2009 (7) TMI 1397 - AT - FEMA

Appeals Dismissed Over Non-Compliance with Pre-Deposit Rule in Foreign Exchange Penalty Case.

Eupharma Laboratories Ltd. Versus Director, Enforcement Directorate

The Appellate Tribunal for Foreign Exchange, New Delhi, dismissed the appeals against the Adjudication Order imposing penalties under the Foreign Exchange ... - Issues:- Appeal against Adjudication Order imposing penalty for contravention of Foreign Exchange Regulation Act, 1973- Failure to make pre-deposit of penalty leading to dismissal of appealsAnalysis:The Appellate Tribunal for Foreign Exchange, New Delhi, delivered a judgment regarding appeals filed against an Adjudication Order imposing penalties under the Foreign Exchange Regulation Act, 1973. The penalties were imposed due to contravention of provisions related to the repatriation of export proceeds. The appellants failed to take reasonable steps for repatriation after exporting goods, leading to the penalties. The appeals were accompanied by applications for dispensation of pre-deposit, which were decided by the Tribunal. Despite multiple notices and opportunities, the appellants did not appear for hearings. The Tribunal allowed a dispensation of 40% of the penalty amount but directed the appellants to make a pre-deposit of the remaining 60% within 30 days, failing which the appeals would be dismissed solely on this ground.The Enforcement Directorate, represented by Shri A.C. Singh, argued for the dismissal of the appeals based on the provisions of Section 52(2) of the Foreign Exchange Regulation Act, 1973. This section mandates the pre-deposit of penalties while filing appeals, unless the Tribunal dispenses with it due to undue hardship. The grounds for undue hardship, as per legal precedents, include an ex-facie bad order or financial disability. The Tribunal emphasized that the statutory scheme is clear and unambiguous, and it cannot reinterpret it to avoid harsh consequences. Reference was made to a Supreme Court judgment to support this stance.Ultimately, the Tribunal concluded that the appeals should be dismissed due to the non-compliance with the order requiring the pre-deposit of the penalty. The impugned order imposing penalties was maintained and sustained. The dismissal of the appeals was based on the failure of the appellants to adhere to the Tribunal's directive regarding the pre-deposit of the penalty amount within the specified timeframe.