ivil Appeal Nos
1219 20NM of 1987
From the Judgment and Order dated 173
1987 of the Customs Excise  Gold Control Appellate Tribunal New Delhi in Appeal No CDBOM 398  399 of 1984
MS Ganesh for the Appellants
The Judgment of the Court was delivered by SABYASACHI MUKHARJI J
These two appeals are under Section 130Eb of the hereinafter called the Act from the orders passed by the Customs Excise  Gold Control Appellate Tribunal hereinafter called the CEGAT
The questions involved in these two appeals are identical
The appellants  claim to be the citizens of India is not disputed
At the material time in 1983 they were based in Hong Kong and Singapore respectively
In February 1993 when the appellants came to India they were charged with alleged offences under Sections 112 and 114 of the Act and also simultaneously with the alleged offences under the Foreign Exchange Regulation Act 1973 hereinafter called the FERA The
Enforcement authorities recorded under Section 40 of the FERA the appellants  statements at the time of their arrest
It is alleged that these statements were obtained under duress and by using third degree methods against them who soon thereafter retracted their statements
No statements were however
recorded by the Customs authorities under the corresponding Section 108 of the Act
In the FERA proceedings
the Enforcement Directorate it is stated applied that there was no evidence against the appellant Vijay Prakash Mehta and the Directorate had no objection to his discharge
Accordingly by an order dated 29101985 of the Additional Chief Metropolitan Magistrate 8th Court Esplanade Bombay has was discharged and his bailbond was cancelled
So far as the appellant JD Mehta is concerned he had replied to the show cause notice issued by the Enforcement Directorate and the mater is pending adjudication
In the meantime the proceedings under Sections 111 to 114  118 of the Act resulted in the order dated 1911984 of the Addl
Collector of Customs Preventive Bombay whereby he imposed a penalty of Rs 300000 on each of the appellants
It may be mentioned that each of the appellants was alleged to have PG NO 437 been caught red handed with the foreign exchange to the tune of Rs 1190648
The appellants had admitted their part in the systematic illegal export of foreign exchange from India during the past several years
Against the said order dated 191
1984 the appellants preferred their respective appeals to the Appellate Tribunal under Section 129A of the Act
The Tribunal reduced the amount of penalty to be deposited in an application made under Section 129E of the Act
pending hearing of the appeal to Rs 1 lakh for each of the appellants
It is alleged that since neither of the appellants were in any financial position to deposit even Rs 1 lakh they sought further reduction
The Appellate Tribunal after considering the facts and circumstances of the case and taking into consideration all the relevant material facts and factors by its order dated 17th February 1987 declined to do so and dismissed the appeals for non compliance with the provisions of Section 129E of the Act
Aggrieved thereby the appellants have appealed to this Court
Section 129E of the Act provides as follows
Where in any appeal under this Chapter the decision or order appealed against relates to any duty demanded in respect 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 the appeal deposit with the proper officer the duty demanded or the penalty levied Provided that where in any particular case
the Collector Appeals or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person the Collector Appeals or as the 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
 The aforesaid Section provides a conditional right of appeal in respect of an appeal against the duty demanded or penalty levied
Although the Section does not expressly provide for rejection of the appeal for non deposit of duty or penalty yet it makes it obligatory on the appellant to deposit the duty or penalty pending the appeal failing which the Appellate Tribunal is fully competent to reject the appeal
See in this connection the observations of this Court in respect of Section 129 prior to substitution PG NO 438 of Chapter XV by the Finance Act 1980 in Navin Chandra Chhotelal vs Central Board of Excise  Customs  Ors  The proviso howevergives power to the Appellate Authority to dispense with such deposit unconditionally or subject to such conditions in cases of undue hardships
It is a matter of judicial discretion of the Appellate Authority
The case of the appellants was that they had not gone out of India and had no assets in India
Their passports were impounded at the time of arrest
Their visa had lapsed and could not be renewed
They had no money hence the right of appeal could be illusory unless they are permitted to deposit only Rs60000 each which they contend they are able to procure with the assistance of their father
In the impugned order the Tribunal noted the several abortive and defective attempts made to get extension of time to deposit the security
Firstly
the prayer was to accept the deposit of Rs35000 and secondly to accept the deposit of Rs60000 in 2 months
The Tribunal took into account the probability of the prima facie case of the appellants
The appeals were filed two years ago
After taking into consideration these factors the Tribunal rejected the prayer for reduction
It was contended that this was wrong Shri M section Ganesh
learned advocate for the petitioners
pleaded that in a situation of this type the condition for deposit of penalty was bad as it whittled down the appellants right of appeal
This in our opinion is incorrect Shri Ganesh tried to contend that the right of appeal is being whittled down by the procedure followed in this case He drew our attention to certain observations of this Court in Hoosein Kasam Dada India Ltd V The State of Madhya Pradesh  Ors  There this Court held that when the right to appeal vests change of law after initiation of proceedings in lower court would not divest the vested rights of the appellant
The right of appeal is a matter of substantive right and not merely a matter of procedure and this right becomes vested in a party when the proceedings are first initiated in and before a decision is given by the inferior court and such a right cannot be taken away except by express enactment or necessary intendment
The aforesaid observations in our opinion
have no application to the instant case
Here the right that was granted w as a right held with a condition
There was o question of change of that right
In the instant case the only substantive right is the right of appeal as contemplated under Sections 129A and 129E of the Act and that right is a conditional one and the Legislature in its wisdom has imposed that condition
No question of whittling PG NO 439 down that right by an alteration of procedure arises in this case
Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi judicial adjudications
The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant
Counsel referred us to the decision of this Court in Collector of Customs  Excise Cochin  Ors
vs AS Bava l968 1 SCR 82
There this Court found that Section 35 of the Central Excises  Salt Act 1944 Excises Act gave a right to appeal
Under Section 12 of the Act the Central Government was authorised to apply to appeals under the Excises Act the provisions of the dealing with the procedure relating to appeals
In exercise of that power the provisions of Section 129 of the Act were made applicable to appeals under the Excises Act
The Section required an appellant to deposit pending the appeal the duty or penalty imposed and empowered the Appellate Authority in his discretion to dispense with such deposit pending the appeal in any particular case
The respondent therein filed an appeal against the duty imposed on him under the Excises Act and prayed for dispensation of the deposit
The Collector who was the appellate authority rejected the prayer and when no deposit was made within the time fixed dismissed the appeal
The respondent filed a petition in the High Court which was allowed and the Collector was directed to hear the appeal on merits
This Court held that Section 35 of the Excises Act gave a right of appeal and Section 129 of the Act whittled down that substantive right and as such Section 129 could not be regarded as Procedure relating to appeals within Section 12 of the Excises Act
These observations cannot be applied to the facts of this case
Here we are concerned with the right given under Section 129 A of the Act as controlled by Section 129E of the Act and that right is with a condition and thus a conditional right
The petitioner in this case has no absolute right of stay
He could obtain stay of realisation of tax levied or penalty imposed in an appeal subject to the limitation of Section 129E
The proviso gives a discretion to the authority to dispense with the obligation to deposit in case of undue hardships
That discretion must be exercised on relevant materials honestly bona fide and objectively
Once that position is established it cannot be contended that there was any improper exercise of the jurisdiction by the Appellate Authority
In this case it is manifest that the order of the Tribunal was passed honestly PG NO 440 bona fide and having regard to the plea of undue hardship  as canvassed by the appellant
There was no error of jurisdiction or misdirection
Though in a different context the public policy involved in not granting interim stay has been explained by this Court in Asstt
Collector of Central Excise West Bengal vs Dunlop India Ltd It is not the law that adjudication by itself following the rules of natural justice would be violative of any right constitutional or statutory without any right of appeal as such
If the statute gives a right to appeal upon certain conditions it is upon fulfilment of those conditions that the right becomes vested and exercisable to the appellant
The proviso to Section l29E of the Act gives a discretion to the Tribunal in cases of undue hardships to condone the obligation to deposit or to reduce
It is a discretion vested in an obligation to act judicially and properly
In the facts and circumstances of the case and all the relevant factors namely the probability of the prima facie case of the appellants the conduct of the parties have been taken into consideration by the Tribunal
The purpose of the Section is to act in terrorem to make the people comply with the provisions of law
In that view of the matter we are unable to accept the submission that there was improper rejection and non consideration of material and relevant facts
If that is the position then the appeals have no merit and are accordingly rejected
PSS Appeals dismissed


Summary:
On November 29 1973 the Government of Maharashtra Notified a scheme approved under section 68 D of the authorising the Maharashtra State Road Transport Corporation to operate contract carriage services in the entire area of the State of Maharashtra to the complete exclusion of all other persons except those falling under the seven categories mentioned therein
The appellant who did not belong to any one of the seven categories applied to the Regional Transport Authority for a special permit under section 636 of the Act on the route Bombay to Shirdi for five days
This application was rejected because the appellant had not produced a No objection Certificate  from the State Road Transport Corporation
It was held by the Regional Transport Authority that in the absence of a No Objection Certificate  no special permit could be issued under section 636 of the Act
The Maharashtra State Transport Appellate Tribunal allowed the appellant s appeal holding that a special permit issued under section 636 of the Act was not a contract carriage permit issued under the Act and that the scheme did not have the effect of preventing any person from applying for a special permit under section 636 to operate a public service vehicle on any of the routes in the State
The Corporation filed a writ petition in the High Court against the Tribunal s order
The High Court allowed the Writ Petition
Disposing of the appeal and setting aside the judgment of the High Court it was HELD 1 A contract carriage permit and a special permit are not one and the same though the special permit has some of the features of a contract carriage permit
454E Fl 2 A Special permit is ordinarily taken to meet a need PG NO 448 PG NO 449 that exists for a few days like carrying a marriage party or persons going to a pilgrimage etc
454F 3 The distinguishing features of the two types of permits are 1 A permit for which an application is made under section 49 of the Act and which is granted under section 51 of the Act is called a contract carriage permit
A permit issued under section 636 of the Act is called a special permit 2 while a contract carriage permit issued by a Regional Transport Authority of any one region is not valid in any other region unless the permit has been countersigned by the Regional Transport Authority of the other region as provided under section 631 of the Act a special permit issued by one Regional Transport Authority under section 636 of the Act is valid in any other region or State without the countersignature of the Regional Transport Authority of the other region or the other State as the case may be 3 While the duration of a contract carriage permit is as prescribed under section 581 of the Act a Special permit can be issued only for a specific period which may be for a few days only in accordance with the rules prescribed for that purpose and 4 A contract carriage permit is renewable under section 582 of the Act but there is no corresponding provision providing for renewal of a special permit
454B E 4 The provision in the scheme which excludes operation of contract carriage services by persons other than those who are permitted to do so under the scheme refers to only those persons who wish to operate contract carriage services under permits issued under section 51 of the Act
The scheme does not in any way prevent the issuing of special permits under section 636 of the Act by the Regional Transport Authorities in accordance with law as it does any that holders of special permits under section 636 would also be excluded from running the public service vehicles
457B C 5 The scheme does not provide that the clause regarding exclusion of other persons from operating contract carriages would cease to operate if the Corporation issued a No Objection Certificate 
The insistence on the production of a No objection Certificate  from the Corporation by a person applying for a special permit under section 636 of the Act was wholly unwarranted
456H 457A B Mohd Basha and others vs The Secretary Regional Transport Authority and Anr  G Shaikh Shavalli Uravakonda  Ors
vs The Secretary Regional Transport Authority Anantapur and Anr AIR  SRMS Tourist Service Co Bangalore  Ors
PG NO 450 vs The Secretary Regional Transport Authority AIR 1975 Karnataka 166 KN Sreekantaiah vs Deputy Transport Commissioner Bangalore  Anr  Adarsh Travels Bus Service  Anr
vs State of Uttar Pradesh  Ors
 1985 Supp 3 SCR 661 referred to