UNION OF INDIA AND ANR. versus ADANI EXPORTS LTD. & ANR.

Citation: [2007] 11 S.C.R. 974 · Decided: 12-11-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off

Judgment (excerpt)

A 
UNION OF INDIA AND ANR. 
v. 
ADANI EXPORTS LTD. & ANR. 
NOVEMBER 12, 2007 
B 
[DR. ARIJIT PASA VAT AND S.H. KAPADIA, JJ.] 
Customs Act, 1962; S. 129 £/Foreign Exchange Management Act, 
1999; Ss. 49(3) and 49(4)/Foreign Exchange Regulations Act, 1973; 
c S.50: 
Misuse of foreign exchange by mis-declaration of description and 
over invoicing of imported goods--Show-cause-Notices-Revenue 
imposing penalty against noticees-Appeals along with application for 
D dispensation of pre-deposit of penalty filed by noticee-Applicationfor 
t 
pre-deposit rejected by Foreign Exchange Appellate Tribunal-
-:\ 
Challenge to-Allowed by High Court remitting the matter to 
· 
adjudicating authority-On appeal, Held: Pending appeal before 
Tribunal, High Court was not justified in going into merits and 
E remitting the matter to adjudicating authority-As the Tribunal already 
passed consequential order on the basis of order passed by High Court, 
impugned order and the order passed by Tribunal set aside-Tribunal 
directed to take up appeals afresh without insistence on pre-deposit-
Directions issued 
F 
Show-cause-Notices were issued by Revenue to respondents 
and others for the alleged violation of certain provisions of the 
.'.{ 
Customs Act 1962. Later, Adjudicating Authority passed the orders, 
which were challenged by the respondents before the Customs, 
Excise and Service Tax Appellate Tribunal (CESTAT). Show-cause-
G Notices were also issued by the Revenue under Foreign Exchange 
Management Act, 1999. The Authorities passed orders in terms of 
the Foreign Exchange Regulation Act, 1973. The adjudicating 
,, ... 
authority found the noticees guilty of the charges and in terms of 
the powers conferred under Section 50 of the Foreign Exchange 
H 
974 
~ 
UNION OF INDIA v. ADANI EXPORTS LTD. 
975 
-'r 
Regulation Act read with Section 49(3) and 49(4) of the Foreign A 
Exchange Management Act imposed certain amount as penalties 
on them. Questioning correctness of the adjudication order, appeals 
along with application for dispensation of pre-deposit of penalty 
were preferred by the respondents before the Foreign Exchange 
Appellate Tribunal. The application was rejected by the Tribunal. B 
j 
Aggrieved, the respondents filed a writ petition before the High 
Court. High Court set aside the order passed by the adjudicating 
authority and remitted the matter to the adjudicating authority. 
Hence the present appeal. 
Appellant-Union oflndia contended that the approach of the c 
High Court is clearly unsustainable. High Court itself noticed that 
the primary challenge was to the order passed by the Tribunal 
relating to pre-deposit. Though some grou.nds were taken relating 
to the merits of the adjudication, the High Court should not have 
D 
dealt with them and should have left those matters to be adjudicated 
).. 
by the Tribunal. 
..- . 
Respondent-assessee submitted that earlier there was an order 
passed by CEST AT which was in favour of the respondents-noticees. 
Therefore, the High Court was justified in remitting the matter to E 
the adjudicating authority. 
Disposing of the appeal, the Court 
HELD: 1.1. It is not in dispute that the respondents have filed 
appeals before the Tribunal; and that primary challenge in the writ F 
t 
petitions before the High Court was to the order relating to pre-
deposit, therefore, the High Court was not justified in going into the 
merits and expressing its views and thereafter remitting the matter 
to the Tribunal. Such a course was not available to be adopted. 
[Para 8] [978-G, H] G 
1.2. The Tribunal has highlighted the relevant aspects while 
-"'I 
rejecting the prayer for dispensation of pre-deposit. The three 
aspects to be focused while dealing with such applications are (a) 
prima facie case (b) balance of convenience and ( c) irreparable loss. 
H 
976 
SUPREME COURT REPORTS 
(2007] 11 S.C.R. 
A The Tribunal categorically found that these factors were established 
by the respondents. Even when Tribunal decides to grant full or 
partial stay it has to impose such conditions as may be necessary 
to safeguard the interest of Revenue. This is ap imperative 
requirement under Section 129E of the Customs Act. Normally, 
B therefore, this Court would have asked the respondent" assessee to 
comply with the orders of Tribunal, by setting aside the impugned 
order. But considering the fact that the Tribunal already passed 
consequential order on the basis of the High Court's order dated 
18.8.2006,

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