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FEMA - Case Laws
Showing 261 to 280 of 1440 Records
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2019 (8) TMI 682
Acquiring and transferring foreign exchange equivalent to ₹ 208 crores without the prior general or special permission of the RBI - Section 8(1) of FERA, 1973 - allegation is made that M/s. THL have not provided any documents to prove the source of funds which they have invested/remitted to M/s. Sterlite Industries (India) Limited etc. in India and because some of the Directors are common to both the companies, it has been held that this money has actually been funded by M/s. Sterlite Industries (India) Limited to M/s. THL and then back to M/s. Sterlite Industries (India) Limited.
HELD THAT:- There is no prima facie evidence, documentary or otherwise on which the adjudicating authority has relied upon to conclusively prove the above charges. Whether there is a round tripping of funds, the interests of the common Directors in each of these companies, the actual source of funds, are matters of detail which will be gone into at the final hearing stage. Prima facie, it is found that the appellants have a strong case on merits and accordingly stay the pre-deposit. They have not pleaded for any undue hardship and hence no orders are passed on the same.
List the matter for final hearing on 14th October, 2019.
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2019 (8) TMI 681
Restoration of appeal - appeal was dismissed on time limitation as well as for non-compliance with the pre-deposit - HELD THAT:- That Delhi High Court’s order, clearly mentions only two appeals i.e. 475 and 543 of 2004 of having being remanded to the AT. There is no such order with regard to the other two appeals i.e. 473 and 488 of 2003 and hence it was legally required for the appellants to have filed, if they so desired, a proper restoration of appeal applications with valid grounds and reasons. As discussed above, they have failed to do so either in their applications or during the hearing - the restoration of appeals applications in appeal No. 473 & 488 of 2003 is dismissed as rejected as is without any grounds and substance.
Other two appeals i.e. 475 & 543 of 2004 which has been remanded by the Hon’ble Delhi High Court - HELD THAT:- The final hearing was commenced on 11.04.2019, adjourned and treated as part heard to 11.07.2019 at the request of one of the appellants and again adjourned and treated as part heard to 26.07.2019 at the request of the other appellant. However, again on 26.07.2019, there was a request for adjournment by one of the appellants - appeals were released from part heard and is now listed to be heard afresh on 25th October, 2019.
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2019 (8) TMI 266
Imposition of penalty by Special Director - contravention of Sections 8(1) & 9(1)(a) of FERA, 1973 and Sections 9(1)(f)(i), 8(1) & 9(1)(a) of FERA, 1973 - unlawful detention - initiation of adjudication proceedings as contemplated under Section 51 FERA, 1973.
HELD THAT:- The Adjudicating Authority has not been taken into account in the Impugned Order that prior to the Notification dated 31.07.1995, the position was that foreign currency could be deposited in NRE Accounts by power of attorney holders of NRIs. That being the case the necessary ingredients to make out the violations under Sections 8(1), 9(1)(a) and 9(1)(f) of FERA are not made out - It is rightly stated that in the Impugned Order proceeds on the erroneous premise that the foreign exchange deposited in the NRE Accounts of Mr. V.D. Jaiswal were deposited by the Appellant, whereas in fact the deposits of foreign exchange in the said Accounts were made by Mr. V.D. Jaiswal from his earnings abroad.
The Impugned Order all the material facts were not taken into account the fact that the Adjudicating Authority has in 52 cases against the Appellant, quashed penalty imposed against him and the same have till date not been challenged by the Respondent before the Appellate authorities. The present proceedings, which are based on factually parallel route, atleast all the said orders and facts ought to have been considered in the impugned at the time of passing the order.
In the present case, it is the case of the appellant that apart from the retracted confessional statement of the Appellant, there is no independent evidence on record to corroborate the retracted confessional statement of the Appellant - the said statement cannot be relied upon to impose any penalty upon the Appellant.
Appeal allowed - decided in favor of appellant.
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2019 (8) TMI 265
Maintainability of the appeal - Section 19 of the Foreign Exchange Management Act, 1999 - appeals were fixed for orders when there is a difference of opinion - HELD THAT:- There is no dispute that the impugned orders are interlocutory orders and these orders are passed during the course of inquiry proceedings as provided under the Act and Rules thereto. The object of Section 19 (1) is to give a right to appeal to a party aggrieved by an order which affects the party’s right or liability. If the present type of orders are allowed to be agitated than there will be no end to litigation and the very purpose of the relevant provisions and intention of the legislature would be defeated.
The scope of the words “an order” of Adjudicating Authority is not as wide as “any order” or “every decision or order” in the context of Sections 19 (1), 19 (6) & Section 35 respectively of FEMA, 1999 - As held by Hon’ble Supreme Court, in many judgments, only those orders which affect the rights and liabilities of the parties can only be appealable.
After considering the materials on record, oral and written submissions of learned counsels and the relevant judgments in the present appeals, I do not find any materials to support that the present impugned orders in any way affects the rights and liabilities of the parties, hence in view of the discussions made in the preceding paras, it is held that these impugned orders are not covered within the scope of the words “an order” occurring in Section 19 (1) of FEMA, 1999 for the purpose of filing an appeal as required under the said section. Therefore, these appeals are not maintainable.
Appeal not maintainable.
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2019 (8) TMI 247
Summary: The Supreme Court of India, in a case with citation 2019 (8) TMI 247 - SC, ordered that the counsel for the appellants must file an affidavit with proof of dasti service upon the sole respondent within two weeks in C.A. No. 4228-4261/2011. Ms. Indu Malhotra was the judge presiding over the case.
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2019 (8) TMI 216
Remedy of instituting an appeal to the Special Director (Appeals) - impugned order was served upon Petitioners by pasting on the premises sometime on 23rd February, 2019 and this Petition was lodged in the first week of May, 2019 - time limitation - HELD THAT:- If any issue of limitation arises, we are sure that the Appellate Authority will give due regard to all these circumstances. However, since the Petitioners haves alternate and efficacious remedy available under the FEMA itself, we are not inclined to entertain this Writ Petition.
This Petition is disposed of by granting liberty to the Petitioners to institute an appeal against the impugned order, in case the Petitioners so choose. All contentions of the Petitioners are expressly kept open, since we have not examined the merits of the matter.
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2019 (8) TMI 215
Maintainability of petition - Petition by a person who refuses to subject himself to Indian Laws - whether the Writ Court should exercise its jurisdiction in case of a Petitioner who has been issued a non-bailable warrant by the Special Court under the Prevention of Money Laundering Act, 2002 (PMLA) - HELD THAT;- This Court by its [2018 (2) TMI 762 - BOMBAY HIGH COURT] rejected the above contention and entertained the Petition by this very petitioner. We are informed that the status and condition of the Petitioner viz-a-viz Indian Law continues to remain what it was on 30th January, 2018 i.e. no red corner notice has yet been issued in respect of the Petitioner. These facts are not disputed and distinguished by the Revenue. Thus, this issue having already been considered by a coordinate bench of this Court and no new facts have thereafter have been brought to our notice which would warrant a different view.
Rejection of Petitioner's application for copy of the reply filed by BCCI - permission for joint hearing of all the noticee - denial of cross-examination - HELD THAT:- The compliant/ show cause notice relies upon the statement of persons of whose cross examination is sought. Thus, the basic rules of natural justice would require grant of the same, in case, the statements are being relied upon by the Respondent No.1 - the Respondent No.1 would grant cross examination of the five persons in case it seeks to rely upon the same.
Permission for joint hearing of all the noticee - HELD THAT:- It gives no reason for refusing the same. It rejects the requirement only by stating that it would cause prejudice. Therefore, the aforesaid directions in the impugned communication dated 8th January, 2018 is set aside and the Respondent No.1 would deal with the above request afresh and dispose of the same in accordance with law.
Rejection of the request for a copy of the reply filed by BCCI by only stating it would cause prejudice - HELD THAT:- No reasons in support thereof are indicated therein. Thus, the above communication dated 21st August, 2017 is set aside to the above extent and restored to Respondent No.1 for fresh decision.
Petition disposed off.
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2019 (8) TMI 214
Maintainability of petition - initiation of proceedings u/s 7(3) of the Foreign Exchange Management Act, 1999 - availability of alternative and efficacious remedy of appeal - HELD THAT:- It is not in dispute that the proceedings are initiated by the Adjudicating Authority under Section 7(3) of the FEMA and the impugned order passed by the Adjudicating Authority on 31.8.2017 exercising the powers under Section 13(1) of the FEMA. Therefore, the petitioners have got an alternative and efficacious remedy of appeal before the Appellate Authority under Section 17 of the FEMA - Section 17(4) clearly depicts that on receipt of an appeal under sub-section (1), the Special Director (Appeals) may after giving the parties to the appeal an opportunity of being heard, pass such order thereon as he thinks fit, confirming, modifying or setting aside the order appealed against.
The contention of the learned counsel for the petitioners that the Appellate Authority cannot expunge the adverse remarks passed by the Adjudicating Authority, cannot be accepted. The Appellate Authority has got every right to confirm, modify or set aside the order appealed against.
The writ petitions are disposed of as not maintainable with liberty to the petitioners to avail the alternative remedy of appeal under the provisions of Section 17 of the FEMA within a period of three weeks from the date of receipt of copy of the order.
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2019 (8) TMI 213
Imposition of penalty by Special Director - contravention of Sections 6(4), 6(5), 49, 73(3) of FERA, 1973 r/w NRE Account Rules 1970 - initiation of adjudication proceedings as contemplated under Section 51 FERA, 1973 within 30 days - HELD THAT:- In the Impugned Order the factum of prior to the Notification dated 31.07.1995, the position was that foreign currency could be deposited in NRE Accounts by power of attorney holders of NRIs. The same was requisite requirement to make out the violations under Sections 8(1), 9(1)(a) and 9(1)(f) of FERA are not made out - In the Impugned Order, the Adjudicating Authority has not taken into account the fact that the Adjudicating Authority has in 52 cases against the Appellant, quashed penalty imposed against him and the same have till date not been challenged by the Respondent before the Appellate authorities. The present proceedings, which are based on factually parallel route, atleast all the said orders and facts ought to have been considered in the impugned at the time of passing the order.
Repatriation of statement after two days - HELD THAT:- It is well settled law that a retracted confession can never be the basis of any penalty to be imposed upon a person, unless substantially corroborated by independent sources.
In the present case, apart from the retracted confessional statement of the Appellant, there is no independent evidence on record to corroborate the retracted confessional statement of the Appellant - Therefore, the said statement cannot be relied upon to impose any penalty upon the Appellant.
Appeal allowed.
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2019 (8) TMI 139
Hawala transactions - Detention order - smuggling of foreign origin gold by a syndicate of persons from UAE to India - the sale proceeds of the smuggled gold were siphoned off to Dubai through hawala. - Offences punishable under Section 135 of the Customs Act, 1962.
Whether the orders of detention were vitiated on the ground that relied upon documents were not served along with the orders of detention and grounds of detention? - Whether there was sufficient compliance of the provisions of Article 22(5) of the Constitution of India and Section 3(3) of the COFEPOSA Act?
Whether the High Court was right in quashing the detention orders merely on the ground that the detaining authority has not expressly satisfied itself about the imminent possibility of the detenues being released on bail?
HELD THAT:- It is well settled that the order of detention can be validly passed against a person in custody and for that purpose, it is necessary that the grounds of detention must show that the detaining authority was aware of the fact that the detenu was already in custody. The detaining authority must be further satisfied that the detenu is likely to be released from custody and the nature of activities of the detenu indicate that if he is released, he is likely to indulge in such prejudicial activities and therefore, it is necessary to detain him in order to prevent him from engaging in such activities.
Whether a person in jail can be detained under the detention law has been the subject matter for consideration before this Court time and again. In HUIDROM KONUNGJAO SINGH VERSUS STATE OF MANIPUR & ORS. [2012 (5) TMI 732 - SUPREME COURT], the Supreme Court referred to earlier decisions including Dharmendra Suganchand Chelawat v. Union of India DHARMENDRA SUGANCHAND CHELAWAT VERSUS UNION OF INDIA [1990 (2) TMI 154 - SUPREME COURT] and reiterated that if the detaining authority is satisfied that taking into account the nature of the antecedent activities of the detenu, it is likely that after his release from custody he would indulge in prejudicial activities and it is necessary to detain him in order to prevent him from engaging in such activities.
Whether there was awareness in the mind of the detaining authority that detenu is in custody and he had reason to believe that detenu is likely to be released on bail and if so released, he would continue to indulge in prejudicial activities - HELD THAT:- In the present case, the detention orders dated 17.05.2019 record the awareness of the detaining authority:- (i) that the detenu is in custody; (ii) that the bail application filed by the detenues have been rejected by the Court. Of course, in the detention orders, the detaining authority has not specifically recorded that the “detenu is likely to be released”. It cannot be said that the detaining authority has not applied its mind merely on the ground that in the detention orders, it is not expressly stated as to the “detenue’s likelihood of being released on bail” and “if so released, he is likely to indulge in the same prejudicial activities”. But the detaining authority has clearly recorded the antecedent of the detenues and its satisfaction that detenues Happy Dhakad and Nisar Aliyar have the high propensity to commit such offences in future - The satisfaction of the detaining authority that the detenu is already in custody and he is likely to be released on bail and on being released, he is likely to indulge in the same prejudicial activities is the subjective satisfaction of the detaining authority.
The satisfaction of the detaining authority that the detenu may be released on bail cannot be ipse dixit of the detaining authority. On the facts and circumstances of the present case, the subjective satisfaction of the detaining authority that the detenu is likely to be released on bail is based on the materials. A reading of the grounds of detention clearly indicates that detenu Nisar Aliyar has been indulging in smuggling gold and operating syndicate in coordination with others and habitually committing the same unmindful of the revenue loss and the impact on the economy of the nation. Likewise, the detention order qua detenu Happy Dhakad refers to the role played by him in receiving the gold and disposing of the foreign origin smuggled gold through his multiple jewellery outlets and his relatives - The High Court erred in quashing the detention orders merely on the ground that the detaining authority has not expressly recorded the finding that there was real possibility of the detenues being released on bail.
The court must be conscious that the satisfaction of the detaining authority is “subjective” in nature and the court cannot substitute its opinion for the subjective satisfaction of the detaining authority and interfere with the order of detention. It does not mean that the subjective satisfaction of the detaining authority is immune from judicial reviewability - By various decisions, the Supreme Court has carved out areas within which the validity of subjective satisfaction can be tested.
In the present case, huge volume of gold had been smuggled into the country unabatedly for the last three years and about 3396 kgs of the gold has been brought into India during the period from July 2018 to March, 2019 camouflaging it with brass metal scrap. The detaining authority recorded finding that this has serious impact on the economy of the nation. Detaining authority also satisfied that the detenues have propensity to indulge in the same act of smuggling and passed the order of preventive detention, which is a preventive measure. Based on the documents and the materials placed before the detaining authority and considering the individual role of the detenues, the detaining authority satisfied itself as to the detenues’ continued propensity and their inclination to indulge in acts of smuggling in a planned manner to the detriment of the economic security of the country that there is a need to prevent the detenues from smuggling goods - The High Court erred in interfering with the satisfaction of the detaining authority and the impugned judgment cannot be sustained and is liable to be set aside.
The appeals preferred by the detenues shall stand dismissed.
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2019 (8) TMI 138
Permission for withdrawal of petition - Time limitation of Adjudication proceedings under section 13 of FEMA Act - HELD THAT:- It is the Petitioner's contention that the proceedings which are being contemplated against the Petitioner relate to issues which are over 10 to 12 years prior to the issue of the notice. Thus, causing it prejudice. We trust that the submissions made by the Petitioner would be duly considered by the Adjudicating Authority while taking a decision thereon.
Petition disposed of as withdrawn with liberty to file a further representation/reply to the impugned notice dated 15th April, 2019 within two weeks from today.
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2019 (8) TMI 137
Non-realisation of exports proceeds - guilty of contravention of Section 18(2) and 18(3) of FERA, 1973 - It was the case of the respondent that the appellants have failed to take reasonable steps to realize the export proceeds the RBI had not granted any permission to the appellants for extension of time or for writing off the same - HELD THAT:- It is noticed by the Hon’ble High Court in para-5 of the order that on perusal of the impugned orders passed by the Appellate Tribunal, it is seen that the Tribunal has not considered the Bank Certificates furnished by the petitioner, which prime facie suggest that the export proceeds have been realized by the appellants. Since the Tribunal has not considered the said Bank Certificates, in our opinion, it is just and proper to set aside the impugned orders of the Appellate Tribunal and direct the Tribunal to pass fresh order on the waiver applications filed by the appellants.
It has come on record that the export proceeds have been realized by the appellants. The documents have been filed. No contrary submissions have been made, nor evidence is produced.
Impugned order set aside - appeal allowed.
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2019 (8) TMI 136
Jurisdiction - power of Single Member Bench to decide appeals under the provisions of FERA and FEMA - appellants’ contention is that Section 52 of the FERA does not allow any Single Member to hear and decide the appeals where the order imposing a penalty exceeds ₹ 2,50,000 was a provision under the FERA, 1973 - HELD THAT:- As per Section 12 (6A) of SAFEMA, the Chairman of the Appellate Tribunal may constitute a Bench with one or two Members and a Bench so constituted may exercise and discharge the powers and functions of the Appellate Tribunal. Even the erstwhile Section 20 of FEMA (rescinded vide Finance Act 2017) had provisions to constitute Bench with one or more Members - while the Appellate Board of FERA has been dissolved with the coming into effect of FEMA on 01.06.2000, the Appellate Tribunal set up under SAFEMA will be the Appellate Tribunal for the purposes of FEMA also. The provisions under SAFEMA provide for both a Single Member Bench and a Division Bench to be constituted by the Chairman. It is a fact that the Chairman has notified in July 2018 distribution of cases/appeals to all the existing Benches including both the Single Benches of the undersigned and the Chairman functioning as a Member. As per section 2(s) of FEMA, “Member means a Member of the Appellate Tribunal and includes the Chairperson thereof”.
There is no merit in the miscellaneous petitions on the question of limitation of jurisdiction of the Single Member Bench as per the legal provisions - petition dismissed.
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2019 (8) TMI 135
Hawala transactions - Receiving payments under the instructions of persons resident outside India - contravention of Section 3(c) of FEMA, 1999 - distribution of payments under the instructions of persons resident outside India - contravention of Section 3(b) of FEMA, 1999 - imposition of penalties - relaibility on retracted statements - opportunity of cross-examination - principles of natural justice.
HELD THAT:- The appellants’ contention that they had retracted the statement is a little difficult to accept. The retraction was purportedly done by sending a letter to the Directorate of Enforcement on 15.09.2011 by Shri Shamsher Singh and 04.08.2011by Shri Dimple Thakur. In the case of Shamsher Singh it was done after 43 days from his first statement and after recording eight statements on different dates. Moreover, the appellant has given no proof that the retraction letter was actually sent since the adjudicating authority has clearly mentioned in the order that no such letters had been received - he statements of number of people taken during various points of time that they have been receiving money from Shamsher Singh various points of time on instructions from abroad cannot be brushed aside especially when the appellant has given no evidence to prove that those statements were wrong. Both the appellants’ statements as well as the appellants of at least 26 others and the CFSL report conclusively proves that there were illicit transactions.
Opportunity to cross-examine - HELD THAT:- Cross-examination is not a part of natural justice. The underlying principle of natural justice is of hearing the appellant and providing adequate opportunity to place their case before the adjudicating authority which has been fulfilled in this case - there is no reason to interfere in the impugned order on this ground.
The appellant has accepted in his statement that this money was kept as a part of hawala proceedings gets proven by their own statements, by the statements of independent 26 others, by the CFSL report, and by the contradictory affidavit all of which are on record - in a case like the present one, it is not possible or necessary to prove the culpability to the last penny.
Appeal dismissed.
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2019 (8) TMI 134
Receipt of payments under the instructions of a person resident outside India - delay in issuance of SCN - Validity of confession - HELD THAT:- The statement recorded from the appellant does not contain any admission/confession and instead contains clear denial of any involvement in the case. The issuance of the show cause notice and the findings of guilt solely basing on the discrepancy in the travel details of the appellant is unsustainable.
The appellant was in India as per pass-port details produced by the respondent. The appellant has also failed to produce his pass-port when his counsel was asked who only stated now that the same is not traceable. Therefore, presumption is that he may be the same person as alleged by the respondent - It is stated that he is a poor old man and suffering from Parkinson Diseases and showing symptoms of Alzheimer‟s Diseases. He has also loss memory. The delay in issuing the show cause notice running into ten years without any valid reason for modification of order.
The said long delay is unexplained in issuing the show cause notice. No explaination is given during the course of hearing - The customs authorities did not initiate any proceedings against the appellant after the receipt of a reply submitted by the appellant. It is also a matter of fact that the Customs as well as the Enforcement had searched his residential premises, nothing was seized therefrom.
The appeal is disposed of with the direction that the 25% of the penalty amount already deposited by order dated 31.07.2017 i.e. a sum of ₹ 5 Lakhs shall appropriated by the respondent and a full and final penalty amount in view critical condition and bad health of the appellant - appeal disposed off.
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2019 (8) TMI 133
FDI - Automatic route or not - Inward remittances made into India in the year 2008, through normal banking channels (with relevant foreign inward remittance certificates) - bidding of IPL - It is case of appellants that the appellants’ bid in respect of the ‘Rajasthan Royals’ franchise as legitimate and successful, after due scrutiny of all the information and proposed investment structure as furnished along with the bid - contravention of the provisions of Section 3(b), Section 6(2), 6(3)b & Section 42(1) of FEMA, 1999 read with Regulation 5(1) of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, Paragraph 8 of schedule of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulation, 2000, Regulation 5 of the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000 and Para 9 (1)(A) of schedule 1 to the foreign Exchange Management (Transfer or issue of Security by a person Resident outside India) Regulation, 2000 - imposition of penalties.
HELD THAT:- It is not open to the Respondent to invoke Section 42 (1) of FEMA and impose penalty on individuals on the sole basis that such individuals held the position of directors in the respective companies. It has been consistently held by the Hon’ble Supreme Court and various High Courts that specific findings are required to be recorded against any individual sought to be penalized under the deemed liability provisions such as Section 42 (1) of FEMA, particularly as to their specific role and function in the company. The mere fact that individuals are directors in a company cannot be the sole basis for imposition of penalty upon such individuals under Section 42 (1) of FEMA. Test for determination.
The present case is not a case where it can be concluded or any benefit of doubt is given to the appellants for automatic route. The present case cannot be compared with another case of sport event, as the facts and circumstances were materially different. The real thing is how the appellants as per facts have dealt with the matter at the appropriate time and how many times. From the entire facts and circumstances, it appears to this Tribunal whether it is a bona-fide or not, but violation has occurred. The appellants were trying to obtain the post-facto approval, but were not successful - Therefore, after refusal of approval for two times, the appellants cannot be allowed to take the benefit of automatic route.
In the present case, exorbitant penalty has been imposed upon the individuals arrayed herein without recording any findings on the specific roles of the said individuals. It is also important to highlight that judicial precedents clearly establish that the onus of proving the role of an individual and specifically proving that the said person was in day to day management of the affairs of the company is that of the Respondent Department. It is evident from a perusal of the Impugned Order that the Respondent has completely failed to discharge the said burden of proof. Provisions of Section 42(1) of FEMA have been simply reproduced in the Impugned Order to justify the imposition of penalty - The Supreme Court and various High Courts have consistently held that merely repeating the golden words of the section is not sufficient to create liabilities under the section. It is something more has to be brought on record to show that the person was in-charge and responsible to the functioning of the company and noticee officers have some motive and involved in the abetment for the purpose of benefit from the transaction, in question, by themselves or for the benefit of the company directly or indirectly while imposing the penalties. Similarly, the conduct of good faith, honesty and mens rea cannot be excluded from consideration while quantum of imposing penalties.
In light of the parameters clearly laid down by the Hon’ble Supreme Court and various High Courts regarding the standard and burden of proof required to be discharged for invocation of deemed liability under Section 42 (1) of FEMA, the imposition of penalty on all the individuals arrayed herein is liable to be set aside on account of non-compliance with the said established parameters.
It is evident that the parameters for imposition of penalty in the present quasi criminal proceedings initiated against the Appellants under FEMA have not been complied with by the Respondent while imposing the exorbitant penalty of INR 98.35 Crores vide the Impugned Order - there are contraventions happened due to bona fide or not by the appellants and it is also settled law that the plea of mens rea cannot be accepted if contraventions have happened as it is not a valid ground to ignore the offence of committed. Still there are cases where one can conclude the said contraventions are ex facie technical and venial in nature.
As far as the imposition of penalty is concerned, the appellants have already deposited a sum of ₹ 15 crores with the respondent as consolidated amount on behalf of all the appellants as a pre-deposit - Considering the overall facts and circumstances, the appeals are partly allowed by modifying the order by holding that penalties already deposited by the appellants is reasonable and the same be treated as penalties imposed in the present set of appeals.
Appeal disposed off.
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2019 (8) TMI 132
Imposition of penalties - alleged violation of Section 8(1) of FERA - main case of the Appellants is that the respondent has planted the unsigned plain paper purported fax message being Page 31 of File marked – ‘D’ out of 2425 seized documents from the Delhi office of the Appellant No. 1 on March 13, 1995, which was inadmissible in evidence under the law - HELD THAT:- In the impugned judgement dated 20.05.2005 passed by the Special Director of Enforcement, the Special Director erroneously shifted the initial burden of proof from the Directorate to the Appellants under Section 71 of the FERA, 1973 - Further records reveal that the statements of Mr. Rajesh Verma has also been not relied upon in the SCN. As such, the provisions of Sections 71 and 72 of FERA 1973 are not attracted and cannot be invoked.
The Special Director had also erroneously presumed the facts without proper authentication and corroboration from independent witnesses under Section 72 of the FERA, 1973, the charges against the Appellant No. 1 have not been proved as the respondent has failed to discharge its burden. The Appellant Nos. 2 to 4, the Directors herein as such are not liable under Section 68 of FERA 1973.
The orders and/or directions for production of the said file and inspection of the said original Fax message and the arrest memo of Mr. Rajneesh Verma by the Respondent became final and absolute and non-production thereof by the Respondent led to Adverse Inference being drawn under the Illustration (g) of Section 114 of the Indian Evidence Act, 1872 against the respondent even as per settled law - the impugned order dated 20th May, 2005 passed by the Special Director, Enforcement Directorate, New Delhi is not sustainable - appeal allowed.
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2019 (7) TMI 1878
Proceedings under FEMA - effect of the adjudication order made during the pendency of the writ appeals - ad-interim relief - Merely because the adjudicating authority has passed an order during the pendency of the writ appeals, it cannot be said that the writ appeals have become infructuous - whether writ appeals should be entertained? - HELD THAT:- As appellants were fully aware about the date fixed for hearing before the adjudicating authority. There is a default on the part of the appellants as they did not appear before the adjudicating authority and they did not move this Court for grant of appropriate interim relief. Knowing fully well that the adjudicating authority is proceeding with the hearing, the appellants took no steps and allowed the adjudicating authority to pass an order. It is not as if immediately after the impugned order was passed, that the adjudicating authority fixed the matter for hearing. The date for hearing was fixed nearly one year after the present appeals were filed.
As observed earlier, one of the arguments canvassed on behalf of the respondents that the appeals have become infructuous, cannot be accepted. However, these appeals are continuation of writ proceedings before the learned Single Judge under Article 226 of the Constitution of India. A remedy under Article 226 of the Constitution of India is always discretionary and equitable. The impugned order of the learned Single Judge was passed on 6th October 2017. The present appeals were pending from 17th November 2017. The adjudicating authority granted enough time to the appellants to seek interim relief in these appeals. The hearing was fixed one year after the impugned order of the learned Single Judge.
The appellants took the risk of not attending before the adjudicating authority knowing fully well that the appellants were not armed with any ad-interim order of stay of this Court. Thus, due to their own conduct, the appellants allowed the adjudicating authority to pass orders of adjudication. It is not the case of the appellants that they did not receive legal advice. They are represented by Senior Advocates.
As pointed out earlier, an efficacious remedy of filing an appeal under Section 19(1) of FEMA is available to the appellants. It cannot be said that the remedy is not efficacious as there is a power vested in the appellate Tribunal to waive the requirement of the deposit of the penalty. Moreover, all contentions which are raised in the appeals can be gone into by the appellate authority.
The issues raised by the appellants have not been finally concluded and notwithstanding the observations made by the learned Single Judge, all issues remain open which can be agitated by the appellants in the statutory appeals. It is for the reasons which are recorded above that we are not inclined to entertain the writ appeals and interfere with the proceedings under FEMA. Accordingly, appeals and also pending interlocutory applications are dismissed.
We direct that the ad-interim order in terms of paragraph 5 of the order dated 28th March 2019 will continue to operate for a period of one month from today.
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2019 (6) TMI 1027
Offence under FEMA - unauthorized dealing of foreign exchange - recovery of US $ 3,30,400 at Aizwal Airport on 27.10.2006 from a person by name Shri Thlabik and subsequent recording of statement of Shri Thlabik, who had taken the name of the appellant in his statement - HELD THAT:- From the record, it is evident that there is no clear and cogent evidence against the appellant that he had been dealing in illegal foreign exchange trade or if he had dealt with foreign exchange without the permission of the RBI. No doubt, there are allegation against him that he had received a sum of ₹ 35,00,000/- (Rupee Thirty five lakhs only) from Shri Thlabik (the amount recovered at the time of search of the premises). His case is that it was the money representing the payment was owned by two purchasers of Jewellery at Mizoram. It is not in dispute that the department has allowed him to cross examination of main witness (accused) Shri Thlabik, however, the said witness was not produced for the said purpose. When verified, it was informed that he was absconding, therefore, could not be produced for cross-examination.
In the present case, the main accused as per respondent is Thlabik who is absconding. It was the duty of the respondent to trace him out. Despite of prayer of the appellant for cross-examination allowed, the witness was not produced for cross examination. Thus, merely on the basis of presumption, the inference can be drawn against the appellant without clinching evidence.
The benefit of doubt under these circumstances goes in his favour. The submission of the respondent does not help the case in view of peculiar facts and circumstances of the matter.
In the light of the above, the appeal is allowed. The impugned order against the appellant is set aside.
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2019 (6) TMI 964
Stay of demand - waiver of pre-deposit - Tribunal dismissing the appeals for non-prosecution - HELD THAT:- The appeals filed before the Tribunal could not have been dismissed for non-prosecution. Yet, we may point out that the conduct of the appellants in not appearing for several hearings also cannot be appreciated. We have to necessarily interfere with the common order passed by the Tribunal dated 14-9-2018, which was communicated to the appellants on 25-9-2018.
So far as the conditional order passed by the Tribunal is concerned, considering the financial position pleaded by the appellants and their case that they are unable to realize export production in spite of their diligent efforts, we are of the considered view that the appellants have made out a prima facie case. However, this observation is made only for the purpose of imposing a condition on the appellants, so that the appeals before the Tribunal can be heard and disposed of on merits.
Accordingly, CMA disposed of by slightly modifying the common order passed by the Tribunal by directing the appellants to deposit with the first respondent namely the Special Director, Enforcement Directorate, Government of India, 50% each of the penalty amounts imposed individually and furnish a bond for the balance 50% each and keep the bond alive till the appeals are heard and disposed of on merits by the Tribunal. No costs. Consequently, the connected CMPs are closed.
The common order passed by the Tribunal dismissing the appeals for non-prosecution are set aside and the appeals are restored to the file of the Tribunal. The appellants are granted eight weeks’ time from the date of receipt of a copy of this judgment to deposit 50% each as directed above. Subject to the deposit of 50% each by the appellants within the time prescribed, the Tribunal shall fix a date for hearing of the appeals and pass orders on merits
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