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TMI Blog2010 (8) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... applications for dispensation of pre-deposit and directing the Appellants to make payment of full amount of penalty within 30 days from the date of receipt of the order and holding that on failure to make full payment the appeals will be dismissed on that ground. M/s. Fayshaw Apparels is the appellant in C.M.A. No. 2101 of 2010, M/s. Shaw Garments Pvt. Ltd. is the appellant in C.M.A. No. 2103 of 2010 and B.P. Byram Shaw, the Managing Partner/Managing Director of the said firm and Company is the Appellant in C.M.A. Nos. 2102 and 2104 of 2010. 2. The brief facts are that the Appellant firm/Company are exporters of garments covered by eight shipping bills through ICD, irugur, coimbatore and the same were exported through Tuticorin Port. The value of the outstanding export proceeds is Rs. 1,13,20,461/- in respect of M/s. Fayshaw Apparels and Rs. 87,92,412/- in respect of M/s. Shaw Garments Private Limited. In terms of Section 8 of Foreign Exchange Management Act (in short, FEMA ) the exporters are required to take all reasonable steps to realise and repatriate to India the amount of foreign exchange within prescribed period and manner as mentioned in the GR forms. According to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the applications for dispensation and directed the Appellants to make full payment of penalty within 30 days from the date of receipt of the order and observing that on failure to make payment the appeals would be dismissed on that ground alone. Being aggrieved with the order of the Appellate Tribunal rejecting dispensation applications, the appellants have come forward with these Appeals. 6. Learned Senior counsel for Appellants Mr. R. Muthukumaraswamy submitted that the penalty imposed will not stand to the test and while so, imposing condition of pre-deposit of penalty would cause undue hardship to the Appellants. It was further contended that for more than 14 years, the Appellants were exporting garments and are having clean record of exports and earned foreign exchange to the tune of more than Rs. 16 Crores and the past history of earning foreign exchange by the Appellants ought to have been taken into account by the Appellate Tribunal. It was further submitted that under the proviso to Section 19 of Foreign Exchange Management Act, discretion has to be exercised judicially and the insistence of pre-deposit of the penalty, which itself was a huge sum would deprive the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as it may deem fit to impose so as to safeguard the realisation of penalty. (2) .....(3) .....(4) .....(5) ....(6) ..... 9. The principle relating to grant of stay pending disposal of the matters before the forums concerned was discussed in several cases. It is to be noted that in such matters, where discretion is available to the authorities/Appellate Tribunal, discretion has to be exercised judicially. Referring to Union of india v. Adani exports ltd., 2007 AIR SCW 7134, the Appellate Tribunal has highlighted the relevant aspects while rejecting the prayer for dispensation of pre-deposit. In the said judgment, the Supreme Court observed as under : 9......The three aspects to be focussed while dealing with such applications are : (a) prima facie case, (b) balance of convenience, and (c) irreparable loss. The Tribunal categorically found that these factors were established by the respondents. Even when the Tribunal decides to grant full or partial stay it has to impose such conditions as may be necessary to safeguard the interest of revenue. This is an imperative requirement under Section 129-E of the Act. (Customs Act) ..... 10. The expression used in proviso to Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant would derive from compliance with it. 14. The word undue adds something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant. 15. The other aspect relates to imposition of condition to safeguard the interests of the Revenue. This is an aspect which the Tribunal has to bring into focus, it is for the Tribunal to impose such conditions as are deemed proper to safeguard the interests of the Revenue. Therefore, the Tribunal while dealing with the application has to consider materials to be placed by the assessee relating to undue hardship and also to stipulate conditions as required to safeguard the interests of the Revenue. 12. The questions falling for our consideration are, whether the Appellants have shown undue hardship while rejecting the application for dispensation of pre-deposit and whether the Appellate Tribunal has judicially exercised the discretion. It is true that merely establishing a prima facie case, interim order of dispensation of deposit should not be passed. Only where it appears that the penalty imposed has no legs to stand or it would be undesirable to ask the Appellant to pay the full or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be exercised judicially. 7. The applicable principles have been set out succinctly in Siliguri Municipality v. Amalendu Das (1984) 2 SCC 436, Samarias Trading Co. (P) Ltd. v. S. Samuel (1984) 4 SCC 666 and CCE v. Dunlop India Ltd. (1985) 1 SCC 260. 8. it is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no legs to stand on, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine matter unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. Merely because this court has indicated the principles that does not give a licence to the forum/authority to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest, where denial of interim relief may lead to public mischief, grave irreparable private injury or shake a citizen s faith in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the Appellants submitted that the Appellants have exported the garments based on the instructions of one K. Gunasekar of M/s. Field Line Trading LLC, Dubai, who was the agent of Overseas Buyers and the said Gunasekar was detained under COFEPOSA by Air Customs, Chennai and in 2007 the Appellants have intimated the Reserve Bank of India about the non-realisation of the export proceeds in respect of the said shipping bills and the Appellants were taking all efforts to realise the sale proceeds from the said Gunasekar, agent for the buyer and these aspects were not taken note of by the Appellate Tribunal, it was further submitted that appellants are not having huge turnover but only having medium level of business and to direct the appellants to pay Rs. 1,10,00,000/- would cause undue hardship, which aspect was not kept in view by the appellate Tribunal. 17. The question whether the Appellants have taken reasonable steps for realisation of export proceeds and whether detention of the said Gunasekar under COFEPOSA has any relevance for realisation of export proceeds are the matters to be considered by the Appellate Tribunal while hearing up the Appeals. Likewise, the question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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