MEDOPHARM Vs. SPECIAL DIRECTOR, DIRECTORATE OF ENFORCEMENT

JUDGEMENT

(1.) BY consent, the writ petition itself is taken up for final disposal. Heard Mr. N. Viswanathan, learned counsel for the petitioner and Mr. K. Ramasamy, learned Special Public Prosecutor appearing for the respondent/Directorate of Enforcement.

(2.) THIS writ petition impugns the order passed by the Appellate Tribunal for Foreign Exchange, New Delhi, dated 27.03.2008. The petitioner preferred the appeal challenging the order passed by the Special Director of Enforcement, Directorate of Enforcement, Government of India, New Delhi, dated 16.10.2007. The contravention alleged against the petitioners was under Section 8 of the Foreign Exchange Management Act, 1999 (FEMA) read with Regulations 8, 9 and 13 of Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 and Regulation 3(1) and (2) of Foreign Exchange Management (Manner of Receipt & Payment) Regulations, 2000, read with Section 42 of FEMA, 1999.

(3.) THE petitioners preferred appeal before the Appellate Authority and also sought for stay of the levy of fine on the first petitioner firm as well as its Managing Partner and Executive Director (Exports). It was contended that they have a good prima facie case and therefore, the entire demand should be dispensed with and the appeal should be heard on merits. The respondent resisted the application for dispensation of the pre -deposit of fine by contending that the petitioners mis -declared the destination of export and ultimately, diverted the consignment to Lagos (Nigeria), instead of original destination for a Port of Russia and therefore, the realisation of the export proceeds is of no consequence and the order passed by the original authority dated 16.10.2007 is valid and proper. The Appellate Tribunal, referred to the decision of the Hon'ble Supreme Court in the case of Benara Valves Ltd. v. CCE : 2006 (204) ELT 513 (SC), in which the Hon'ble Supreme Court considered the expression "undue hardship" and after taking note of Section 52(2) of the FERA, 1973, the petitioners were directed to deposit 50% of the penalty amount in respect of the appeals, within a period of 30 days.