2005 (11) TMI 544 - AT - FEMA

Tribunal Dismisses Appeals for Non-Compliance with Pre-Deposit; Financial Hardship Claims Unsupported.

The Tribunal dismissed the appeals against penalties under the FER Act, 1973 due to non-compliance with the pre-deposit order. The appellants' application ... - Issues:- Appeal against penalty imposed for contravention of FER Act, 1973- Non-compliance with pre-deposit order- Application for modification of pre-deposit order based on financial hardship- Consideration of financial condition and statutory provisions for pre-deposit- Review of order under FEM Act, 1999Analysis:1. The judgment involves two appeals against penalties imposed for contravention of FER Act, 1973. The appellants failed to comply with the pre-deposit order, prompting them to file an application for modification based on financial hardship. The Tribunal directed pre-deposit of 30% of the penalty amount within 60 days, failing which the appeals would be dismissed solely on this ground.2. The appellants argued financial hardship in their application for modification, claiming grave financial conditions without providing supporting documents. The Tribunal noted that the appellant firm had been importing goods, indicating a stable financial position. Partnership being a joint entity, financial constraints of one partner reflect on all. The statutory scheme mandates pre-deposit to safeguard penalty realization, and the appellants' claims lacked merit for full dispensation.3. The Tribunal highlighted that rehearing the pre-deposit application was impermissible, but review under FEM Act, 1999 was within its authority. The modification application lacked grounds for review, as financial constraints were already considered in the initial order. The appellants' failure to deposit any amount demonstrated lack of bona fides, essential for equity in their favor.4. The grounds for review, including errors apparent on record, fresh evidence, or similar grounds, were not met in the modification application. The appellants' failure to demonstrate bona fides by attempting to comply or depositing any amount portrayed a lack of integrity. The principle of approaching the Tribunal with clean hands was emphasized, leading to the dismissal of the modification application and the appeals.5. In conclusion, the Tribunal upheld the pre-deposit order, emphasizing the importance of statutory provisions and the appellants' failure to show genuine financial constraints or compliance efforts. The dismissal of the modification application and appeals was based on the lack of equity and bona fides demonstrated by the appellants.