CHANDRA SEKHAR JHAversusUNION OF INDIA & ANR.

                        [2022] 1 S.C.R. 743                              743


                    CHANDRA SEKHAR JHA                                   A
                                  v.
                    UNION OF INDIA & ANR.
                   (Civil Appeal No. 1566 of 2022)
                       FEBRUARY 28, 2022                                 B
        [K. M. JOSEPH AND HRISHIKESH ROY, JJ.]
       Customs Act, 1962: s. 129E – Deposit of certain percentage
of duty demanded or penalty imposed before filing appeal –
Appellant intercepted with smuggled gold - Imposition of penalty of
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Rs.75 lakhs – Challenged to, by the appellant – Appeals dismissed
by the tribunal since the requirement of the pre-deposit of the amount
u/s. 129E not complied with – High Court upheld the order –
Appellant’s case that since the incident took place in 2013, he must
be governed by s. 129E prior to the substitution wherein there was
a power available with the appellate body in the matter of demand        D
of pre-deposit – On appeal, held: Substitution of a provision results
in repeal of the earlier provision and its replacement by the new
provision – On facts, substitution has effected a repeal and it has
re-enacted the provision as it is contained in s. 129E – Order passed
by the Commissioner is of 2015, after the substitution of s. 129E
                                                                         E
and the appellant filed the appeal in 2017 – Appellant is called
upon to pay the amount in terms of s. 129E after the substitution, a
far lesser amount in terms of the fixed percentage as provided in s.
129E before the substitution – However, the appellant, wishes to
have the benefit of the proviso which, in fact, appropriately would
apply only to a case where the appellant is called upon to pay the       F
full amount u/s. 129E under the earlier avtar – Legislative intention
would clearly be to not to allow the appellant to avail the benefit of
the discretionary power available under the proviso to the substituted
provision u/s. 129E – Thus, the appellant’s case cannot be accepted,
however, in the interest of justice, appellant given two months time
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to comply with the requirement of s. 129E of the Act.
      Benara Valves Ltd. and others v. Commissioner of
      Central Excise and another (2006) 13 SCC 347 : [2006]
      9 Suppl. SCR 341 – referred to.
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                                 743
744             SUPREME COURT REPORTS                              [2022] 1 S.C.R.


A            Principles on Statutory Interpretation (12th Edition)
             page No. 676 – referred to.
                                Case Law Reference
      [2006] 9 Suppl. SCR 341             referred to                 Para 7
B           CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1566
      of 2022.
             From the Judgment and Order dated 16.12.2021 of the High Court
      at Calcutta in CUSTA/12/2018.
             Galib Kabir, Sandeep Singh, Advs. for the Appellant.
C
             The Order of the Court was passed by
             K. M. JOSEPH, J.
             1. By the impugned order, the High Court has rejected the appeal
      carried by the appellant against the order passed by the Tribunal under
D     Section 129E of the Customs Act, 1962 (hereinafter referred to as the
      ‘Act’). This is for the reason that the appellant has not complied with
      the requirement under Section 129E of the Act, as regards, the pre-
      deposit of the amount in terms of the said provision.
             2. The appellant while traveling in a train was intercepted. The
E     case against him appears to be that he was carrying Gold smuggled into
      India from Bangladesh,and was accompanied with another person also.
      On conclusion of the proceedings, the Commissioner of Customs
      (Preventive) West Bengal, Kolkata passed a common order, wherein
      the appellant came to be visited with penalty in a sum of Rs.75 lakhs. It
      appears that the other person was also asked to pay penalty. They
F     preferred appeals before the Customs, Excise and Service Tax Appellate
      Tribunal, Kolkata in the year 2017. The Tribunal finding that the appellant
      has not made pre-deposit dismissed the appeal. It is this order which
      was put in issue before the High Court and the High Court has upheld
      the order.
G             3. We heard Mr. GalibKabir, learned counsel for the appellant.
      Learned counsel for the appellant would point out that demand for pre-
      deposit is not warranted in law. His argument is premised on the fact
      that the appellant is entitled to have this case dealt with, under the provision
      of 129E of the Act, which was in the statute book prior to the present
H     avatar, substituting it by Act 25 of 2014.
       CHANDRA SEKHAR JHA v. UNION OF INDIA & ANR.                             745
                   [K. M. JOSEPH, J.]

       4. Section 129E of the Customs Act, 1962, as it stood before            A
substitution by Act 25 of 2014, reads as follows:-
      “129E. Deposit,pending appeal, of duty and interest, demanded or
      penalty levied.- Where in any appeal under this Chapter, the
      decision or order appealed against relates to any duty any interest
      demanded in respect of goods which are not under the control of          B
      the customs authorities or any penalty levied of goods which are
      not under the control of the customs authorities or any penalty
      levied under this Act, the person desirous of appealing against
      such decision or order shall, pending levied under this Act, the
      person desirous of appealing against such decision or order shall,
      pending the appeal, deposit with the proper officer duty and interest    C
      demanded or the penalty levied:
      Provided that where in any particular case, the Commissioner
      (Appeals) or the Appellate Tribunal is of the opinion that the deposit
      of duty and interest demanded or penalty levied would cause under
      hardship to such person, the Commissioner (Appeals) or, as the           D
      case may be, the Appellate Tribunal may dispense with such deposit
      subject to such conditions as he or it may deem fit to impose so as
      to safeguard the interests of revenue:
              Provided further that where an application is filed before
      the Commissioner (Appeals) for dispensing with the deposit of            E
      duty and interest demanded or penalty levied under the first proviso,
      the Commissioner (Appeals) shall, where it is possible to do so,
      decide such application within thirty days from the date of its
      filing.”
      It is thereafter that the present version was inserted with effect       F
from dated 06.08.2014, which reads as follow:-
      “129-E. Deposit of certain percentage of duty demanded or penalty
      imposed before filing appeal.—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        G
             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 officer of customs lower in rank
             than the Principal Commissioner of Customs or
             Commissioner of Customs;                                          H
746             SUPREME COURT REPORTS                            [2022] 1 S.C.R.


A            (ii)    against the decision or order referred to in clause (a) of
                     sub-section (1) of Section 129-A, 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;
B
             (iii)   against the decision or order referred to in clause (b) of
                     sub-section (1) of Section 129-A, 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
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                     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
D                    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.]”
              5. The specific argument of the learned counsel for the appellant
      is that in the case of the appellant in view of the fact that the act relates
E     to the year 2013 (namely on 28.2.2013), the appellant must be governed
      by Section 129E prior to the substitution. This is for the reason that the
      substitution of Section 129A was effected on 06.08.2014 which is after
      the date of the incident (28.02.2013). On the basis of the same, it is
      contended that under Section 129E, as it stood, prior to the substitution
F     there was a power available with the Appellate Authority in the matter
      of demand of pre-deposit. He would point out that the amount for pre-
      deposit in his case is harsh and onerous.
             6. On a conspectus of the provisions of Section 129E before and
      after the substitution, it becomes clear that the law giver has intended to
G     bring about a sweeping change from the previous regime and usher in a
      new era, under which the amount to be deposited was scaled down and
      pegged at a certain percentage of the amount in dispute. In other words,
      while under Section 129A, as it stood prior to the substitution, the appellant
      was to deposit the duty and the interest demanded or the penalty levied,in
      the present regime, the appeal is maintainable upon the appellant depositing
H     seven and the half percent of the amount. Under the earlier regime, in
        CHANDRA SEKHAR JHA v. UNION OF INDIA & ANR.                                  747
                    [K. M. JOSEPH, J.]

other words the entire amount which was in dispute had to be deposited.              A
Under the earlier avatar of Section 129E, the law giver also clothed the
appellate body with power as contained in the first proviso. The first
proviso provided the Commissioner (Appeals) or as the case may be,
Appellate Tribunal the power to dispense with such deposit, subject to
conditions as he deemed fit to impose to safeguard the interest of the
                                                                                     B
revenue.
      7. The question whether it is undue hardship has been the subject
matter of the judgment of this Court in Benara Valves Ltd. and others
vs. Commissioner of Central Excise and another, reported in (2006)
13 SCC 347, wherein it,inter alia, held as follow:-
                                                                                     C
       “13. For a hardship to be “undue” it must be shown that the
       particular burden to observe or perform the requirement is out of
       proportion to the nature of the requirement itself, and the benefit
       which the applicant would derive from compliance with it.”
      8. It is in sharp departure from the previous regime that the new              D
provision has been enacted. Under the new regime, on the one hand, the
amount to be deposited to maintain the appeal has been reduced from
100% to 7.5% but the discretion which was made available to the
appellate body to scale down the pre-deposit has been taken away.
       9. The first proviso of Section 129E of the presentSection enacts             E
a limitation on the total amount which can be demanded by way of pre-
deposit. The first proviso provides that the amount required to be deposited
should not exceed Rs.10 Crores. In this regard, the law giver has
purported to grant relief to an appellant. The second proviso contemplates
that Section 129(e) as substituted would not apply to stay applications              F
and appeals which are pending before the Appellate Authority prior to
the commencement of the Finance Act (2) of 2014. The amended
provision, as we have already noticed has come into force from
06.08.2014. Therefore, in regard to stay applications and appeals which
were pending before any Appellate Authority prior to commencement
of The Finance (No.2) Act 2014, Section 129E as substituted would not                G
apply. Substitution of a provision results in repeal of the earlier provision
and its replacement by the new provision.1

1
 [See in this regard, a discussion in Justice G. P. Singh, Principles on Statutory
Interpretation (12thEdition) page No.676.                                            H
748                SUPREME COURT REPORTS                       [2022] 1 S.C.R.


A              10. As far as the argument of the appellant that for the reason
      that the incident which triggered the appeal filed by the appellant took
      place in the year 2013,the appellant must be given the benefit of the
      power available under the substituted provision, it does not appeal to us.
      The substitution has effected a repeal and it has re-enactedthe provision
      as it is contained in Section 129E. In fact, the acceptance of the argument
B
      would involve a dichotomy in law. On the one hand, what the appellant is
      called upon to pay is not the full amount as is contemplated in Section
      129(E) before the substitution. The order passed by the Commissioner
      is dated 23.11.2015 which is after the substitution of Section 129E. The
      appellant filed the appeal in 2017.What the appellant is called upon to
C     pay is the amount in terms of Section 129E after the substitution, namely,
      the far lesser amount in terms of the fixed percentage as provided in
      section 129E. The appellant, however, would wish to have the benefit of
      the proviso which, in fact, appropriately would apply only to a case where
      the appellant is maintaining the appeal and he is called upon to pay the
      full amount under Section 129E under the earlier avtar.
D
             11. We would think that the legislative intention would clearly be
      to not to allow the appellant to avail the benefit of the discretionary
      power available under the proviso to the substituted provision under
      Section 129E. When the appellant is not being called upon to pay the full
      amount but is only asked to pay the amount which is fixed under the
E     substituted provision, we do not find any merit in the contention of the
      appellant. However, in the interest of justice we extend the period for
      complying with Section 129E by a period of two months from today.
      Subject to the same, the appeal will stand dismissed.
              There will be no order as to costs.
F
              Pending application(s), if any, stands disposed of.


      Nidhi Jain                                                    Appeal dismissed.


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