Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases FEMA FEMA + HC FEMA - 2012 (8) TMI HC This

  • Login
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2012 (8) TMI 216 - HC - FEMA


Issues:
1. Interpretation of appellate Tribunal's jurisdiction under FEMA and FERA.
2. Repeal of FERA and transition to FEMA.
3. Validity of penalty imposed under FERA.
4. Adverse inference drawn by the Appellate Tribunal.

Interpretation of appellate Tribunal's jurisdiction under FEMA and FERA:
The appeal raised substantial questions of law regarding the appellate Tribunal's jurisdiction under the Foreign Exchange Management Act, 1999 (FEMA) and the Foreign Exchange Regulation Act, 1973 (FERA). The key issues included whether the Tribunal could exercise revisional powers over FERA orders post-repeal, and if FEMA saved the revisional powers conferred under FERA for the Tribunal. Additionally, the scope of revisional powers under FEMA and the necessity for manifest illegality or miscarriage of justice were questioned.

Repeal of FERA and transition to FEMA:
The case involved a Director of a company who received payments from an Indian company for flat sales, leading to FERA proceedings. With FERA's repeal in 2000 and FEMA's enactment, a revision petition was filed challenging the Deputy Director's order. The Tribunal imposed a penalty under FEMA, triggering the appeal.

Validity of penalty imposed under FERA:
The appellant contested the penalty under FERA Section 9(1)(b) for receiving payments on behalf of non-resident Indians without RBI exemption. The Tribunal inferred guilt based on lack of agreement evidence, disregarding the appellant's claim of no formal agreement. The Court found the inference unjustified and quashed the penalty.

Adverse inference drawn by the Appellate Tribunal:
The Appellate Tribunal's adverse inference, due to missing agreement evidence, was deemed erroneous. The Court ruled that without proof of an agreement, penalizing the appellant was unjust. The Tribunal's decision was criticized for being speculative, leading to the appeal's success and the penalty's annulment.

In conclusion, the judgment clarified the Tribunal's jurisdiction post-FERA repeal, addressed the validity of penalties under FERA/FEMA, and criticized the Tribunal's adverse inference methodology. The appellant's appeal succeeded, with the penalty overturned, emphasizing the importance of evidence-based decisions in legal proceedings.

 

 

 

 

Quick Updates:Latest Updates