GST
TRT-2025-
New Delhi High Court
Date:-28-05-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 28 April 2023
Parties: Mohammed Akmam Uddin Ahmed & Ors. Vs Commissioner Appeals Customs and Central Excise & Ors.
Facts –
- The Petitioner, Mohammed Akmam Uddin Ahmed & Ors. were travelling from Assam to Delhi, and they intended to depart for Bangkok on 20.09.2019. The screening of the bags carried by the Petitioners at IGI Airport revealed that the Petitioners were carrying Agarwood Chips and Agarwood Oil.
- Since the Petitioners failed to produce any valid document for the export of the said Agarwood Chips the petitioner was held to be in contravention of the provisions of the Act read with the provisions of the Foreign Trade (Development & Regulation) Act, 1992, and the same were confiscated under Section 113 of the Act. Accordingly, a Show Cause Notice dated 16.03.2020 issued under Section 124 of the Act.
- Confiscation along with penalty was confirmed on the petitioner. The appeals filed by the petitioners were returned by The Superintendent (Appeals), as the mandatory payment of 7.5% of the penalty imposed under Section 129E of the Act was not made.
Issue –
- Whether pre-deposit of penalty under Section 129E is mandatory to file the appeal?
Order –
- The Divisional Bench of Hon’ble High Court observed that the principle enunciated in the judgments of Pioneer Corporation case, Narender Yadav case, Shubh Impex case, Manoj Jha case and Ganesh Yadav case is that the Court has the power to exercise discretion to waive requirement of pre-deposit of penalty in “rare and deserving cases” where a clear justification is made out for interference.
- The “provisional” valuation appears to be taken verbatim from the Panchnama dated 20.09.2019. The SCN adopts the same “provisional international market value” as stated in the Panchnama/Seizure Memos. No clue is provided in the SCN as to the basis of valuation assigned to Agarwood Chips and Agarwood Oil.
- Although the OIO references the report of the Wildlife Inspector the OIO only reproduces the valuation as set forth in the SCN, the Panchnama and Seizure Memos. The OIO further clarifies that the quantum of penalty has been imposed keeping in consideration “the mens rea”, i.e., intent of smuggling and the specific roles of all the three Petitioners in the whole act of attempt to smuggling. The penalty imposed on each Petitioner appears to be a different percentage value of the goods recovered from each of them. There appears to be no logic or rationale for same.
- Admittedly, the Petitioners are poor daily wage earners who are unable to make a challenge to the seizure and confiscation on account of the penalty imposed on them. The aforegoing discussion on the prices and valuation of Agarwood Chips and Agarwood Oil suggest, albeit, prima facie, that no proper valuation of the goods seized was carried out by the Respondents.
- The Writ Petition is allowed. Respondent No. 1 is directed to decide the Appeals preferred by the Petitioners on merits, without insisting on the requirement of pre-deposit.
Download Case Law
