M/S Tecmax Electronics vs. The Principal Commissioner Of Customs (Import)
Facts
The Appellant, M/s Tecmax Electronics, filed an appeal before the Delhi High Court challenging an order dated 7th January, 2025, passed by the Central Excise and Service Tax Appellate Tribunal (CESTAT). The CESTAT had rejected the Appellant's appeal on the grounds of non-compliance with the pre-deposit requirement. The dispute arose from an investigation into the import of LED TVs and brass ceramic cartridges between 2017 and 2018. A Show Cause Notice was issued on 4th October, 2022, leading to an Order-in-Original dated 29th September, 2023. This order rejected the declared value of imported goods, demanded differential duty of Rs. 3,18,48,890/-, and imposed penalties totaling Rs. 3,88,48,890/-. The Appellant's appeal before CESTAT was filed on 3rd May, 2024.
Held
The Court held that while the CESTAT does not have the power to entertain an appeal without the mandatory pre-deposit, the High Court, in its writ jurisdiction under Article 226 of the Constitution, can exercise discretion to waive this requirement in rare and exceptional circumstances, on a case-to-case basis, provided clear justification is made out. However, the Court found that the present case did not qualify as a rare case necessitating interference and thus was not inclined to grant a complete waiver of the pre-deposit. Nevertheless, acknowledging the Appellant's pleaded financial distress, the Court permitted the Appellant to deposit the pre-deposit amount of Rs. 23,88,667/- within a period of six months with the CESTAT. Upon such deposit, the appeal would be restored to its original position before the CESTAT. The Court did not decide on the merits of the underlying customs dispute.
Key Issues
1. Whether the High Court, in its writ jurisdiction under Article 226 of the Constitution of India, has the power to waive the mandatory pre-deposit requirement under Section 129E of the Customs Act, 1962, in rare and deserving cases. The Appellant argued that it lacked the financial capacity to pay the 7.5% pre-deposit on the total demand of Rs. 7,06,96,980/- due to severe financial hardships and existing loan burdens. It prayed for a waiver of the pre-deposit condition. The Respondent (Revenue) contended that the pre-deposit requirement under Section 129E of the Customs Act is mandatory and cannot be waived, citing several High Court decisions. The Respondent argued that the Appellant's prayer for waiver could not be entertained.
Sections Cited
Section 130, Section 129E, Section 28(8), Section 28AA, Section 114A, Section 114AA, Article 226
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Cause title — parties, addresses and appearances
JUDGMENT Prathiba M. Singh J.
This hearing has been done through hybrid mode.
This is an appeal under Section 130 of the Customs Act, 1962, inter alia, challenging the impugned order dated 7th January, 2025 passed by the Central Excise and Service Tax Appellate Tribunal (hereinafter “CESTAT”) by which the appeal of the Appellant has been rejected on the ground that the pre-deposit has not been made by the Appellant. Factual Background
The brief facts of the case are that during the relevant period between 2017 and 2018 the Petitioner had filed seven Bills of Entry for import of LED TVs and three Bills of Entry for import of brass ceramic cartridges. It is stated
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