The Hon’ble Supreme Court vide its order dated 28^th February 2022 in the matter of Chandra Sekhar Jha Vs. Union of India & Anr. in Civil Appeal No. – 1566 of 2022 held that it is mandatory to make pre-deposit under Section 129E of the Customs Act, 1862 even if the incident causing the appeal is prior to amendment of 06.08.2014 in Section 129E.

The Appellant preferred the appeal before the Hon’ble Apex Court challenging the order passed by the High Court whereby the order passed by the Tribunal under Section 129E of the Customs Act, 1862 was upheld by the High Court.

Facts: –

• The appellant while travelling in the train with another person was intercepted and a case of carrying smuggled Gold into India from Bangladesh was made against him.
• A common order was passed by the Commissioner of Customs (Preventive) West Bengal, Kolkata, while concluding the proceedings a penalty of Rs. 75 Lakh was imposed on the Appellant and the other persons was also asked to pay the penalty.
• The appellant and the other person, against the aforesaid order passed by the Commissioner preferred an appeal before the tribunal which was dismissed for want of pre-deposit, later an appeal being preferred before the High Court against the said Tribunal’s order was also dismissed and the Tribunal’s order was upheld.

Appellant’s Stand: –

• It was submitted on behalf of the appellant the demand for pre-deposit is not warranted in law and this case should be dealt with the provisions of Section 129E of the Act, as stood prior to amendment of 06.08.2014.
• The act relates to the year 2013 i.e., 28.02.2013, prior to substitution in Section 129E so the case must be governed by provisions prior to substitution.
• The amount of pre-deposit involved in the case is harsh and onerous however prior to the amendment of Section 129E, power was available with Appellate Authority with respect to demand of pre-deposit.

Held: –

• The Hon’ble Supreme Court after considering the law stated in Section 129E of the Customs Act, 1862, prior and after the amendment of 06.08.2014 (substitution by Act 25 of 2014) observed that on perusal of Section 129E, it is quite evident that the law giver has intended to bring a sweeping change from the previous regime enter into era, wherein a certain percentage (7.5%) of the amount in dispute was fixed as pre-deposit.
• Under the earlier regime whole amount in dispute had to be deposited however the appellate authority was provided with the powers of dispensing with the amount of pre-deposit subject to conditions to safeguard the interest of revenue.
• The Hon’ble Court considering the contention of the appellant regarding hardship referred to decision of the Supreme Court only in the matter of Benara Valves Ltd. and others vs. Commissioner of Central Excise and another, reported in (2006) 13 SCC 347, observed that sharp departure from the previous regime has brought down the amount of pre-deposit from 100% to 7.5% however the discretion of the appellate authority with respect to pre-deposit has been taken away.
• Thereafter discussing the Section 129E, prior or after the amendment, at length observed that the substitution of provisions has resulted in repeal of earlier provisions and its replacement by the new provisions.
• The Hon’ble Court taking note of the argument of the Appellant that ‘incident took place in the year 2013 and the appellant must be given the benefit of powers available under the substituted provisions’ held that the contention of the appellant is not acceptable as the substitution has resulted in re-enactment of provisions of Section 129E and if the contention of the Appellant is accepted, it would give rise to dichotomy in law.
• Further, it was held that the Commissioner order was passed in 2015 i.e. 23.11.2015 and the appellant preferred the appeal before the tribunal in 2017, after the amendment, the appellant now has to pay a lesser amount in certain percentage as compared to earlier regime in terms of Section 129 however he is willing to avail the benefit of discretionary powers of the appellate authority provided in the previous regime, which would be available to the appellant only if he would have filed the appeal prior to amendment of 2014. Thus, there is no merit in the contention of the appellant.

The Hon’ble Supreme Court with the above findings dismissed the appeal filed by the appellant however in the interest of justice extended the time for complying with Section 129E by two months from that day.