Active Involvement In Customs Duty Evasion: Delhi High Court Dismisses Plea Seekings Directions For Pre-Deposit Waiver
The Delhi High Court, while dismissing the petition seeking directions for waiver of the pre-deposit requirement as placed in terms of Section 129E of the Customs Act, 1962, noted that the case of the petitioner does not fall under the category of rare and exceptional cases.The bench of Justice Yashwant Varma and Justice Dharmesh Sharma has observed that the petitioner was complicit and...
The Delhi High Court, while dismissing the petition seeking directions for waiver of the pre-deposit requirement as placed in terms of Section 129E of the Customs Act, 1962, noted that the case of the petitioner does not fall under the category of rare and exceptional cases.
The bench of Justice Yashwant Varma and Justice Dharmesh Sharma has observed that the petitioner was complicit and actively involved in the evasion of duty and the intent of these parties to mis-declare imports while acting in concert.
The respondents/department, on the basis of the intelligence received, came to the conclusion that various importers, including M/s M.M. Enterprises, were illegally importing worn clothing and electronic goods by misdeclaring them to be “assorted printed books.".
The Directorate of Revenue Intelligence officers, on the basis of inputs received, came to the opinion that those importers were deliberately adopting means to evade payment of appropriate customs duty.
A show cause notice was issued to the petitioner, to which a reply was submitted for the consideration of the adjudicating authority. The Order came to be passed with the Adjudicating Authority holding the petitioner liable to pay a penalty of Rs. 25,00,000 under Section 112 and Rs. 1,00,00,000 under Section 114AA.
The petitioner filed an appeal before the CESTAT. However, it was not numbered as the petitioner did not comply with the provisions of Section 129E.
The petitioner approached the Court since Section 129E no longer incorporates a provision that may be invoked by either the Commissioner (Appeals) Customs and Central Excise or the Customs, Excise, and Service Tax Appellate Tribunal to waive the condition of pre-deposit in cases of undue hardship.
Section 129E, prior to its amendment, conferred discretion on the Commissioner (Appeals) and CESTAT to dispense with the deposit liable to be made while pursuing an appeal where it was found that the deposit of duty, interest, or penalty levied would cause undue hardship.
The petitioner contended that notwithstanding the deletion of the provision from Section 129E, the High Court, by virtue of its constitutional powers, would still be entitled to waive the condition of a pre-deposit in appropriate cases. The writ jurisdiction would be liable to be exercised in rare but compelling and deserving cases when the cause of justice requires such a reduction.
The court noted that the case would fall into the category of rare and exceptional cases. The circumstances do not warrant the invocation of the extraordinary power conferred by Article 226 of the Constitution.
Counsel For Petitioner: Deepak Gandhi
Counsel For Respondent: Satish Kumar
Case Title: Ajay Sagar Versus Principal Commissioner Of Customs (Import)
Citation: 2023 LiveLaw (Del) 961
Case No.: W.P.(C) 4386/2023