SHAFIQ UR RAHMAN Vs. UNION OF INDIA

JUDGEMENT

(1.) Notice was issued by the Commissioner of Customs to the petitioner to show cause why 7200 cartons of cigarettes shipped from tmphal, Manipur for New Delhi be not confiscated and penalty be not imposed. The same having been illegally imported without there being a valid licence for die purpose. The proceedings terminated into confiscation of Rs. 7,20,000.00 realised from the auction of the cigarettes during the course of adjudication proceedings and imposing a penalty of Rs. 10 lakhs under Section 112 of the Customs Act, 1962 against the petitioner. The petitioner preferred an appeal to the CEGAT and moved an application under Section 129E of the Customs Act seeking waiver as to predeposit and stay of recovery. The Tribunal has by its impugned order dated 11.2.1996 directed the petitioner to deposit a sum of Rs. 2 lakhs and subject to such deposit dispensing with recovery of the amount of penalty and stay of recovery proceedings during the pendency of the appeal. Time till 5.5.1998 has been allowed for making the deposit.

(2.) By this petition, it is submitted that the order made by the Tribunal is too onerous and based on non-application of mind to the existence of strong primafacie case in favour of the petitioner and to the fact that the petitioner is not possessed of sufficient means so as to pay the amount. It is submitted that failure of the petitioner to make the deposit would result in negativing his statutory right of appeal. Leained Counsel for the petitioner has submitted that cigarettes are not an article notified under Section 123 of the Customs Act. The cigarettes did not bear any foreign marking. There was 'reason to believe' that the goods were liable to confiscation within the meaning of Section 110 of the Customs Act. The seizure and consequently the confiscation is totally without jurisdiction. It is also submitted that before auctioning the seized cigarettes the mandatory provisions of Sub-section (18) of Section 110 of the Act were not complied with inasmuch as no sanction of the Magistrate was sought and no representative samples were drawn and preserved. For failure of compliance with the said mandatory provisions of law, the Counsel submits that the petitioner has a very strong prima facie case and he is sure of his success in appeal which cannot be belied prima facia. The Counsel for the petitioner also invited the attention of the Court to the statement made in paras 4 & 5 of the affidavit filed in support of the application before the Tribunal which reads as under:

(3.) There is substance in the submission of the learned Counsel for the petitioner. She has invited attention of the Court to Ashok Rubber Industries v. Collector of Central Excise, 1988 (34) ELT 528 (Kar.) and Rajinder Kumar R. Shah v. Collector of Customs, 1992 (58) ELT 64 (Kar.), wherein it has been held that failure on the part of the Tribunal to apply the test of prima fade case and failure to take into consideration whether the petitioner is or is not possessed of sufficient means vitiates the order of the Tribunal as to pre-deposit of duty as the same would be deemed to have been passed by ignoring the relevant factors. Ms. Luthra also submitted that the Tribunal has committed jurisdictional error in not keeping in view its own decision in Vinod Kumar Kaushal v. Commissioner of Customs, 1997 (95) ELT 593 (T). We find the contention advanced by the Counsel for the petitioner in this regard to have been raised before the Tribunal also but the Tribunal has failed to take full note of the said submissions and also failed to assign reasons for not accepting the same. There is no reason why the Tribunal should have disbelieved the statement of the petitioner made in paras 4 & 5 of the affidavit of the petitioner filed before it and quoted herein above.