Judgment:
1. This application arises in an appeal filed by the applicant against the order of the Commissioner (Appeals), whereby the appeal preferred by the party against an adverse order passed by the Addl. Commissioner of Customs was rejected by the appellate authority on the ground of non-compliance with the provisions of Section 129E of the Customs Act, without going into the merits of the case.
2. The applicant prays for waiver of pre-deposit of an amount of penalty of Rs. 1 Lakh imposed on him by the adjudicating authority under Section 112 of the Act and for stay of recovery thereof, pending the appeal.
4. Ld. Advocate. Shri Imran Khan for the applicant has given a brief account of the facts of the case :- Accordingly, Indian currency of Rs. 4,98,800/- was seized along with certain documents from a vehicle hired by the present applicant on 8-4-97. The currency admittedly belonged to the applicant. In his statement recorded by the officers of Customs under Section 108 of the Customs Act, the applicant admitted that the currency was the sale proceeds of smuggled goods. A statement of Shri Sallamuddin (co-passenger) was also recorded by the officers, in which he, inter alia, corroborated the above statement of the applicant. The statement given by the Driver, Shri Ibrahim was also to some extent corroborative of the statement of the other two persons. On the basis of investigative results, the department framed a case against this applicant and, by show cause notice, proposed to confiscate the currency and impose penalty on him. The proposal was contested by the applicant. In adjudication of the dispute, the Additional Commissioner, inter alia, confiscated the currency under Section 121 of the Customs Act and imposed on the applicant a penalty of Rs. 1 lakh under Section 112 of the Act. Aggrieved by this order, the applicant preferred appeal to the Commissioner (Appeals). He also filed therein an application for waiver of pre-deposit and stay of recovery in respect of the penalty amount under Section 129E of the Act. The lower appellate authority offered opportunities of being heard on the stay, application. Those opportunities were not availed of by the party. The authority, therefore, disposed of the stay application by an ex parte order dated 1-2-2001, a copy of which is available on record. The applicant was directed to deposit the entire penalty amount within a period of three weeks from the date of receipt of the order. The applicant received the order on 13-3-2001 but did not deposit the amount. The lower appellate authority, later on, took up the appeal for final disposal, having found that its earlier direction for pre-deposit of the penalty amount under Section 129E had not been complied with. These proceedings culminated in the order impugned in the present appeal. Ld. Advocate further submits that the applicant has a strong prima facie case as the penalty imposed under Rule 112 of the Act is not sustainable in the absence of confiscation of any goods under Section 111 of the Act. He further submits that the entire case of the department is based on the applicant's confessional statement which was subsequently retracted by him. He submits that the confessional statement was given on 8-4-97 and the admissions contained in that statement were retracted by the applicant on 10-4-97 in his bail application before Court. In view of the very brief interregnum of one day between the dates of confessional statement and retraction, the adjudicating authority ought to have considered the retraction while examining the evidence in the case. Ld.
Counsel prays for waiver of pre-deposit and stay of recovery in respect of the penalty amount.
5. Ld. SDR, Shri A.S. Bedi submits that it was only in his letter dated 16-4-97 that the applicant had retracted his confessional statement before the Customs authorities. The retraction was after about a week from the date of confessional statement and the same had no bona fides.
Before the Commissioner (Appeals), the applicant has never been keen to prosecute his appeal and the rejection of the appeal cannot be faulted in such circumstances. The DR wants the present application to be rejected.
6. Having carefully examined the records of the case and the aforesaid submissions of the two sides, I am of the view that the appeal itself can be finally disposed of at this stage, I, therefore, allow the present application and proceed to deal with the appeal.
7. The appeal is against an ex parte order passed by the Commissioner (Appeals), whereby he has rejected the party's appeal filed against the order of the Addl. Commissioner. The rejection of the appeal is on the sole ground of non-compliance with the provisions of Section 129E and the merits of the case have not been looked into. It further appears from the record that, before so rejecting the appeal, the Commissioner (Appeals) did not, by notice, call upon the party to show cause why the appeal should not be rejected for non-compliance with Section 129E. The interim stay order dated 1-2-2001 also did not incorporate any such notice. Thus the proceedings of the Commissioner (Appeals) is grossly vitiated by violation of natural justice. This is enough to allow the present appeal and remand the matter to the lower appellate authority. But the lower appellate authority can hear the appeal before it only upon compliance, by the appellant, with the provisions of Section 129E. The appellant has to comply with those provisions by depositing the penalty in terms of the interim stay order of the Commissioner (Appeals). The Rajasthan High Court had held that interim orders passed under Section 35F of the Central Excise Act are appealable to this Tribunal. The provisions of Section 35F are pari materia to those of Section 129E. The ratio of the High Court's decision will equally be applicable to the order passed by the Commissioner (Appeals) under Section 129E of the Customs Act. The present appellant has not chosen to take recourse to the appellate remedy against the interim order passed by the Commissioner (Appeals).
The party has to carry that order into effect. I direct the appellant to deposit penalty amount of Rs. 1 Lakh in terms of the order dated 1-2-2001 of the Commissioner (Appeals), within a period of three weeks from today. Upon due compliance with this direction, the Commissioner (Appeals) shall dispose of the appeal before him by a speaking order in accordance with law and the principles of natural justice. The time granted by the Commissioner in the interim stay order dated 1-2-2001 will stand extended in terms of this order. The final order passed by the Commissioner (Appeals) stands set aside and the present appeal stands allowed by way of remand.