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2011 (2) TMI 127 - SC - FEMAWaiver of pre-deposit - quantum of pre-deposit - The appellant failed to discharge its export obligation under the licences - The Adjudicating Authority imposing a penalty - The appellant failed to make the pre-deposit of Rs. 5,00,000/- and consequently the appeals were dismissed - The Division Bench of the High Court passed the impugned order allowing the appellant to deposit a sum of Rs. 20,00,000/for each of the appeals - The Division Bench of the High Court should not have passed the impugned order for deposit of Rs. 20,00,000/- for each of the appeals when the Appellate Authority had directed the appellant to make pre-deposit for Rs. 5,00,000/- for both the appeals - Discretion is vested in the Appellate Authority to dispense with a pre-deposit of penalty either unconditionally or subject to such condition as the Appellate Authority may impose - If in exercise of such discretion, the Appellate Authority in the present case dispensed with the pre-deposit penalty of Rs. 1,30,00,000/- in each of the two appeals subject to the appellant depositing a sum of Rs. 5,00,000/- the Division Bench of the Delhi High Court ought not to have enhanced the amount of pre-deposit to Rs. 20,00,000/- for each of the two appeals - Set aside the impugned order of the Division Bench of the High Court of Delhi - Direct that in case the appellant deposits the sum of Rs. 5,00,000/- and the appeal will be heard on merits afresh by the Appellate Authority.
Issues:
- Appeal against penalty imposition under the Foreign Trade (Development and Regulation) Act, 1992. - Applicability of pre-deposit requirements for appeals. - Discretion of the Appellate Authority in dispensing with pre-deposit. - Review of the High Court's order on pre-deposit amount. Analysis: The case involved appeals against penalties imposed on the appellant for failing to meet export obligations under two Advance Licences issued for the import of brass dross/ash. The Adjudicating Authority had imposed a penalty of Rs. 1,30,00,000/- for each license under Section 11(2) of the Foreign Trade (Development and Regulation) Act, 1992. The appellant's appeals were dismissed for failure to make a pre-deposit of Rs. 5,00,000/- towards the penalties. The appellant then filed a Writ Petition in the High Court seeking to set aside the orders of the Appellate Authority and the Adjudicating Authority. The Single Judge dismissed the petition, leading to an appeal before the Division Bench. The Division Bench allowed the appellant to deposit Rs. 20,00,000/- in each appeal within 8 weeks, contrary to the Appellate Authority's direction of Rs. 5,00,000/- pre-deposit for both appeals. The Supreme Court analyzed the provisions of the Act regarding pre-deposit requirements for appeals against penalties. It noted that the Appellate Authority has the discretion to dispense with a pre-deposit of penalty, subject to conditions. In this case, the Appellate Authority had directed a pre-deposit of Rs. 5,00,000/- for both appeals, exercising its discretion. Therefore, the Division Bench of the High Court erred in enhancing the pre-deposit amount to Rs. 20,00,000/- for each appeal. The Supreme Court set aside the High Court's order and directed that if the appellant deposits Rs. 5,00,000/- as directed by the Appellate Authority within two months, the appellate orders will stand quashed, and the appeals will be heard on merits afresh. The Court emphasized the importance of following the Appellate Authority's directions regarding pre-deposit amounts in such cases. In conclusion, the Supreme Court allowed the appeals, providing clarity on the Appellate Authority's discretion in dispensing with pre-deposit requirements for penalty appeals under the Foreign Trade (Development and Regulation) Act, 1992.
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