the pendency of the appeal. Time till 5.5.1998 has been allowed for making the deposit.
2. By this petition, it is submitted that the order made by the Tribunal is too onerous and based on non-application of mind to the existence of strong prima facie case in favour of the petitioner and to the fact that the petitioner is not possessed of sufficient means so as to pay the amount. It is submitted that failure of the petitioner to make the deposit would result in negativing his statutory right of appeal. Learned Counsel for the petitioner has submitted that cigarettes are not an article notified under Section 123 of the Customs Act. The cigarettes did not bear any foreign marking. There was 'reason to believe' that the goods were liable to confiscation within the meaning of Section 110 of the Customs Act. The seizure and consequently the confiscation is totally without jurisdiction. It is also submitted that before auctioning the seized cigarettes the mandatory provisions of Sub-section (18) of Section 110 of the Act were not complied with inasmuch as no sanction of the Magistrate was sought and no representative samples were drawn and preserved.
For failure of compliance with the said mandatory provisions of law, the Counsel submits that the petitioner has a very strong prima facie case and he is sure of his success in appeal which cannot be belied prima facie. The Counsel for the petitioner also invited the attention of the Court to the statement made in paras 4 & 5 of the affidavit filed in support of the application before the Tribunal which reads as under :
"(4) That my monthly average income from my petty profession of bookings orders for supply of utensils on commission basis Rs. 5000/- I am a married person with three school going children aged 15,10 & 8 and living in a friend's house as caretaker without any rent/licence fee or hire charges. My meagre income is just enough to make both ends meet. Iam not an income tax payee and fall below the exemption limits.
(5) The deponent is not possessed of sufficient means to deposit the penalty in full or a part thereof. The deponent has no convertible assets, movable or immovable property or any Bank balance or any other readily available fund to discharge the obligation of depositing the penalty wholly or partly."
It is submitted that the Tribunal has totally failed to consider the factual averments made as above said and also failed to assign any reason why the Tribunal was not persuaded to believe the said factual statement and why if at all it was forming an opinion to the country.
3. There is substance in the submission of the learned Counsel for the petitioner. She has invited attention of the Court to Ashok Rubber Industries Vs. Collector of Central Excise, and Rajinder Kumar R. Shah Vs. Collector of Customs, , wherein it has been held that failure on the part of the Tribunal to apply the test of prima facie case and failure to take into consideration whether the petitioner is or is not possessed of sufficient means vitiates the order of the Tribunal as to pre-deposit of duty as the same would be deemed to have been passed by ignoring the relevant factors. Ms. Luthra also submitted that the Tribunal has committed jurisdictional error is not keeping in view itw own decision in Vinod Kumar Kaushal Vs. Commissioner of Customs, 1997 (95) ELT 593 (T). We find the contention advanced by the Counsel for the petitioner in this regard to have been raised before the Tribunal also but the Tribunal has failed to take full note of the said submissions and also failed to assign reasons for not accepting the same. There is no reason why the Tribunal should have disbelieved the statement of the petitioner made in paras 4 & 5 of the affidavit of the petitioner filed before it and quoted herein above.
4. In the facts and circumstances of this case, we are of the opinion that the condition as to pre-deposit as imposed by the Tribunal is too onerous for the appellant. After hearing the learned Counsel for the parties, we are of the opinion that an amount of Rs. 1 lakh by way of predeposit would suffice and meet the ends of justice in the facts and circumstances of this case.
5. For the foregoing reasons the petition is partly allowed. It is directed that the amount of pre-deposit as appointed in the order of the Tribunal dated 11.2.1998 shall stand reduced to Rs. 1 lakh. Time till 20.5.1998 is allowed for making the deposit. C.W.P. and C.M. disposed of accordingly.