2008 (5) TMI 761 - AT - FEMA

Summary

Issues:
- Appeal against adjudication order imposing penalties under FER Act
- Application for dispensation of pre-deposit of penalty
- Application for modification of pre-deposit order
- Legal arguments for modification and dismissal of appeal based on pre-deposit non-compliance
- Interpretation of Section 52(2) FER Act regarding pre-deposit requirements

Analysis:
The judgment pertains to an appeal against an adjudication order imposing penalties under the Foreign Exchange Regulation Act (FER Act). The appellant was penalized for contraventions related to acquiring and selling US dollars and UAE Dhiram without proper authorization. The appellant filed an application for dispensation of pre-deposit of the penalty, citing undue hardship. The Tribunal granted a 75% dispensation but directed the appellant to make a 25% pre-deposit within a specified timeframe, failing which the appeal would be dismissed solely on this ground.

Subsequently, the appellant sought modification of the pre-deposit order, contending that he lacked the financial capacity to comply. The appellant's counsel argued for dispensation of pre-deposit, but the Tribunal highlighted the legal grounds for review and modification, emphasizing the need for error apparent on the face of the record or new evidence. The Tribunal clarified that the pre-deposit order was not interim but a proper order for appeal admission under Section 52(2) of the FER Act.

On the other hand, the respondent's counsel argued for dismissal of the appeal due to non-compliance with the pre-deposit order. The respondent referred to Section 52(5) of the FER Act, which outlines the appeal process and pre-deposit requirements. The Tribunal emphasized the plain language of the statute and cited a Supreme Court judgment to support its interpretation. The appellant's failure to make the pre-deposit within the specified timeframe led the Tribunal to agree with the respondent's arguments and dismiss the appeal.

In conclusion, the Tribunal dismissed the appeal as the appellant failed to make the required pre-deposit of the penalty in compliance with the Tribunal's order. The judgment underscores the importance of adherence to legal procedures and statutory requirements in appeals involving financial penalties under the FER Act.