2015 (8) TMI 144 - HC - Customs

Restoration of appeal - dismissal of appeal for non compliance with pre deposit order - Cancellation of EPCG authorisation - Imposition of penalty under section 9(4) and 11(2) - Held that - during personal hearing, the appellant-petitioner s representative has not informed the Appellate Authority about the correct factual position. The files may have been despatched from Delhi to Mumbai and surely the records must be containing a proof or a document such as the acknowledgement copy, which is at page 82. In the face of the stay application, the petitioner could not have been visited with the extreme consequences of a dismissal of the appeal without adjudication on merits. That could have been done provided any conditional order was made on the stay application. The stay application having not been taken up but kept as it is, the dismissal of the appeal has caused serious prejudice and we agree with the petitioner s counsel to that extent - petitioner to deposit a sum of ₹ 2 lakhs in the office of the Additional Director General of Foreign Trade and the amount should be deposited within a period of four weeks - Decided conditionally in favour of assessee.

Summary

Issues:
Challenge to order dismissing appeal for non-payment of penal amount under Foreign Trade Act, 1992; Error by Appellate Authority in dismissing appeal without considering waiver application; Failure to inform Appellate Authority about stay application; Blame on petitioner for not bringing correct facts to notice; Decision to restore stay application and direct deposit of sum for quashing previous order.

Analysis:
The petition challenged an order dismissing the appeal due to non-payment of penal amount under section 25(1)(b) of the Foreign Trade (Development & Regulation) Act, 1992. The petitioner had obtained an EPCG authorisation enabling duty savings, which was later cancelled with a penalty imposed. The Appellate Authority dismissed the appeal for non-compliance with the deposit requirement, overlooking the petitioner's right to seek a waiver of predeposit condition. The petitioner had filed a stay application seeking waiver, which was acknowledged by the Department.

During the hearing, the petitioner's representative failed to inform the Appellate Authority about the stay application, leading to the dismissal of the appeal without proper adjudication. The Court agreed that the dismissal caused prejudice due to the failure to consider the stay application. However, the petitioner was blamed for not bringing the correct facts to the Authority's notice and not seeking any order on the stay application.

To address the situation, the Court decided to restore the stay application and directed the petitioner to deposit a sum of Rs. 2 lakhs within four weeks. If the amount was deposited with proof, the previous order would be quashed, and the appeal would be decided on merits without influence from the earlier order. The decision aimed to balance the rights and equities of both parties, ensuring justice and fair proceedings without any cost implications.