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2008 (8) TMI 9 - SC - CustomsFERA waiver of pre-deposit - Tribunal passed an order directing deposit of 60% of the penalty amount assessee s appeal filed against tribunal s order was dismissed by HC holding that no case for hardship was made - Undisputedly the appellant had deposited the amount (which was directed to be deposited) with concerned Directorate - for the balance amount demanded, appellant shall furnish security as may be stipulated by the Tribunal - appeal shall be heard without requiring further deposit
Issues involved:
Challenge to order under Section 35 of Foreign Exchange Management Act, 1999. Analysis: The appellant challenged the order passed by the Division Bench of the Calcutta High Court under Section 35 of the Foreign Exchange Management Act, 1999. The Enforcement Directorate issued a memorandum indicating that the appellant had acquired foreign exchange contravening the provisions of the Foreign Exchange Regulation Act, 1973. The Special Director imposed a penalty of Rs.25 lakhs on the appellant, who then appealed to the Tribunal. The Tribunal directed the deposit of 60% of the penalty amount for the appeal to be entertained. The High Court dismissed the appeal, stating no case for hardship was made out. The appellant argued for dispensing with pre-deposit, citing compliance with the interim order by depositing Rs.10,00,000. The respondents contended that no case for dispensing with pre-deposit was made out. The principles regarding grant of stay pending disposal of matters before forums were discussed, emphasizing the need for judicial exercise of discretion. The Supreme Court referred to various cases to highlight the importance of analyzing the factual scenario in each case. Section 19 of the Act was examined, focusing on the twin requirements of considering undue hardship and imposing conditions to safeguard penalty realization. The Court emphasized that undue hardship must be established by the applicant and is related to economic hardship disproportionate to the circumstances. The Tribunal was tasked with considering undue hardship and imposing suitable conditions to safeguard penalty realization. The Court highlighted the need for a detailed examination of rival stands and material on record. The appellant had deposited the directed amount but was required to furnish security for the balance amount demanded to safeguard penalty realization. Once this was done, the appeal would be heard without further deposit if defect-free. The appeal was disposed of accordingly, with the judgment delivered by Dr. Arijit Pasayat and Dr. Mukundakam Sharma.
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