The Central Board of Excise and Customs (the Board) vide Circular No.993/17/2014-CX dated January 5, 2015 has issued a clarification on the matter of mandatory pre-deposit of duty and penalty for filing an appeal as was specified in Circular No. 984/08/2014-CX dated September 16, 2014.

The Board has received several representations stating that some Commissioners (Appeals) have been insisting on pre-deposit in cases of demand of erroneous drawback granted. In this regard, the Board has clarified that Drawback, like rebate in the Central Excise, is refund of duty suffered on the export goods. Section 129E of the Customs Act, 1962 (the Customs Act) stipulates that the Appellant filing an appeal before the Commissioner (Appeals) shall pay 7.5% of the duty demanded where duty and penalty are in dispute. Accordingly, it is clarified that mandatory pre-deposit would be payable in cases of demand of drawback as the new Section 129E of the Customs Act would apply to such cases.

The Board has further clarified that mandatory pre-deposit under Section 129E of the Customs Act in the legislation does not extend to an appeal under Section 129DD of the Customs Act before Joint Secretary (Revision Application) [JS (RA)].

Therefore, effective from August 6, 2014, mandatory pre-deposit would be required to be paid in cases of drawback, rebate and baggage at the first stage appeal before the Commissioner (Appeals). However, no pre-deposit would be payable in such cases while filing an appeal before the JS (RA).

(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email:

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