2015 (1) TMI 1170 - HC - FEMA

Foreign exchange allocated against the license having not been utilized - Waiver of pre deposit - Imposition of penalty - Held that - Under the statutory scheme the appellants are under an obligation to file appeal simultaneously along with penalty amount unless and until dispensation is granted under Second proviso to Section 52 (2) on the application of the appellants after getting satisfied about the prima facie good case and undue hardship of the appellants. In the instant case, the appellate has not taken care to comply the judicial order despite sufficient indulgence shown by this Tribunal by granting 50% dispensation in favour of the appellant which shows lack of bonafide on the part of the appellant. The order was passed long back on 12.02.04 where the appellant has shown total defiance towards judicial order where equity does not lie in his favour. Looking towards this situation this appeal is liable to be dismissed. Written submissions stated to be filed by the Petitioner on 15th September, 2009 are not on record of the Tribunal. However, in view of the endorsement even if it is accepted that the written submissions in para-7 submitted that without prejudice to the submissions the Petitioner herein prayed for time of two months to comply with the order dated 12th February, 2004, the same would not enure to the benefit of the Petitioner in as much as this alternate submission of depositing the amount was not taken when the application for withdrawal of the direction of pre-deposit was being considered. - Decided against Assessee.

Summary

Issues:
1. Dismissal of review petition against the order imposing a penalty under FERA.
2. Distinction between procedural review and review on merits.
3. Compliance with pre-deposit order for filing an appeal.

Issue 1: Dismissal of review petition against penalty order
The petitioner imported Tin Plates utilizing allocated foreign exchange, cleared goods from Customs, and faced allegations of non-utilization of allocated foreign exchange. The Adjudicating Authority imposed a penalty of Rs. 28,26,000 on the petitioner. The petitioner filed an appeal seeking waiver of the pre-deposit of the penalty amount. Despite delays and dismissal due to non-representation, the review petition was ultimately dismissed on 11th November, 2009 by majority order under Section 52(6) of FERA.

Issue 2: Distinction between procedural review and review on merits
The petitioner argued for a distinction between procedural review and review on merits, citing the decision in Minas Minerais De Goa Pvt. Ltd. vs. Union of India. The Tribunal, in an earlier order, considered the appeal and application for withdrawal of the pre-deposit order on merits even in the absence of the petitioner's counsel. The Tribunal rejected the review application due to the petitioner's failure to establish grounds for review, emphasizing the statutory obligation to file an appeal along with the penalty amount unless dispensation is granted.

Issue 3: Compliance with pre-deposit order for filing an appeal
The Tribunal highlighted the importance of complying with the pre-deposit order for filing an appeal under FERA. The petitioner's failure to comply with the pre-deposit order, despite indulgence shown by the Tribunal, led to the dismissal of the appeal. The Tribunal emphasized the lack of bonafide on the petitioner's part and dismissed the appeal accordingly. The petitioner's alternate submission for depositing the amount at a later stage was not considered as it was not raised during the relevant proceedings.

In conclusion, the High Court dismissed the petition, emphasizing the statutory obligations under FERA and the lack of merit in the petitioner's arguments. The judgment highlighted the importance of compliance with procedural requirements and the distinction between procedural review and review on merits in such cases.