Case Note & Summary
The appeal arose from the dismissal in limine of a writ petition by the Circuit Bench of the Punjab High Court at New Delhi. The appellant had been penalised by the Collector of Customs and Excise, Cochin, for his role in the smuggling of a ruby stone. The Collector confiscated the ruby stone and levied a personal penalty of Rs. 20,000 on the appellant under Section 112 of the Customs Act, 1962, finding that the appellant was the prime mover behind the smuggling. The appellant filed an appeal before the Central Board of Excise and Customs under Section 128, contending that he was innocent and that depositing the penalty would cause undue hardship. He requested waiver of the deposit under Section 129. The Board, after hearing the appellant on the preliminary point of waiver, agreed to consider the appeal on merits if the appellant deposited Rs. 10,000, half of the penalty, within 14 days. The appellant failed to deposit even that amount despite receiving notice through his lawyer. Consequently, the Board rejected the appeal on 7 December 1965 for non-compliance with Section 129. The appellant then filed a revision before the Government of India under Section 130. The Government gave him a further opportunity to deposit Rs. 10,000, but he again failed to do so. The revision was rejected on 23 April 1966. The appellant was also prosecuted under Section 135 of the Customs Act, but the District Magistrate, Ernakulam, acquitted him and the co-accused on 28 February 1966. The appellant's writ petition to quash the orders of the Board and the Government was dismissed in limine by the Punjab High Court on 24 August 1966. The main legal issues before the Supreme Court were whether Section 129 gives power to dismiss an appeal for non-compliance with the deposit requirement and whether rejection of the appeal amounts to approval of the original penalty order. The appellant argued that Section 129 does not expressly provide for dismissal of an appeal for non-deposit and that rejection had the effect of approving the Collector's order. The respondent contended that the Board acted strictly according to law and that the appellant, having been given opportunities to deposit half the penalty, was entirely to blame for the consequences of rejection. The Supreme Court held that Section 129(1) makes it obligatory to deposit the penalty pending appeal. The proviso gives the appellate authority discretion to dispense with the deposit unconditionally or subject to conditions. Even though the section does not expressly provide for rejection of an appeal for non-compliance, the appellate authority is competent to reject the appeal in those circumstances, because otherwise the appeal would remain pending without serving any purpose. The Court further held that rejection of the appeal and revision meant that the appellant was bound by the order of the Collector, but that result was brought about only by the appellant's own default. The Supreme Court dismissed the appeal and upheld the orders rejecting the appeal and revision.
Headnote
A) Customs Law - Appeals and Deposit of Penalty - Section 129(1) Customs Act, 1962 - Power to Reject Appeal for Non-Deposit - Section 129(1) makes deposit of penalty mandatory pending appeal, and the proviso allows discretionary waiver. The Appellate Authority is competent to reject an appeal for non-compliance with the deposit requirement or any conditional order passed under the proviso, even though the section does not expressly provide for rejection, because otherwise the appeal would remain on file without being capable of disposal on merits. Held that the Central Board of Excise and Customs was justified in rejecting the appeal for non-deposit. (Paras 362 F-G; 364 A-C) B) Customs Law - Effect of Rejection of Appeal - Section 129(1) Customs Act, 1962 - Default by Appellant - Rejection of the appeal and revision due to failure to deposit the penalty as ordered means the appellant is bound by the original order of the Collector, but that result is brought about only by the appellant's own default and does not constitute approval of the Collector's order. Held that the Board did not approve the penalty order merely by rejecting the appeal. (Paras 364 D-E)
Issue of Consideration
Whether Section 129 of the Customs Act, 1962 gives power to the appellate authority to dismiss an appeal for non-compliance with the requirements regarding deposit of penalty; and whether rejection of the appeal for non-deposit amounts to approval of the original order levying penalty.
Final Decision
The Supreme Court dismissed the appeal and upheld the orders of the Central Board of Excise and Customs and the Government of India rejecting the appeal and revision. The Court held that the appellate authority is competent to reject an appeal for non-compliance with the deposit requirement under Section 129(1) of the Customs Act, 1962, and that such rejection results from the appellant's own default, not from approval of the original order.
Law Points
- Section 129(1) makes it obligatory on the person filing an appeal to deposit the penalty levied pending the disposal of the appeal on merits
- the proviso to Section 129 gives power to the appellate authority to dispense with such deposit unconditionally or subject to conditions
- even without express provision
- the appellate authority is competent to reject the appeal for non-compliance with the deposit requirement or any order passed under the proviso
- otherwise the appeal would remain pending with no purpose
- rejection of the appeal and revision due to non-deposit means the appellant is bound by the original order
- but that result is brought about only by the appellant's default and does not amount to approval of the original order
