2014 (8) TMI 1017 - AT - FEMA

Condonation of delay in filing the appeal - delay of 8 years after ex-parte order - Section 52 of Foreign Exchange Regulation Act, 1973 read with Section 19 of the Foreign Exchange Management Act, 1999 - Held that - proceedings were held ex parte. The show cause notice was served by affixation. There appears to be discrepancies in the amount as shown in the original invoice which is ₹ 4,20,750/- and the amount shown in entry No.4 of annexure-A of the show cause notice which instead of ₹ 4,20,750/- has been shown to be ₹ 4,07,750/-. Thus, it is apparent that there appears to be some error. The effect of the error will have to be examined. The cause for delay in instituting the appeal after a gap of more than eight years appears to us to be sufficient and convincing. There is no proof on record that the show cause notice or the adjudication order were duly served upon the appellant or the erstwhile company M/s. Owen Brockway (I) Ltd. The delay condonation application is supported by uncontroverted affidavit. In this view of the matter, the application deserves to be allowed. - Delay condoned.

Summary

Issues involved:
Delay in filing appeal under Section 52 of Foreign Exchange Regulation Act, 1973 read with Section 19 of the Foreign Exchange Management Act, 1999 challenging the order of the Adjudicating Authority dated 4-8-2003, and the application for condonation of delay.

Analysis:
The appeal was filed challenging an order of the Adjudicating Authority dated 4-8-2003 under relevant sections of the Foreign Exchange Regulation Act and the Foreign Exchange Management Act. The appellant contended that they had no knowledge of the proceedings before the adjudicating authority and learned about the penalty imposed against them through a demand notice served in relation to a previous company that had merged with the appellant's company. The appellant argued that no show cause notice was served, and the adjudication order was passed without proper verification. The delay in filing the appeal was attributed to the appellant's lack of awareness, and it was emphasized that the appeal was filed promptly after learning about the proceedings and the order. The appellant sought condonation of the delay, supported by an affidavit. The Tribunal considered the submissions and evidence presented.

The appellant's counsel argued that the appellant became aware of the impugned order only upon receiving a certificate of public demand showing them as a defaulter, which led to inquiries revealing the basis of the demand notice. It was highlighted that the appellant had no knowledge of the transactions in question and had legally acquired shares after RBI approval. The appellant's company name had changed due to mergers approved by the High Courts. The appellant denied any liability for the alleged transactions and emphasized the lack of deliberate delay in filing the appeal. The appellant stressed that the proceedings were ex parte and violated principles of natural justice, resulting in a significant penalty. The appellant expressed the need for an opportunity to contest the allegations. The Tribunal noted the absence of formal objections to the delay.

Upon review, the Tribunal found discrepancies in the amount stated in the original invoice and the show cause notice, indicating a possible error. The Tribunal considered the sufficiency and persuasiveness of the reasons for the delay, noting the lack of proof of proper service of the show cause notice and adjudication order. The Tribunal observed that the delay condonation application was supported by an uncontroverted affidavit. Consequently, the Tribunal allowed the application, condoned the delay, directed the registry to register the appeal, and set a date for listing the appeal.