Case Note & Summary
The petitioner, M/s Bhatia Global Trading Ltd., filed a writ petition under Articles 226 and 227 of the Constitution before the High Court of Karnataka at Bengaluru, aggrieved by a communication dated 12.8.2015 (Annexure F) from the Superintendent (Adjn.) on behalf of the Commissioner of Customs, Mangalore, rejecting the petitioner's request to adjust deposits made during investigation and audit towards the mandatory pre-deposit under Section 129E of the Customs Act, 1962 for maintaining an appeal before CESTAT. Subsequently, the Assistant Commissioner (Recovery) issued a detention notice dated 5.11.2015 (Annexure H) under Section 142(1)(a) of the Customs Act, detaining and restricting the petitioner from selling any goods under the control of Customs and Central Excise officers. The petitioner had filed an appeal before CESTAT on 18.9.2014 against an adjudication order dated 26.3.2014 (Annexure C) demanding Rs.8.31 crores, requiring a pre-deposit of 10% or 7.5% under Section 129E. The petitioner represented to the Commissioner on 4.8.2015 (Annexure E) that it had deposited Rs.1,49,59,384/- during investigation and audit and sought adjustment of a part of that amount towards the pre-deposit. The Commissioner rejected this request via Annexure F, and the petitioner reiterated the request on 7.10.2015 (Annexure G). The court considered the submissions of the petitioner's counsel, Sri S. Parthasarathi, and the respondents' counsel, Sri C. Shashikantha. The court held that the amounts deposited during investigation and audit could be adjusted towards the pre-deposit requirement under Section 129E, and quashed the detention notice. The court directed the respondents to consider the petitioner's representation for adjustment and to release the goods from detention. The writ petition was allowed with the above directions.
Headnote
A) Customs Law - Pre-deposit Adjustment - Section 129E Customs Act, 1962 - The petitioner-assessee sought adjustment of deposits made during investigation and audit towards the mandatory pre-deposit for appeal. The court held that such deposits can be adjusted, and the detention notice under Section 142(1)(a) was set aside. (Paras 1-4) B) Customs Law - Detention Notice - Section 142(1)(a) Customs Act, 1962 - The detention notice restricting sale of goods was quashed as the assessee had already made substantial deposits. (Paras 2-4)
Issue of Consideration
Whether amounts deposited by the assessee during investigation and audit can be adjusted towards the mandatory pre-deposit required under Section 129E of the Customs Act, 1962 for maintaining an appeal before CESTAT.
Final Decision
The writ petition is allowed. The impugned communication dated 12.8.2015 (Annexure F) and detention notice dated 5.11.2015 (Annexure H) are quashed. The respondents are directed to consider the petitioner's representation for adjustment of deposits towards the pre-deposit under Section 129E and to release the goods from detention.
Law Points
- Pre-deposit adjustment
- Section 129E Customs Act
- 1962
- Detention notice
- Recovery proceedings
- Natural justice
