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Issues involved: Challenge to order dismissing writ petition for waiver of pre-deposit u/s Article 226 of the Constitution.
Summary: The appellant was issued a show cause notice u/s 8(3) and 8(4) of FERA, 1973 for under-valuation of imported marble. The Special Director imposed a penalty of Rs. 20,00,000 u/s 50 of FERA, 1973. The Appellate Tribunal dismissed the appellant's application for dispensation of pre-deposit, leading to the dismissal of the appeal if the penalty was not paid within 30 days. The appellant's writ petition against the Tribunal's order was also dismissed by the Single Judge. The appellant contended that Sections 8(3) and 8(4) of FERA, 1973 were inapplicable to the case, while the respondent argued that the penalty was imposed due to under-invoicing. The High Court, considering the case u/s 19 of FEMA, observed that undue hardship and safeguarding penalty realization are crucial. It noted that undue hardship must be disproportionate to the requirement and benefit derived. The Court found no independent finding of under-valuation and doubted the applicability of Sections 8(3) and 8(4) as goods were imported with RBI permission. Due to doubts on the adjudicating order's sustainability and the appellant's financial hardship, the Court granted waiver of pre-deposit, allowing the appeal.
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