The High Court of Karnataka has declined to interfere with the statutory requirement of pre-deposit under the Customs Act, 1962, dismissing a writ petition filed by Parisons Foods Private Limited. The company had sought exemption from depositing a portion of the disputed customs duty before its appeal could be heard by the appellate tribunal.
The ruling, delivered by Justice M. Nagaprasanna, reinforces the mandatory nature of pre-deposit under Section 129E of the Customs Act and draws a clear line between financial hardship claims of small litigants and large commercial entities.
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Background of the Case
Parisons Foods Private Limited, a Kerala-based company engaged in refining edible oils, regularly imports crude palm oil from Indonesia and Malaysia under the India-ASEAN trade agreement. For years, it availed exemptions from basic customs duty under a central government notification while paying the applicable cess.
When Indonesia imposed a ban on crude palm oil exports in mid-2022, the company switched to importing crude palmolein, claiming it to be a by-product of crude palm oil and eligible for the same duty benefits. Between June 2022 and January 2023, seven consignments were imported through the Mangaluru port.
Customs authorities, however, took a different view. After searches and investigations by the Directorate of Revenue Intelligence, a show cause notice was issued in January 2024, alleging wrongful exemption. The adjudicating authority later confirmed a differential duty demand of over ₹416 crore, along with interest and penalty.
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Challenging the order, Parisons Foods filed an appeal before the Customs Excise and Service Tax Appellate Tribunal (CESTAT). Under Section 129E of the Customs Act, an appellant must deposit 7.5% of the disputed amount-subject to a ₹10 crore cap-before the appeal can be entertained.
Instead of making this deposit, the company moved the High Court, arguing that:
- The demand itself was legally flawed.
- Mandatory pre-deposit made the appellate remedy “illusory”.
- The requirement violated its rights under Articles 19(1)(g) and 21 of the Constitution.
“The pre-deposit requirement, if enforced, would jeopardise the very functioning of the business,” the company contended.
Court’s Observations
The court was not persuaded. Justice Nagaprasanna noted that Parliament had consciously amended the law in 2014 to remove discretion in pre-deposit matters.
“The statute uses the words ‘shall not entertain any appeal’ unless the deposit is made,” the bench observed, underlining that courts cannot dilute a clear legislative mandate.
The judgment also drew a sharp distinction between small or impoverished litigants and established corporate entities. The court remarked that Parisons Foods, incorporated in 1997 and handling imports worth hundreds of crores, could not equate itself with daily wage earners or financially fragile appellants who had earlier received limited relief from courts.
“What may appear onerous to one may be insignificant to another,” the judge said, adding that uniform statutory discipline cannot be relaxed based on subjective claims of inconvenience.
Parisons Foods argued that crude palmolein was essentially the same as crude palm oil and should enjoy the same exemption. The court declined to examine this claim at the writ stage.
“This Court would be loathe to don the mantle of scientific expertise,” the bench said, clarifying that such technical questions must be addressed by statutory authorities during the appellate process.
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Final Decision
Finding no exceptional circumstances warranting interference, the High Court dismissed the writ petition. As a result, Parisons Foods must comply with the mandatory pre-deposit requirement if it wishes to pursue its appeal before CESTAT.
The ruling reiterates that waiver of pre-deposit is an extraordinary remedy, reserved for rare cases, and not available merely because a large commercial entity finds the statutory condition inconvenient.
Case Title: Parisons Foods Private Limited v. Commissioner of Customs & Anr.
Case No.: Writ Petition No. 13082 of 2025 (T-CUS)
Case Type: Customs – Pre-Deposit Dispute
Decision Date: 7 November 2025
