1. This order of the Appellate Tribunal for Foreign Exchange is delivered by Dr. S.D. Singh, Member.

The appellant/applicant Shri Harish Kumar @ Rinku has filed an application for stay and waiver of pre-deposit of penalty (in short application) in the aforesaid appeal praying inter alia therein to waive the pre-deposit of penalty and for stay of the impugned order and for restraining the respondent to recover the penalty. The appeal has been preferred by the appellant/applicant against the adjudicating order No.JD(AS)/l/CHD/2012 dated 16.10.2012 passed by the Joint Director, Enforcement Directorate, Chandigarh in the matter of show-cause notice No. T-4/1-JAL/2006/FEMA/7357 dated 26-6-2006 imposing the penalty of Rs.25,00,000/- upon the appellant/applicant for the alleged contravention that the appellant/applicant without any general or special permission of Reserve Bank of India received amounts totalling to Rs. 2,47,99,350/- in India, otherwise than through an authorized person, by order or on behalf of his friend Madan, a person resident outside India, and thereby he has contravened the provisions of section 3(c) of the Foreign Exchange Management Act, 1999 (in short FEMA) to the extent of said amount and it has also been found that an amount of Rs. 21,75,000/- recovered and seized from his residential premises was an amount involved in the said contravention of the provisions of FEMA which has been confiscated to the Central Government in terms of section 13 (2) of FEMA.

2. We have heard the ld. Counsel for the appellant/applicant and the Ld. ALA on the application and have perused the records carefully. The application has been filed in view of the second proviso to sub-section (1) of section 19 of FEMA, which reads as under:—

"Provided further that where in any particular case, the appellate Tribunal is of the opinion that the deposit of such penalty would cause undue hardship to such person, the Appellate Tribunal may dispense with such deposit subject to such conditions as it may deem fit to impose so as to safeguard the realization of penalty."

There are two important expressions in the aforequoted proviso for consideration before granting any relief under the said proviso, amongst which one is "undue hardship" and the another is imposition of condition to safeguard the realization of penalty. The appellant has also to establish a prima facie case. These requirements for granting relief under the said proviso are well discussed in respect of dispensing with the deposit of duty demanded or penalty levied under proviso to section 35-F of the Central Excise Act, 1944 by the Hon'ble Supreme Court in the case of Benara Valves Ltd. v. CCE [2006] 13 SCC 347. Paras 8 to 16 of the said Benara Valves Ltd. & Others read as under:—

'8. It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no legs to stand on, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine manner unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. Merely because this Court has indicated the principles that does not give a licence to the forum/authority to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest. Where denial of interim relief may lead to public mischief, grave irreparable private injury or shake a citizen's faith in the impartiality of public administration, interim relief can be given.

9. It has become an unfortunate trend to casually dispose of stay applications by referring to decisions in Siliguri, Municipality and Dunlop India cases without analyzing factual scenario involved