CESTAT Cannot Entertain Appeal Without Pre-Deposit: Delhi High Court

The Delhi High Court observed that the Central Excise and Service Tax Appellate Tribunal (CESTAT) cannot entertain an appeal without pre-deposit as the same is mandatory under Section 129E of the Customs Act, however, the High Court can waive it in rare circumstances by exercising writ jurisdiction.

The Delhi High was hearing an appeal against the order of the CESTAT by which the appeal of the Appellant was rejected on the ground that the pre-deposit had not been made by the Appellant.

The Bench of Justice Pratibha M. Singh and Justice Shail Jain observed, “In view of the above, the law on this issue is now clear, that 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.”

Advocate Vidushi Shubham represented the Appellant, while Advocate Shubham Tyagi represented the Respondent.

Case Brief

An appeal was filed against the order of the CESTAT by which the appeal of the Appellant was rejected on the ground that the pre-deposit had not been made by the Appellant.

The Appellant contended that the total demand raised against the Appellant was Rs. 7,06,96,980/-, but the Appellant was not in the financial capacity to pay the 7.5% of the said demand and penalty as pre-deposit. It was prayed by the Appellant that the condition for pre-deposit be waived by the Court.

While, the Respondents contended that the requirement of pre-deposit under Section 129E of the Customs Act was a mandatory requirement and the prayer for waiver of the same cannot be entertained by the Court.

Court’s Observation

The issue before the High Court was whether the Court has the discretion to waive the mandatory pre-deposit under Section 129E of the Customs Act, 1962?

The High Court emphasised that in various judgments it has been held that after the amendment of Section 129E of the Customs Act, 1962 in 2014, the pre-deposit in terms of the said provision would have to be paid mandatorily.

Upon relying on judgments of the Supreme Court, the Court held, “Thus, in view of the above legal position, the pre-deposit under Section 129E of the Act would also be mandatory and the CESTAT cannot entertain the appeal without the pre-deposit.”

Further, the High Court highlighted that in exercise of writ jurisdiction, the High Court may waive the pre-deposit in rare circumstances, on a case to case basis.

“It would be relevant to note that the Co-ordinate Bench of this Court in the above decision has held that in exercise of the jurisdiction under Article 226 of the Constitution of India, in appropriate cases the mandatory pre-deposit may be condoned”, the Court added.

However, the Court refused to grant waiver from pre-deposit in exercise of writ jurisdiction since the present case was not a rare case necessitating interference.

While disposing of the appeal, the Court said, “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.”

Accordingly, the Appeal was disposed of.

Cause Title: M/s Tecmax Electronics V. The Principal Commissioner of Customs (Neutral Citation: 2025:DHC:7568-DB)

Appearance:

Appellant: Advocates Vidushi Shubham and Mayank Sharma

Respondent: Advocates Shubham Tyagi, Navruti Ojha, Rishabh Chauhan & Mr. Harish Saini

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