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FEMA - Case Laws
Showing 181 to 200 of 854 Records
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2018 (11) TMI 367
FERA violation - cases against a number of exporters for presenting forged copies of shipping bills, GR-I Forms, invoices etc. where no shipment had actually taken place - denial of principle of natural justice - violation confirmed on statement taken during investigation - relying upon statements made under the Customs Act for the purpose of the adjudication proceedings under FEMA - Held that:- Principles of natural justice has been duly followed and the appellant have failed to avail of the opportunities given to him. Moreover, his silence over receipt of the relied upon documents afresh in 2008 after the Tribunal‟s remand order of 16.11.2007 also casts shadow on his intentions except that he appears to be trying to delay the decision. On merits as discussed above, his 3 statements which are voluntarily and the investigations done by the Customs brings out the offence as well as his involvement.
A decided in Vinod M. Chitalia vs. UOI [2012 (5) TMI 157 - BOMBAY HIGH COURT] the investigations done under Customs Act, can be used for the purpose of FERA/FEMA also, as the transaction in this case also is the same. The court further held that “in assessing these findings, the Court cannot be oblivious of the fact that clandestine transaction of the nature involved in the present case, are within the peculiar knowledge of persons such as the appellant who are parties to those transactions. The burden which is cast upon the adjudicating authority to establish a violation must be assessed from a robust and common sense perspective. Clandestine violations take place under the cloak of secrecy. To impose a burden of establishing in an adjudication proceeding, every conceivable link of an unlawful transaction would result in a manifest failure of justice and would defeat the underlying purpose of the Act. Appeal dismissed.
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2018 (11) TMI 310
Application for condonation of delay in filing the appeals - Conversion of petition to an appeal - Held that:- When the petitions came up for consideration, our attention was invited to the decision of the Apex Court in Raj Kumar Shivhare Vs. Asstt. Director, Directorate of Enforcement, (2010 (4) TMI 432 - SUPREME COURT). Therefore, the appropriate remedy to challenge the impugned orders would be an appeal under Section 35 of the FEMA. It is an undisputed position that both these petitions have been filed within a period of 120 days from the date of the impugned order of the Appellate Tribunal as provided under Section 35 of the FEMA.
Mr. Jain, prays that he be allowed to convert this petition into an appeal. Mr. Vyas for the respondent has no objection at this being allowed.
Thu the petitioners are allowed to convert both the petitions into appeals under Section 35 of the FEMA. The petitioners would take the necessary steps including payment of appropriate Court Fees etc. with the Registry to convert both the petitions into appeals on or before 30th November, 2018
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2018 (11) TMI 188
Contravention of Section 8 of the Foreign Exchange Management Act, 1999 read with Section 42(1) thereof along with Regulation 9 and 13 of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 - Appeal to Appellate Tribunal - Held that:- The Tribunal prescribed a condition of deposit of 20% of the penalty amount as a precondition for hearing the Appeals on merits. Such a pre-condition is imminently fair, just and reasonable. It does not deny the appellant a right of appeal as is now projected before us. It ensures that justice would be done as well. Thus, the right of appeal has not been defeated and frustrated and as is now complained. In fact from 14th July, 2009, we have travelled upto 31st October, 2018. Despite this enormous passage of time, the appellants have not complied with this order and the conditions imposed therein. We were prepared to give further time to the appellant to comply with this order, but their counsel argued that they do not have any money. Given their precarious financial position and undue hardship, we must set aside this condition altogether or reduce the amount to a paltry sum of approximately two lakhs.
Tribunal was ready and willing to hear the restoration application provided a fair stand was taken by the appellants. On such occasions, when the restoration applications of the appellants were placed before the Tribunal, they chose to remain absent. They did not cooperate with the Tribunal. The Tribunal was not obliged to wait for them. Its the appellants who desire another opportunity to have an adjudication on merits. However, their conduct is not consistent and justice cannot be rendered to those who have failed to show their bona fides in the instant case. We find that the bona fides are totally lacking. The Tribunal has indulged the appellants enough and we do not see the discretion exercised by the Tribunal to be arbitrary or capacious enabling us to entertain these Appeals.
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2018 (10) TMI 1420
Contravention of section 8 read with section 42 of FEMA, 1999 - Penalty imposed - Directorate has no jurisdiction to issue of the offences allegedly committed during the FERA regime after the repealing of FERA after the expiry of sunset clause on 31.5.2002 - Held that:- Admittedly the Company through which exports were made during 95-96 and as the company has become defunct no exports were made thereafter besides the buyers had gone under ground , auction at the Turkey port following change in the quota system etc.( i.e. letters dt.27.4.2010 and 6.12.2010 as replies to the show cause notice. These replies were not at all considered as could be seen from the findings and order of the Adjudication order.
In the present appeal both the parties had made their submissions on 16th May, 2018 and the order was reserved. On the said date, two weeks time was granted to the parties to file their written submissions.
The written argument of the appellant was received however no written submissions has been filed by the respondent. Even after waiting for the considerable period for the written submissions on behalf of the respondent, when the same was not filed, we proceeded to pass the present order on the basis of the written arguments filed by the appellant and the materials available on record.
Once the issue of SCN of the offence completed in FERA regime no SCN can be issued after 1.6.2002 under FEMA,1999 because of the statutory bar under FEMA, 1999.Accordingly, in the light of the above, the appeal is allowed.
The entire proceedings based on the illegally issued SCN (assuming jurisdiction under FEMA, 1999) is null and void ab-initio and therefore the penalty imposed is untenable by the force of law.
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2018 (10) TMI 1081
Condination of delay as per Section 19 of FEMA - delay in filing appeal - sufficient cause for not filing it within specified period - Held that:- On receipt of the adjudication order, that notwithstanding that efforts were again made by the respondent to serve the copies in person on the appellant, but because of the appellant leaving her residence/premise without any notice could not enable the said service and the postal endorsement is a proof of the same, and that way back in 2009 and 2010, they were pasted on the last known addresses of the appellant.
In spite of that the appellant failed to file any appeal, and suddenly in 2017 she filed the appeals and took the plea that she was in jail and hence the delay, while by their own admission, she was sent to jail only in February, 2017, while the impugned order are of 2008 and 2009. I do not find any cause having being given to explain the delay. Following decision in Esha Bhattacharjee case (2015 (1) TMI 1053 - SUPREME COURT), and in the facts of the case as discussed in previous paras see no reason for condoning the delay. Justice is for both the sides- the appellant and the respondent and such huge delay and thereafter attempts to cover it up would lead to denial of justice to the other side.
No ground to condone the delay running into number of years in all the four appeals. The appellant has not been able to give/prove any sufficient cause to do the same.
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2018 (10) TMI 1015
Penalty on the co-appellant on the charge of violation of Section 3(b), 3(d) and 3(c) of FEMA - Held that:- It is stated on behalf of the appellants that ED without conducting any independent inquiry has simply on the basis of few documents sent by DRI issued a show cause notice to the appellants for alleged under-valuation of furniture imported from China during the year 2006-07 and thereby alleging violation of the provisions of section 3(b), 3(d) and 3(c) of the Foreign Exchange Management Act, 1999 (“the Act”) read with Section 42(1) of the Act.
The show cause notice relied solely on the DRI case which had been settled and closed by the Settlement Commission in 2009 itself. Initiation of proceedings is incorrect when the issue has already been settled by the Settlement Commission. This is against the statutory mandate laid down under provisions of Section 127J of the Customs Act, 1962 which stipulates that no matter covered by such orders shall be reopened in any proceedings under this Act or under any other law for the time being in force. Appeal allowed.
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2018 (10) TMI 411
Refund to the Petitioners of principal amount along with interest - non adherence to Foreign Exchange Regulation Appellate Board orders - Held that:- We find that our Court had in Abu Moosa [2015 (1) TMI 977 - BOMBAY HIGH COURT] and Prabodh Mehta [2012 (7) TMI 145 - BOMBAY HIGH COURT] had occasion in similar facts, directed refund of the amount received by the Respondents along with interest from the date on which the amounts were deposited with the Respondents till repayment.
The Respondents before us refuse to pay interest on the ground that it has not earned any income. Interest is paid as to compensate persons who have been deprived of its amount. Thus in the present facts the Respondents are directed to grant refund aggregating to ₹ 9,50,000/- along with interest thereon @ 6% p.a. from the date of payment / deposit of the Petitioner. The refund should be granted as expeditiously as possible along with interest @ 6% p.a. preferably within a period of 12 weeks from today.
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2018 (10) TMI 221
Non-supply of documents - proceedings on the basis of a complaint under FEMA - documents sought for, relied upon by the respondent-authorities to initiate proceedings against the petitioner, have not been furnished - Held that:- In the light of statement made by the respondent-authorities in their statement of objections that they are required to provide only relied upon documents and accepting their obligation to provide those documents to the petitioner and also having contended that such documents have already been furnished to the petitioner, this Court desist from going into the merits of the case at this stage, inasmuch as, it may prejudice the rights of either of the parties.
This Courts finds that there is no good ground available to entertain this petition and accordingly, Petitions stand rejected.
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2018 (10) TMI 39
Jurisdiction of concerned authorities - Held that:- Respondent nos. 2 and 3 are located in Bangalore and there is a possibility that issue has been examined by the concerned authorities having jurisdiction in respect of Banglore. He, nonetheless, states that the averments made in the petition would be considered by respondent no.1 and if any inquiry or investigation is warranted, steps in this regard would be taken by the concerned authorities.
No further orders are required to be passed in this petition, the same is, accordingly, disposed of.
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2018 (9) TMI 1150
Order passed u/s 37(A)(3) of FEMA, 1999 - Competent Authority (CA) has confirmed the seizure of mutual funds as equivalent to US $ 16,00,000 held outside India by the appellant - whether as per Section 37(A)(4) proviso, the seizure can be set aside which was confirmed by the impugned order dated 18.05.2018? - Appellate Tribunal’s power - Held that:- CA or Adjudicating Authority has the power to deal with this seizure order only, and not review its own order once passed under Section 37(A)(3). Hence, the contention of the appellant that it has the powers to review, is not borne out by this legal provision.
Coming to the Appellate Tribunal’s power, Section 37(A)(5) clearly mentions that any person aggrieved by any order passed by the Competent Authority under Section 37(A)(3) may prefer an appeal to the Appellate Tribunal. Hence, the Appellate Tribunal jurisdiction is limited only to the orders passed by the Competent Authority under Section 37(A)(3). He does not have any original jurisdiction to get into any issues which have not been dealt by the original authority or are subsequent developments to the passing of the order by the Competent Authority.
The law is very clear in as much as the Competent Authority has the power only to confirm or otherwise, the seizure done under Section 37(A)(1).
The Appellate Tribunal’s powers are only limited to hearing of appeals against these orders. In any case, the adjudication proceedings will have to be gone through as Section 37(A)(4) clearly lays down that the seizure will continue till the disposal of adjudication proceedings.
Hence, no merits in the application asking for setting aside the seizure on the above grounds. It is therefore disallowed. Reply be filed in the main appeal within four weeks time and rejoinder within four weeks thereafter.
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2018 (9) TMI 933
Charge under Regulations 8, 9 & 13 of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 and Regulations 3(1) and 3(2) of Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000 read with Section 42 of FEMA, 1999 - Bill of Lading (B/L) relevancy - Held that:- Two sets of documents available for the same shipment under the same B/L nos. While the appellants have claimed one to be genuine, the respondents have claimed the other to be genuine. From the impugned order no investigation done even to establish which was the correct B/L. The adjudication order does not even deal with the Indian High Commission or EFCC, Nigeria’s letter even though it was mentioned before him during the personal hearing.
Enquiries from the Steamer Agent M/s. Arebee Star Maritime Agencies Pvt. Ltd. was also done and the Branch Manager was summoned to appear before the Assistant Director, Enforcement Directorate, Chennai, wherein he stated that they were making enquiries with regard to discharge of shipments at Lagos when it was destined for Russia, and that as soon as they get any evidence regarding the same he would furnish it. However, in the entire order there is no further mention of the result of enquiry.
It a case to be remanded back to the adjudicating authority to go into all the issues including the veracity of the B/L and pass a speaking order after affording an opportunity to the appellants.
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2018 (9) TMI 932
Contravention of the provisions of the FERA Act - accepting interest free security deposit of 65 lacs from the branch office of M/s DNV located in Mumbai, as the Regional Manager of M/s DNV had taken up the flat bearing no. No.24 on 20th floor, Kanchanjunga Mumbai for 36 months which belonged to Appellant's brother and sister-in-law and who had signed a Power of Attorney dated 21.05.1987 in favor of Appellant - Held that:- It appears from the reading of agreement and fact and circumstances, it was merely a care taker agreement for 3 years. From the very wordings that the lease could be granted means that the transaction of the lease would be totally exempted from the general or special permission of RBI. The agreement had no provision for any forfeiture of the said amount or part thereof. The benefit of doubt goes in favour of the appellant because as per facts of the present case, it would be that any security deposit taken for fulfillment of the terms and conditions would not attract any general or special permission of RBI to be taken.
The impugned order is not sustainable as the said caretaker agreement to be a lease agreement and likewise as security deposit as consideration, as the terms „receipts and payments‟ visualized in section 9 (1) (b) & (d) of the FERA Act means consideration.
It is merely in the case of lease agreement that vested right is created in favor of lessee but in the present case no vested right is created as the said caretaker agreement is only a leave and license agreement and thus the Appellant had temporary lien over the said security deposit. The appellant had no relation with the accused person to whom the appellant has only allowed to use the property of the owner/landlord. The appellant has no criminal record for any offence or have any link and nexus with the (then tenant) directly or indirectly to criminal activities. The money paid by him never transferred outside India. Thus, there is no contravention of any provision committed by the appellant.
It is stated on behalf of the respondent during hearing that payment of monthly compensation was payable at the rate of ₹ 9000/- per month but the same was not a subject matter of Memorandum.
Therefore, there was no contravention of the provisions of the FERA Act. And also of the Section 9(1) (b) which stipulates in the explanation to the Section that the money has to come from outside India.
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2018 (9) TMI 669
Jurisdiction under FEMA v/s FERA - appeal lies to the Special Director (Appeals) or Deputy Director - appellant stated that as the appeal was filed under FERA before FEMA came into existence, the appeal should be heard by the Tribunal as under FERA there was no such provision for appeals going to the Special Director (Appeals) - Held that:- As decided in the case of Premier Limited vs. Union of India [2006 (7) TMI 326 - HIGH COURT OF BOMBAY].in Section 49(5)(a) of FEMA the legislature has provided that notwithstanding the repeal, actions taken under FERA shall be deemed to have been taken under the corresponding provisions of FEMA. In Section 49(5)(b) the legislature has provided that the appeals pending before the Appellate Board shall be transferred to the Appellate Tribunal constituted under FEMA. Reading Sub-section (a) and (b) of Section 49(5) of FEMA together, it is evident that unless specifically provided, all actions taken under FERA shall be deemed to have been taken under the corresponding provisions of FEMA. In this view of the matter, the adjudication orders passed by the Assistant Director/Deputy Director of Enforcement under FERA are deemed to be the adjudication orders passed under FEMA and accordingly the appeals against the orders passed by the Assistant Director/Deputy Director of Enforcement under FERA would be maintainable before the Special Director (Appeals)
Hence appeals are to be filed/heard by the Special Director (Appeals). Accordingly, dismiss the appeal with liberty to the appellant to file the same before the Special Director (Appeals)
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2018 (9) TMI 193
Penalty u/s 50 of erstwhile FERA, 1973 for violation of the provisions - non service of the show cause notice upon the appellant prior to 1st June, 2002 under FEMA, 1999 - Held that:- The Adjudicating Officer was obliged to examine the steps taken by the respondent before concluding that the appellant did not comply with the obligation of producing exchange control copies. He ought to have appreciated that a show cause notice or letter of enquiry would have been issued to the appellant by the Enforcement Directorate and if only he had called for examined the record, the non-compliance alleged by the Enforcement Directorate would have been found to be incorrect.
Since there was no service of the show cause notice upon the appellant prior to 1st June, 2002 under FEMA, 1999, the entire proceedings based on the show cause notice against the appellant is null and void and ab-initio. Therefore, the penalty imposed by the impugned order dated 8.9.2004 is untenable. Under these circumstances, the appeal filed by the appellant is allowed by setting aside, the impugned order dated 8.9.2004.
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2018 (9) TMI 192
Guilty of contravention of Section 16(1) of the Foreign Exchange Regulation Act, 1973 - failure to realize amount receivable by them from M/s. Erman Electro Echnik (M/s. EEE) during the period 1990-91? - Held that:- Dy. Director, Enforcement Directorate failed to appreciate that such statement ought not to be relied upon, unless there is independent corroboration of certain material aspect of the said statement, through independent sources is present. There is no evidence with respect to the alleged transaction which was ever produced by Shri Vinod Kumar and or relied upon by the Respondent. Such statement made by Late Shri Ashok Kumar ought not to be relied upon by the Respondent during the adjudication proceedings in the absence of back-up evidence to some extent. Merely on the complaint by the rival party, no penalty can be imposed unless the admission based on some evidences as it is the practice that accuse always alleged that admissions are obtained under threat and pressure. In such situation, proper investigation is required in order to prove guilt of accused party.
The statements of Shri Vinod Kumar are contradictory and self-defeating. Shri Vinod Kumar in his statement dated 09.04.2002 before the Respondent states that he does not have any role to play in the affairs of Appellant No.1, whereas before the Company Law Board, at para 2 of the Judgement dated 18- 04-1999, he takes a completely contrary stand.
The benefit of doubt goes in favour of the appellant. The adjudication Order is not sustainable for the lack of evidences. There is no clear and cogent evidence available on record to show that Shri Ashok Kumar has received any payment pertaining to the transaction in question.
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2018 (8) TMI 1693
Tribunal wholly misdirected itself in failing to follow the settled law in relation to the imposition of penalty by ignoring the settled principle - Held that:- At the hearing of these Notices of Motion, both sides agree that the order of the Tribunal impugned in these appeals suffers from non-consideration of crucial and vital materials. The matter would have to be decided in accordance with law and particularly in the light of what has been observed by this Court on 21st January, 2015, in a detailed order passed in the FEMA Appeals.
Hence, without assigning any reasons, but by keeping all contentions open, the orders impugned in these appeals are quashed and set aside. The appeals are restored to the file of the Tribunal for a decision afresh on merits and in accordance with law. The decision be rendered, uninfluenced by any earlier observations, findings and conclusions. We keep open all contentions and clarify that no opinion is expressed thereon.
The appeals are allowed accordingly. In the light of this order, nothing survives in the Notices of Motion and they are all disposed of.
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2018 (8) TMI 365
Adjustment of penalty from the frozen amount and FDR - review petition - Held that:- At no point of time, did the Enforcement Directorate either seize them or confiscate them so that they could be forfeited to the Central Government. The adjudicating authority has released these amounts from being frozen, by not confiscating them.
This money belongs to the appellant/his son, and while directions for freezing was only a temporary measure, the adjudicating authority should have passed appropriate order of either releasing them or confiscating them. But he has mentioned that he is not confiscating them, meaning thereby that he is releasing them. Once no confiscation order has been passed it is not clear under which provisions of law the said amount was appropriated towards the penalty amount. Without going into the maintainability of the review petition under Section 19 (6), any merit in the review petition wherein they have prayed that the review petition may be allowed by modifying the impugned order to the extent that the principal amount should be confiscated (interest accrued has been appropriated to the Central Government by the impugned order).
No merits in the appeal that this is a blatantly illegal order in as much as appropriation has been ordered of the money which has been released/not confiscated by the adjudicating authority himself. Once the principal amount is released, the question of allowing the “interest accrued on the blocked amount and FDR be credited to the Central Government” (to use the language in the impugned order) does not arise.
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2018 (7) TMI 1976
Status of BCCI as a ‘company’ - Application of Section 42 of the Foreign Exchange Management Act for the alleged violations during the conduct of IPL-2 in South Africa - whether BCCI is a society registered under the provisions of the Tamil Nadu Societies Registration Act, 1975 and as such it is an unincorporated body of associations not falling under the definition of 'company' used in Section 42 of the Foreign Exchange Management Act and that it does not extend to all persons covered by the definition of the 'person' used by Section 2(u) of the Foreign Exchange Management Act? - invocation of the vicarious liability clause framed against the noticees under Section 42(1) and (2) - HELD THAT:- As the issue raised in the present writ petition is no longer res integra, as it has been already settled by the Division Bench of the Bombay High Court in Shashank Vyankatesah Manohar v. Union of India and another [2013 (8) TMI 435 - BOMBAY HIGH COURT] holding that the definition of 'person' in Section 2(u) of the Foreign Exchange Management Act, 1999 is inclusive one and therefore the BCCI as well as the Governing Council of IPL are the persons within the definition of Section 2(u) of the Act, which judgment has also been confirmed by the Supreme Court, the petitioner, who was the Secretary of BCCI during the relevant period, cannot once again agitate the same issue before this Court. Therefore, this Court, being bound by the judgments, finding no merits whatsoever in the writ petition, is not inclined to interfere with the impugned proceedings. Accordingly, this writ petition stands dismissed.
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2018 (7) TMI 1224
Allegation against the appellant Jaswinder Singh as contravened Sections 9 (1) (d) of FERA - payments of ₹ 2.85 Crore to persons in India on behalf of persons residing outside India - Held that:- In any event, the case of the department is improbable on the face of it as the allegation of the department that the appellant indulged in hawala business is falsified from the fact that the said diary allegedly contains the details of the payment made by the appellant Jaswinder Singh for the period of January 1998 onwards to various persons named therein while he was not in India. There was no recovery from the appellant. Counsel for the appellant says that due to long passing of time and harassment, the appellant has compounded his offence and he was accordingly discharge by imposing costs and the same was deposited.
With regard to Disclosure statement of the appellant Jaswinder Singh before Police. The statement of appellant and the co-accused before police is not admissible in evidence and as such no reliance can be placed on this inadmissible piece of evidence.
The other important issue is that dispute contravention facts which are contrary to the evidence available on record such as pass-port entries as well as entries made in diary with one pen, he was also denied permission to cross examine witnesses notwithstanding a specific request in writing in this regard. It is submitted that the statements made by the co-accused or the officers of the ED cannot be taken as corroboration.
The statements should be corroborated from the independent facts and statements are not reliable till their veracity and genuineness is not tested by cross examination.
Therefore, under the established principles of natural justice, the appellant requested before the Adjudication Authority for permission to cross examine the witnesses so as to enable them to establish his innocence and to state and/or explain his case.
The cross examination of the officers who recorded his statement dated 08.09.1998 (in jail) and that of the IO is imperative in order to arrive at the truth of the matter, it was a perfect case where the crossexamined should have been allowed.
Thus ED has failed to prove its case even by way of preponderance of probability and the allegations made by the ED are improbable that no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the appellant. The finding of the Adjudicating Authority was wholly perversed, contrary and those suffer many infirmities.
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2018 (7) TMI 447
Arguable case - Deposit 10% of the penalty amount imposed by the Adjudicating Authority alongwith reliable guarantee for balance 90% for the purposes of entertaining Appellant's appeals on merits - Held that:- In the facts of this case after having come to conclusion that the Appellants have an arguable case, the deposit of 10% of the penalty amount in each of the Appeals would meet the ends of justice. This further requirement of furnishing reliable guarantee for balance 90% is not called for in the facts of the present case. This is particularly so as the impugned order finds that the affidavit filed pleading financial hardship was uncontroverted.
We vary the impugned order dated 25.6.2015 and direct the Appellants to deposit 10% of the penalty amount as directed by the Tribunal within a period of four weeks from today, with the Tribunal. The requirement of providing reliable guarantee is done away with. In case the Appellants fail to deposit 10% of the penalty amount as directed by the impugned order of the Tribunal within a period of four weeks from today, the Tribunal would be at liberty to dismiss the appeals for non-deposit of penalty amount (excluding the reliable guarantee) as directed by impugned order dated 29.6.2015.
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