TMI Blog2015 (8) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... certain companies or concerns abroad to BCCI, but reached it not through an Indian subsidiary is something which should not invite penal consequences. Once the monies have reached the beneficiary through appropriate banking channels, then, there is no violation or breach of law is the case put up by the Appellants in these Appeals. Chairman was required to apply his mind to the differences that were noted by him. It was open for him to find out as to whether the Appellants having made out a prima facie case, could any relief be granted and in terms of the legal provisions. If the legal provisions enable the Tribunal to consider the case of “undue hardship”, whether that term is to be given a restricted meaning, namely, financial hardship alone or whether that should take in its import a prima facie case being made out and the point being arguable, a party would suffer unless the condition of pre-deposit is waived totally or partially. Prima facie case in favour of appellant. Appellants would have to satisfy the Tribunal that monies may have been remitted by certain companies or concerns abroad to BCCI, but reached it not through an Indian subsidiary is something which sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain amounts were remitted. They were remitted and reached BCCI through concerns abroad rather than the Indian subsidiary. The compliances had to be made with the Regulations under the Foreign Exchange Management Act, 1999 (FEMA). Those having not been made, the Enforcement Directorate proceeded on the footing that the parties have violated the terms and conditions under these regulations and consequently of the Act itself. The notices to show cause were issued and in terms thereof, certain orders have been passed. The proceedings culminated in imposition of penalty for unlawful remittance allegedly made and which is computed in terms of the provisions of FEMA. 4. We do not wish to express any opinion insofar as the merits of the matter including the computation of penalty. What we have noted is that aggrieved by the order passed, Appeals were preferred and the Appellate Tribunal was therefore approached with applications seeking waiver of the condition of pre-deposit. The matter was placed before the Appellate Tribunal Foreign Exchange (Appeal Nos. 9-19/2013). The applications were heard extensively. The parties argued as to how the adjudication order dated 30th January, 2013 pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this Court in these Appeals. They are admitted on the following substantial questions of law :- (a) Whether, in the facts and circumstances of the present ease, the ATFE, despite finding that the deposit of 40% of the penalty being excessive, can still order the deposit of the same? (b) Whether, in the given facts and circumstances of the present case, where all the three members have found grounds for waiver of pre-deposit, the Appellants can still be directed to make a deposit of 40% of the penalty? (c) Whether, section 31 of the Act limits the power of the Hon ble third member to merely adopting one of opinions of the members on the point of difference, despite not agreeing completely with either of the said opinion? 9. With the consent of Mr. Khambatta, the learned Senior Counsel appearing for the Appellants and Mr. Rana, the learned Senior Counsel appearing for the Respondent, we dispose of the Appeals finally. 10. We have perused the Memo of Appeals and the Annexures thereto including the impugned orders. We find that the Chairman was required to apply his mind to the differences that were noted by him. It was open for him to find out as to whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h must be gone into by the Tribunal and on merits. However, in the given facts and circumstances, the Appellate Tribunal should have imposed reasonable conditions and exercised its discretion judiciously and not gone by any formula. It should have, even at the prima facie stage, satisfied itself as to whether there is any breach or violation of law. If that breach and violation is serious enough and requiring imposition of penalty, whether there is any discretion in the matter of imposition of penalty. Further, the settled principles enabling imposition of penalty have to be read into the subject legal provisions or they are not permitted to be so read. When these are vital and crucial questions raised, then, the Tribunal should have imposed conditions which would enable the parties to prosecute their Appeals on merits. Imposition of a condition and of cash deposit of 40% of the amount awarded and imposed as penalty and giving a Bank Guarantee of 60% for the balance, in the given facts and circumstances and peculiar to these cases, does not meet the ends of justice. Some of the Appellants are individuals and they have raised a plea that at the time of finalisation of the transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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