CESTAT Can't Admit Appeal Without Pre-Deposit But High Court Can Waive It In 'Rare' Circumstances: Delhi High Court
The Delhi High Court has held that the provision of pre-deposit for preferring an appeal before the Central Excise and Service Tax Appellate Tribunal is mandatory and the forum has no power to admit any appeal without the same.However, a division bench of Justices Prathiba M. Singh and Shail Jain further added that the High Court may, in rare circumstances, waive off the said deposit....
The Delhi High Court has held that the provision of pre-deposit for preferring an appeal before the Central Excise and Service Tax Appellate Tribunal is mandatory and the forum has no power to admit any appeal without the same.
However, a division bench of Justices Prathiba M. Singh and Shail Jain further added that the High Court may, in rare circumstances, waive off the said deposit. It observed,
“CESTAT does not have the power to admit appeal without the pre-deposit, however, this Court in exercise of writ jurisdiction may waive the same in rare circumstances, on a case to case basis.”
In the case at hand, penalty was imposed upon the Appellant-firm for alleged misdeclaration of import goods. It was aggrieved by rejection of its appeal by the CESTAT on the ground that the pre-deposit had not been made.
Appellant submitted that the total demand raised against it (Rs. 7,06,96,980/-) is a substantial amount and it does not have the financial capacity to pay 7.5% as pre-deposit.
It cited Mohd. Akmam Uddin Ahmed v. Commr. (2023) wherein a Co-ordinate Bench held that High Court has the power to exercise discretion to waive the pre-deposit in rare and deserving cases.
The Department on the other hand argued that requirement of pre-deposit under Section 129E of the Customs Act is mandatory and the prayer for waiver of the same cannot be entertained.
It cited Diamond Entertainment Technologies (P) Ltd. v. Commr. (CGST) (2019) which was passed in respect of Section 35F of the Central Excise Act, 1944, which also has the mandatory requirement of pre-deposit pari materia to the requirement under Section 129E of the Customs Act.
The High Court agreed with the Customs that pre-deposit under Section 129E of the Customs Act, like Section 35F of the Excise Act, would be mandatory and the CESTAT cannot entertain the appeal without the pre-deposit.
It noted that the provision (Section 129E) clearly stipulates that the Tribunal shall not entertain any appeal, unless the appellant has deposited seven and a half per cent of the duty.
However, it was also of the view that in exercise of jurisdiction under Article 226 of the Constitution, in appropriate cases, the mandatory predeposit may be condoned by the High Court.
It referred to Diamond Entertainment Technologies (supra) where it was held that the Court has the power to exercise discretion to waive of the mandatory pre-deposit in “rare and deserving cases”.
Nonetheless, the Court was not inclined to grant waiver in the present case stating that it is not a rare case necessitating interference.
“However, since there is a financial distress which is pleaded, the Appellant is permitted to pay the pre-deposit of Rs. 23,88,667/- within a period of six months with the CESTAT. If the said amount is deposited within six months, the appeal shall be restored to its original position,” the Court ordered.
Appearance: Ms. Vidushi Shubham & Mr. Mayank Sharma, Advs. for Appellant; Mr. Shubham Tyagi, SSC, CBIC with Ms. Navruti Ojha, Mr. Rishabh Chauhan & Mr. Harish Saini, Advs. for Respondent
Case title: M/S Tecmax Electronics v. The Principal Commissioner Of Customs (Import)
Citation: 2025 LiveLaw (Del) 1075
Case no.: CUSAA 121/2025