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Issues:
Challenging common order for pre-deposit of penalties by Appellate Tribunal for Foreign Exchange. Detailed Analysis: 1. The petitioners challenged the common order dated 3-11-2003 and subsequent order dated 10-3-2004 passed by the Appellate Tribunal for Foreign Exchange, New Delhi. The orders required the petitioners to make a pre-deposit of 40% of the penalties imposed on them. 2. Varsha Polychem and Prime Polychem had made foreign exchange remittances through State Bank of Saurashtra, Mumbai. The authorities issued show cause notices for not submitting original exchange control copies of bills of entries to prove the import of goods against the remittances. Penalties were imposed on both petitioners for non-compliance. 3. The petitioners filed appeals challenging the penalties. The Appellate Tribunal ordered a pre-deposit of 40% of the penalty amounts. The petitioners then applied for modification of the order, stating they had produced necessary documents to support their case. The Tribunal rejected the application, stating it was not maintainable. 4. The petitioners moved the High Court under Article 226 of the Constitution. The petitioners argued that they needed time to obtain evidence to prove the import of goods against the remittances. The Tribunal should have allowed the production of documents for consideration in modifying the pre-deposit order. 5. The Central Government's counsel argued that the petitioners were given enough time to produce the required documents but failed to do so. The Tribunal's order for a 40% pre-deposit was justified, and no further leniency was warranted. 6. The High Court held that the penalties were imposed solely for non-production of import evidence after a significant delay in issuing show cause notices. The Tribunal should have allowed the petitioners to produce the necessary evidence and reconsider the stay applications. 7. Consequently, the High Court allowed the petitions, quashed the impugned orders, and directed the Appellate Tribunal to permit the petitioners to produce documents supporting the import of goods against the remittances. The Tribunal was instructed to re-hear the stay applications based on the new evidence. 8. Each petitioner was ordered to pay a sum of Rs. 2500/- as costs for not producing the import documents at the first hearing of the stay applications. The rule was made absolute accordingly.
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