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Telangana High Court
Shiva Prasad Chennuri vs The Union Of India on 26 March, 2025
Author: P.Sam Koshy
Bench: P.Sam Koshy
THE HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
THE HONOURABLE SRI JUSTICE NARSING RAO
NANDIKONDA
W.P. No.9095 OF 2025
ORDER:
(Per Hon’ble Sri Justice P.Sam Koshy)
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
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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. 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
3this 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
4the 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.
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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
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ANOTHER1 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”.
xxxxx
xxxxx
“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. 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.
1
Civil Appeal No.1566 of 2022
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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.
__________________
P.SAM KOSHY, J
_______________________________
NARSING RAO NANDIKONDA, J
26.03.2025
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