Isabella Mariam

The High Court of Karnataka Single Bench of Justice M. Nagaprasanna has held that the mandatory pre-deposit for filing a customs appeal cannot be waived for a financially sound importer and dismissed a writ petition seeking admission of an appeal without the deposit. In an order pronounced on November 7, 2025, the court declined to direct the customs appellate tribunal to entertain the appeal without compliance with Section 129-E of the Customs Act. The dispute stemmed from a customs demand for differential basic duty after authorities questioned the importer’s claim to exemption on crude palmolein imports. The court said the pre-deposit does not bar access to justice and applies uniformly as a statutory discipline for appellants.

The writ petition was instituted by a private company engaged in the business of refining edible oils and importing crude palm oil and crude palmolein from ASEAN countries. The dispute arose after the revenue authorities denied exemption from basic customs duty on imports of crude palmolein, holding that the relevant exemption notification applied only to crude palm oil. Following investigations and adjudication, a substantial differential customs duty along with interest and penalty was demanded through an order-in-original.

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Aggrieved by the adjudication order, the petitioner preferred an appeal before the Customs, Excise and Service Tax Appellate Tribunal. As a condition for entertaining the appeal, the statute required deposit of a prescribed percentage of the disputed duty, subject to a monetary cap. The petitioner approached the High Court seeking a direction to the appellate tribunal not to insist on the statutory pre-deposit and to admit the appeal without compliance with that requirement.

The petitioner contended that the insistence on pre-deposit rendered the appellate remedy illusory, caused financial hardship, and infringed constitutional guarantees. The revenue authorities opposed the petition, maintaining that the pre-deposit was mandatory, that the appellate tribunal had no discretion to waive it, and that the petitioner, being an established importer, could not claim exceptional hardship.

The Court examined the statutory framework governing pre-deposit and noted that “the issue that has driven the petitioner to this Court is, the claim of waiver of the mandatory pre-deposit for entertainment of an appeal under Section 129-E of the Act.” It recorded that the facts leading to the demand and the filing of the appeal were not in dispute.

While analysing the statutory provision, the Court observed that “Section 129-E mandates deposit of certain percentage of duty demanded or penalty imposed before filing an appeal” and that “the Tribunal or the Commissioner of Appeals shall not entertain the appeal … unless the appellant has deposited 7.5% of the duty.” The Court noted that the legislature had consciously removed discretion to waive the deposit while simultaneously reducing the quantum and imposing a monetary cap.

Referring to precedent, the Court stated that “the right of appeal is a creature of statute” and that conditions attached to such right could not be characterised as unreasonable merely because they imposed a financial obligation. It further recorded that “allowing such waiver would be contrary to the mandate of the legislation” and that writ jurisdiction could not be exercised to dilute an express statutory requirement except in rare circumstances.

On the plea of financial hardship, the Court recorded that “the petitioner, by no stretch of imagination, can be portrayed to be a fly-by-night operator” and that it was “an established businessman, an importer of repute, whose commercial presence in the field did not emerge overnight.” It observed that equating such an entity with cases involving daily wage earners would be “wholly incongruous and misplaced.”

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Addressing the constitutional challenge, the Court observed that “the legislative mandate cannot be diluted to suit the convenience or inconvenience of a few” and that the statutory pre-deposit “represents a statutory discipline that applies to all the appellants.” On the classification dispute relating to crude palmolein, the Court stated that “this Court would be loathe to don the mantle of scientific expertise or engage in chemical taxonomy.”

The Court held that: “Accordingly, this Court declines to entertain such technical contentions and leaves them for the appropriate authorities to consider, in accordance with law, as it is trite that this Court would not sit in the armchair of experts and decide the issue of the kind that is brought before the Court. Finding no merit in the petition, the inescapable conclusion is its dismissal. It is accordingly, dismissed.”

Advocates Representing the Parties

For the Petitioners: Sri Prabhuling K. Navadgi, Senior Advocate, with Sri Paramesh Kumar H.K., Advocate
For the Respondents: Sri Aravind V. Chavan, Advocate

Case Title: M/s Parisons Foods Private Limited v. Commissioner of Customs & Another

Case Number: Writ Petition No. 13082 of 2025

Bench: Justice M. Nagaprasanna