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2001 (11) TMI 331 - HC - Central Excise
Issues: Challenge to recovery notice for penalty under Foreign Exchange Regulation Act, 1973 pending appeal before Appellate Board.
Analysis: 1. The petitioner challenged a recovery notice for a penalty of Rs. 35,000 imposed by the Deputy Director of Enforcement under the Foreign Exchange Regulation Act, 1973. The petitioner sought quashing of the notice and direction to forbear from further recovery proceedings until the appeal pending before the Foreign Exchange Regulation Appellate Board is disposed of. 2. The Deputy Director imposed the penalty for contravention of specific sections of the Act. The petitioner filed an appeal before the Appellate Board and also applied to dispense with the penalty payment pending appeal. The petitioner contended that without a decision on the dispensation application and with the appeal pending, the recovery notice was invalid. 3. The court rejected the petitioner's claim, noting that while the petitioner had availed the statutory remedy of appeal and filed for dispensation, the Appellate Board had not yet decided on the dispensation request. The court highlighted that the mere filing of an appeal does not automatically dispense with the penalty payment requirement. 4. The Additional Central Government Standing Counsel argued that the authority could recover the penalty amount despite the pending dispensation request. Referring to a previous judgment, it was emphasized that unless there is a specific order dispensing with the penalty deposit, the contravention remains valid after a certain period from the adjudication order. 5. The court concurred with the previous judgment's view, emphasizing the necessity of a specific order from the Appellate Board to dispense with the penalty deposit. It also cited a Division Bench decision supporting the requirement for a formal order on dispensation. Consequently, the court found no merit in the writ petition and dismissed it along with the related application, without imposing any costs.
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