R.R. Overseas Vs Commissioner of Customs (Madras High Court)
The case of R.R. Overseas Vs Commissioner of Customs before the Madras High Court centered on the mandatory pre-deposit requirement for filing an appeal under Section 129E of the Customs Act, 1962, specifically addressing whether a frozen bank account constitutes an equitable ground for waiving or reducing this deposit.
Background and Original Dispute
The petitioner, R.R. Overseas , was an exporter who had availed a duty drawback amounting to 13,95,626 on 55 shipping bills between 2005 and 2013, under Section 75(1) of the Customs Act and Rule 3 of the Customs Central Excise Duties and Service Tax Drawback Rules, 1995.
Customs authorities initiated proceedings against the petitioner, alleging non-submission of proof of export realization. This led to a show-cause notice demanding the recovery of the entire drawback amount. The second respondent (Adjudicating Authority), through an order dated November 30, 2023, concluded that the export proceeds had not been realized, confirming the demand for the drawback amount plus interest.
The Appeal and Pre-Deposit Issue
Aggrieved by this order, the petitioner filed an appeal before the third respondent (Appellate Authority). Crucially, the petitioner also sought a waiver of the mandatory pre-deposit required under Section 129E of the Customs Act. The petitioner’s primary argument for the waiver was that their bank account had been frozen by the department since April 2, 2025, effectively excluding them from accessing their funds. They further contended that the frozen balance of 6,73,811 was substantially higher than the statutory 7.5% pre-deposit amount, which was calculated as 1,04,672.
