Amarwati Exports Pvt. Ltd. vs Uoi And Ors.
2005 Latest Caselaw 902 Del

ORDER

Gita Mittal, J.

1. This writ petition has been filed by the petitioner aggrieved by the order dated 3rd March, 2005 whereby the Appellate Tribunal for Foreign Exchange, while hearing an application seeking waiver of condition of predeposit of the penalty as a pre-condition for entertainment of the appeal, directed the petitioner No. 1 to make a pre-deposit of 30% of the amount of penalty within 45 days and other petitioners were directed to make deposit of the full amount of penalty within 45 days failing which it was directed that the appeal would stand dismissed.

2. It appears that the Adjudicating Authority passed an order on 11th August 2004 imposing a penalty of Rs. 3,40,000/- on the petitioner No. 1 and Rs. 50,000/- each on the petitioner Nos. 2 to 5. The writ petitioners are stated to be suffering from financial difficulty and hence it has been pleaded on their behalf in the appeal preferred against the order made by the Adjudicating Authority that there may be dispensation of the pre-deposit requirement.

3. Learned Counsel appearing for the petitioners submits that the petitioners had a good prima facie case inasmuch as non-recovery of dues from foreign buyers by itself is not sufficient to impose penalty. However, the Adjudicating Authority would be empowered in imposing a liability upon an exporter if no effort has been made to realise the amount. Perusal of the order dated 11th August, 2004 shows that the adjudicating authority arrived at a conclusion that the petitioners had made efforts to realise the amount and two directors namely Mukesh Sukhani (petitioner No. 3) and Mr. S.K. Daga (petitioner No. 5) had even gone to London in November, 1993 to settle the matter but the matter could not be settled and the company suffered heavy losses. It is also pointed out that the Reserve Bank of India had taken these factors into consideration and had allowed four of the goods receipts to be written off.

4. Learned Counsel for the petitioner submits that the petitioner No. 2 Mr. Ajay Kumar Sukhani had expired during the pendency of the writ petition and Mr. Mukesh Sukhani left the business of the petitioner No. 2 several years ago. Reliance has been placed on several judicial pronouncements including entitled Maina Khemka v. Union of India, 1987 (28) ELT 61 (Delhi) entitled Uptron Powertronics v. Collector of Central Excise, Meerut, 1989 (44) ELT 401 (Ker.); entitled Rubicon v. Collector of C. Ex. and 1988 (35) ELT 449 (All.) entitled M.C. Goel v. Union of India and Ors.

5. In this view of the matter, I find force in the submissions made on behalf of the petitioner to the effect that they have a prima facie case and the same merited consideration. It has been placed before me that the petitioner company had suffered huge losses and documents in this behalf were placed before the Appellate Tribunal as well as before this Court.

6. In this view of the matter, it is directed that subject to the petitioner No. 1 making a deposit of 15% of the amount of penalty within three months from today and other petitioners making a deposit of 50% of the penalty amount, awarded against them within the same period, there appeals shall not be dismissed on the ground of failure to comply with the pre-deposit condition.

7. This writ petition is allowed in the afore stated terms.