Sunil Kumar Patwari v. The Additional Commissioner, Airport & Air Cargo Complex, NSCBI, Airport & ors.

#2. Mr. Mukherjee, learned senior advocate representing the petitioner by drawing attention of this Court to the paragraph 36 of the show-cause would submit that it is an admitted position that M/s Reach Infocom Technology Pvt. Ltd. (hereinafter referred to as the “importer”) is a regular importer of Mobile phone and laptop of Reach brand from China. It is also an admitted position that the importer had paid Countervailing Duty (CVD) on the RSP/MRP, less abatement, as declared by them in the Bills of Entry filed before the Customs Authorities at the time of importation. However, at a later stage, after clearance from Customs, the 2 MRP stickers of such goods were replaced with the stickers having higher MRP and the said goods were sold to ultimate customers at a higher MRP. On the basis of the above allegations, the petitioner including the other directors of the importer were called up to show-cause as to why: (i) The goods having total assessable value of Rs. 3,44,550/- imported under Bills of Entry as detailed in “Annexure-III” to this notice and seized vide seizure memo dated 24.05.2019, should not confiscated under Section 111(m) of the Customs Act, 1962; (ii) The revised/changed RSP, as mentioned “Annexure-III” to this Notice, should not be taken as the correct RSP for assessment of Additional Duties of Customs payable thereon in terms of Section 3 of the Customs Tariff Act, 1975 read with Section 4A of the Central Excise Act, 1944 and the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008; (iii) In case, redemption of above confiscated goods is allowed under Section 125 of the Customs Act, 1962, differential duty amounting to Rs. 15,648/- (Rupees Fifteen Thousand Six Hundred and Forty Eight only), as detailed “Annexure-III”, should not be demanded and recovered in terms of the provisions of Section 125(2) of the Customs Act, 1962 read with Section 28(4) of the Customs Act, 1962 along with applicable interest under the provisions of Section 28AA of the Customs Act, 1962; 3 (iv) Penalty under Section 112(a)(ii) and Section 114AA of the Customs Act, 1962, should not be imposed on them.

#3. Mr. Mukherjee, would submit that the customs authorities do not have the jurisdiction and/or competence to question any act or action of the importer once, the imported goods are cleared in accordance with Section 47 of the Customs Act, 1962 (hereinafter referred to as the “said Act”). Notwithstanding the aforesaid, pursuant to the show-cause by the order in original dated 4th March, 2024, a penalty of Rs.10,00,00,000/- has been imposed on the petitioner under Section 114AA of the said Act.

#4. Mr. Mukherjee, would further submit that the aforesaid imposition of penalty is without jurisdiction. Although, the petitioner had preferred an appeal from the aforesaid order, the same does not and cannot regularize the direction for imposition of penalty since the aforesaid order is without jurisdiction.

#5. By placing the order dated 15th October, 2024, it is submitted that the Commissioner of Customs did not enquire into the case made out by the petitioner and had dismissed the appeal in a mechanical manner. Questioning not only the initiation of proceedings but also the orders passed by the adjudicating authority being the order dated 4th March, 2024 and the order passed by the appellate authority refusing to entertain the appeal by reasons of the failure on the part of the petitioner to put in the pre deposit in terms of Section 129E of the said Act the writ petition has been filed. 4

#6. I find that in the instant case, on the basis of the show- cause as aforesaid, the adjudicating authority had assessed the value of the imported goods imported under 67 number of Bills of entries which are listed in annexures - I, II & III of the show-cause notice, which had been seized vide Seizure Memo dated 24th March, 2019, to be confiscated under Section 111(m) of the said Act. Proceeding on such premise, the adjudicating authority was, inter alia, pleased to observe and direct as follows: 5

#7. Challenging such direction, the petitioner had approached the appellate authority. The Commissioner of Customs (appeals), Kolkata by the order impugned dated 15th October, 2024 had dismissed the said appeal on the ground of non-compliance of provisions of Section 129E of the said Act. To morefully appreciate the aforesaid provision, Section 129E of the said Act is extracted herein below: “129E. Deposit of certain percentage of duty demanded or penalty imposed before filing appeal. - 6 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 the 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 officerof customs lower in rank than [Principal Commissioner 2 Commissioner of Customs]; of Customs (ii) against the decision or order referred to in clause (a) of sub-section (1)of section 129A , 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 129A , 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.]”

#8. Having regard to the specific embargo provided for in Section 129E of the said Act, the appellate authority being the Commissioner of appeals, in my view, is estopped from entertaining an appeal, if the pre-deposit as provided therein is not furnished. Admittedly, in this case, the petitioner did not comply with the direction for payment of pre-deposit which prompted the appellate authority to dismiss the appeal.

#9. Interestingly however, Mr. Mukherjee representing the petitioner has attempted to make out a case that since, 7 the entire proceedings are without jurisdiction, non- compliance of the direction for payment of pre-deposit which resulted in dismissal of the appeal cannot stand in the way of the petitioner in preferring the writ petition. I however, find that the writ petitioner did not straight away invoke the writ jurisdiction prior to preferring the said appeal. The petitioner had in fact while adhering to the statutory provisions applied before the appellate authority. Since, the petitioner had invoked the statutory remedy, the petitioner was obliged to adhere to the provisions of the statute for maintaining the statutory appeal. The petitioner having failed to comply with the statutory provisions, in my view it would not be fit and proper for this Court to exercise discretion in favour of the petitioner. As such I find no scope to entertain the writ petition. However, the petitioner may avail further statutory remedy as may be advised.

#10. With the above observations and directions, the writ petition is dismissed without any order as to costs.

#11. Since the respondents have not been called upon to file affidavit, the allegations made in the writ petition are deemed not to have been admitted by the respondents. (Raja Basu Chowdhury, J.)