2015 (2) TMI 217 - HC - FEMA

Waiver of pre deposit - Appeal dismissed for want of satisfying the predeposit requirement - Held that - though as per subsection( 1) of section 15, an appeal against an order of penalty or redemption charges should ordinarily be accompanied by payment of such amounts, it is within the power of the appellate authority to waive fully or in part such requirement either unconditionally or subject to conditions if it is found that such deposit would cause undue hardship to the appellant. - Under the circumstances, when the petitioner had made such an application making specific request for waiver of predeposit requirement, the appeal could not have been dismissed on the ground that the appellant did not fulfill such predeposit requirement. It was expected in law of the appellate authority to first decide such an application even if the application was rejected by the appellate authority refusing to waive predeposit requirement or same was waived on some condition, the appellate authority had to give reasonable time to the appellant to either make full predeposit or to fulfill the condition that may have been imposed in such order. In any case, dismissal of the appeal for want of predeposit without disposing of the petitioner s application for waiver thereof was simply not permissible. - Impugned order stands quashed - Decided in favour of appellants.

Summary

Issues involved:
1. Challenge to appellate order for dismissal based on non-fulfillment of predeposit requirement under section 15 of the Foreign Trade (Development and Regulation) Act, 1992.
2. Interpretation of section 15 regarding the authority to waive predeposit requirement in cases of undue hardship to the appellant.
3. Failure of the appellate authority to decide on the application for waiver of predeposit before dismissing the appeal.

Detailed Analysis:
Issue 1:
The petitioner challenged the appellate order dated 6.1.2014, which dismissed the appeal for not fulfilling the predeposit requirement under section 15 of the Foreign Trade (Development and Regulation) Act, 1992. The order stated that the appellant did not submit proof of depositing the penalty amount along with the appeal, as mandated by the Act. The petitioner argued that while section 15 required predeposit of penalty, it also allowed the appellate authority to waive this requirement in appropriate cases. The petitioner had filed a separate application for stay/waiver of predeposit, which was never decided, leading to the dismissal of the appeal solely on the grounds of non-fulfillment of the predeposit requirement.

Issue 2:
Section 15 of the Foreign Trade (Development and Regulation) Act, 1992 pertains to appeals against decisions or orders made by the adjudicating authority. The Act specifies that in cases of appeals against decisions imposing penalties or redemption charges, the appellant must deposit the required amounts. However, a proviso in the Act allows the appellate authority to dispense with the deposit if it would cause undue hardship to the appellant. The appellate authority has the discretion to waive the predeposit requirement either unconditionally or subject to conditions if it deems the deposit would cause undue hardship to the appellant.

Issue 3:
The court observed that the appellate authority failed to decide on the petitioner's application for waiver of predeposit before dismissing the appeal. The court emphasized that even if the application for waiver was rejected, the appellate authority should have given the appellant a reasonable time to either make the full predeposit or fulfill any conditions imposed. Dismissing the appeal solely for non-fulfillment of the predeposit requirement without addressing the petitioner's application for waiver was deemed impermissible. Consequently, the court quashed the impugned order dated 6.1.2014 and directed the appellate authority to first decide on the petitioner's application for waiver of predeposit before proceeding further in accordance with the law and the court's observations.

In conclusion, the judgment highlighted the importance of considering applications for waiver of predeposit in cases of undue hardship before dismissing appeals solely based on non-fulfillment of the predeposit requirement. The court's decision emphasized the need for procedural fairness and adherence to the statutory provisions governing appeals under the Foreign Trade (Development and Regulation) Act, 1992.