THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO ALLOW THE WRIT APPEAL AND SET ASIDE THE ORDER DATED 07/11/2025 PASSED BY THE LEARNED SINGLE JUDGE IN WP No.13082/2025 DISMISSING THE WRIT PETITION.

THIS APPEAL, COMING ON FOR PRELIMINARY HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE S.G.PANDIT

and

HON'BLE MR. JUSTICE K. V. ARAVIND

ORAL JUDGMENT

(PER: HON'BLE MR. JUSTICE K. V. ARAVIND)

Heard Sri Prabhuling Navadgi, learned Senior Counsel for Smt. Sanjeevini Prabhuling Navadgi, learned counsel for the appellant-Assessee and Sri Aravind V. Chavan, learned Senior Standing Counsel for the respondents-Revenue.

2. The writ petitioner has preferred this intra-Court appeal under Section 4 of the High Court Act, assailing the judgment dated 07.11.2025 passed in W.P. No. 13082/2025.

3. The brief facts, as pleaded, are that the appellant is engaged in the business of refining edible oils. Respondent No.1, by order dated 27.01.2025, determined the customs duty, interest and penalty under various provisions of the

Customs Act, 1962 (for short, “the Act”). Aggrieved by the said order, the appellant preferred statutory appeal before the Customs, Excise and Service Tax Appellate Tribunal, Bengaluru (for short, “the CESTAT”). Section 129E(ii) of the Act mandates a pre-deposit of 7.5% of the duty demanded or the duty and penalty in dispute, subject to a maximum of rupees ten Crore.

3.1 The appellant raised various contentions questioning the correctness of the determination of liability and sought a direction to the CESTAT not to insist upon the statutory pre deposit for entertaining and deciding the appeal. The learned Single Judge rejected the said prayer.

4. Sri Prabhuling Navadgi, learned Senior Counsel appearing for Smt. Sanjeevini Prabhuling Navadgi, learned counsel for the appellant–assessee, submits that the demand has been determined on an erroneous interpretation of the exemption notification granting exemption from customs duty.

4.1 It is further submitted that the appellant’s business has suffered adverse market conditions and, on account of a substantial downturn, the appellant is presently facing financial

constraints. In the aforesaid circumstances, it is contended that the requirement of pre-deposit of 7.5% of the duty demanded, subject to a ceiling of rupees ten Crore, deserves to be waived and that CESTAT be directed to adjudicate the appeal on merits without insisting upon such pre-deposit.

4.2 It is also urged that, if the CESTAT is permitted to consider the appeal on merits, the appellant has a prima facie case to demonstrate that the entire transaction is exempt from customs duty, thereby nullifying the demand raised against it.

4.3 Without prejudice to the aforesaid contentions, the learned Senior Counsel submits that, having regard to the prevailing market conditions affecting the product in which the appellant is engaged and the present financial constraints faced by the appellant, this Court may grant reasonable installments for making the requisite pre-deposit, so as to enable the appellant to pursue the statutory appeal before CESTAT.

5. Per contra, Sri Aravind V. Chavan, learned Senior Standing Counsel appearing for the respondents, submits that the pre-deposit contemplated under Section 129E of the Act, as

a condition precedent for entertaining an appeal before CESTAT, is mandatory in nature. It is contended that the Tribunal is not vested with any discretion to waive or relax the said requirement.

5.1 It is further submitted that, prior to the amendment, the requirement was to deposit the entire amount of duty demanded. Having regard to the hardship likely to be caused to assessees, the legislature has reduced the pre-deposit to 7.5% of the disputed duty or penalty, subject to a ceiling of rupees Ten Crore.

5.2 It is pointed out that the total demand raised against the appellant exceeds Rs.425.00 Crore. In such circumstances, it is contended that an assessee ha