TaxTMI 
TaxTMI 
2023 (11) TMI 1428
X X X X Extracts X X X X
X X X X Extracts X X X X
....lations framed under that Act. 2. It appears that along with the appeal, the appellant had filed a very brief application which inter alia included the prayer for waiver of pre- deposit of penalty. Subsequently, with the leave of the court, a more elaborate application for waiver was filed on 30/11/2022. In the aforementioned application, it is stated by the appellant that he is going through a financial crisis as a result of which he is unable to make any pre-deposit of penalty. It is also contended that the appellant has a strong prima facie case in his favour and, therefore, the requirement of pre-deposit of Rs. 78,00,000/- imposed on him may be waived off. 3. A brief background of the case was provided by the learned counsel for the appellant. At the relevant time, the appellant was engaged in diamond business. As a part of his business activity, the appellant used to import rough diamonds. A case was booked by the Directorate of Revenue Intelligence (DRI) regarding short-payment of customs duty which was finally settled before the Settlement Commission. However, the information was forwarded to the Directorate of Enforcement which then issued a show cause notice. The sai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....018-19, 2019-20 and 2020-21 have been filed along with the appeal. He submits that as can be seen from the returns, the appellant has no income. He suffered heavy losses in business and had to close it down. It is claimed that the appellant does not have any income whatsoever and, presently, he is dependent upon the support of his children. 7. The respondent Directorate has strongly contested the claims and averments made on behalf of the appellant. In the written reply to the application for waiver, the respondent has stated the appellant is the proprietor of Indostar and Vijay Gems which inter alia used to import polished diamonds from his friend, Shri Kaushik Mehta's firm, namely, Eurostar, having its office in Belgium and Germany. It is contended by the respondent that the appellant has preferred the application on concocted and erroneous grounds with the sole intention of abusing the process of law. During the financial year 2005-06, the appellant made payments through unauthorised channels to overseas suppliers towards undervalued portions of import payments and the appellant's private accounts contained the names of the person through whom payments were made. During J....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der of Foreign Exchange) Regulations, 2000 • Vide letter dated 13.11.2010 the appellant approached the Settlement Commission and admitted that he does not intend to dispute the issue and also admitted the customs duty liability. He also filed an application for compounding of the offence before the appropriate authority under Section 15 of FEMA, 1999 read with Rule 5 of the Foreign Exchange (Compounding Proceedings) Rules, 2000, and requested the compounding authority to take a lenient view of the offence and pass orders accordingly. However, the authority was of the view that the application could not be proceeded with further and returned the same to the appellant vide his letter dated 08.12.2010 9. It is the contention of the respondents that the learned adjudicating authority has considered all these facts before imposing the aforesaid penalty of Rs. 78,00,000/. It is pointed out that the amount involved in the present case is USD 79,30,37,520 /- (approximately Rs. 80 crore) involving contravention of sections 3(a), 3(b), 3(d) and 4 and section 8 of FEMA, 1999, read with Regulation 3, 4 and 5 of the Foreign Exchange Management (Realisation, Repatriation and Surr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion that arises is what is the quantum of waiver, if any, to be granted in the instant case. 12. The appellant has largely relied upon the Income-tax returns to contend that he has no income whatsoever. It may also be mentioned that the appellant has only filed copies of the ITR acknowledgements. It is not known whether any of the returns were selected for scrutiny by the I-T Department and what was the final outcome thereof. For the purposes of this order, it is presumed that the final assessment in the case of the appellant, if at all the ITR for any of the year was taken up for scrutiny, was completed at the income returned. The respondent has pointed out that the appellant has not mentioned the income of the two concerns, namely, Indostar and Vijay Gems. There is not much merit in this contention of the respondent Directorate. As per the respondent's own written reply, the two concerns are the proprietary concerns of the appellant. Under the Income- tax Act, income from a proprietary concern will be included in the income of the proprietor filed in his capacity as an individual. As such, there can be no separate ITR for a proprietary concern. The situation would have been di....