The main legal point established in the judgment is the court's discretion to waive the requirement of pre-deposit for filing an appeal in exceptional circumstances, especially when the condition imposed is unduly onerous and renders the right of appeal illusory.

JUDGMENT :

TARA VITASTA GANJU, J.

Preface:

1. The present Petition has been filed by the Petitioners, inter-alia, challenging the constitutional vires of Section 129E of the Customs Act, 1962 [hereinafter referred to as “the Act”] and seeking a direction to Respondents to admit the Appeal filed by the Petitioners without pre-deposit of the mandatory duty as stipulated in Section 129E of the Act.

2. The Petitioners have submitted that they belong to poor families and live in Islam Nagar, Hojai, Assam, and are not well-educated youth. In support of their plea, the Petitioners No. 1 and 3 have filed an income certificate dated 13.12.2021 issued by the Office of the Circle Officer, Hojai, Assam, showing an annual income of Rs. 1,00,000/- (Rupees One Lakh). The Petitioners further stated that they are earning their livelihood through agriculture and by selling small quantities of Agarwood. The Petitioners have submitted in the Petition that the goods seized by the Customs Authorities were purchased by them, and the bills were attached to the Reply to the Show Cause Notice. The Petitioners have also stated that the goods seized were wrongly assessed at very high market value, and the penalty has been levied based on an incorrect assessment of the goods. The Petitioners have further submitted that their right of Appeal under Section 129E of the Act cannot be exercised as they are not financially sound and hence, unable to pay the mandatory pre-deposit as required to challenge this levy.

Background:

3. The undisputed facts for the purpose of this Petition are as follows:

4. The Petitioners were travelling from Assam to Delhi, and they intended to depart for Bangkok on 20.09.2019. They were carrying three handbags and five trolley bags. The screening of the bags carried by the Petitioners at IGI Airport revealed that the Petitioners were carrying Agarwood Chips and Agarwood Oil. Agarwood Chips weighing 120 Kgs, along with 4.5 Kgs of Agarwood Oil (approximately), recovered from the Petitioners, which were collectively valued at Rs. 6,36,00,000/- by the Customs Authorities.

5. Since the Petitioners failed to produce any valid document for the export of the said Agarwood Chips, the Petitioners' act of carrying Agarwood Chips and Agarwood Oil was held to be in contravention of the provisions of the Act read with the provisions of the Foreign Trade (Development & Regulation) Act, 1992, and the same were confiscated under Section 113 of the Act. Accordingly, a Show Cause Notice dated 16.03.2020 [hereinafter referred to as “the SCN”] issued under Section 124 of the Act, was served upon the Petitioners by the Office of the Commissioner of Customs, for the said confiscated Agarwood Chips and Agarwood Oil.

6. The Petitioners filed a common Reply to the SCN on 16.03.2020. Although the copy of the Reply to the SCN was not filed with the Petition, the Order-in-Original dated 13.07.2021 [hereinafter referred to as “the OIO”] reproduces the Reply. As per the OIO, the Petitioners were represented before the Respondent No. 1 and 2 through Counsel and were accorded a personal hearing on 01.03.2021 as well.

7. After hearing the contentions of all the parties, the Respondent No. 2 by its OIO held that the Petitioners do not possess valid documents for the export of the Agarwood Chips and Agarwood Oil and have thus contravened the provisions of the Act. The OIO held that the goods are liable for absolute confiscation and imposed a penalty on each of the Petitioners as under:

“(i) Absolute confiscation of the s