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FEMA - Case Laws
Showing 441 to 460 of 1378 Records
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2014 (12) TMI 1190
Waiver of pre-deposit - Proceedings under FEMA - Difference of opinion between the members of the tribunal - Scope of the reference made in case of difference of opinion of two Hon’ble members under Section 31 of FEMA, 1999 - Held that:- It is not open for the Chairperson/third member to re-write the judgment/order, according to his understanding. He can not disagree with the findings of both the Hon’ble Members but has to agree with one of the findings which appear to him to may be more logical and correct.
At the stage of passing interim order there is no scope of expressing final opinion in the matter. By expressing final opinion, the views once taken at the preliminary or early stage can not be changed at the time of final adjudication on merits conveniently. Therefore, the :observations made in Paragraphs 35 and 36 of the judgment by Dr. S.D.Singh, Hon’ble Member, through which conclusive opinion touching the merits appears to have been expressed is against the propriety and settled legal position of law on this point.
I am in agreement with the views expressed in the order of Hon’ble Member Dr. H.K. Mudgil in his order dated 4-8-2014 with regard to Paragraphs 35 to 37 of the order of the Hon’ble Member Dr. S.D. Singh. In the light of my agreement the same shall be treated to be the majority opinion of the Tribunal including those who first heard it. - imposition of condition of depositing 40% and furnishing bank guarantee for 60% will adequately safeguard the interest of the revenue.
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2014 (11) TMI 1140
Interest on refund - grievance of the petitioner is that although the amount has been refunded to the petitioner, he has not received interest on the demand drafts for a sum of ₹ 1.70 crores, which were seized by respondent No.1 on 19.05.2001 - Held that:- In the event income tax has been deducted at source in respect of interest on a sum of ₹ 1.70 crores, it is obvious that the interest would have been credited to the account of the petitioner. In the circumstances, the petitioner would, indisputably, be entitled to interest on the amount refunded.
The amount that was seized from the petitioner has since been returned and, undisputedly, the respondents cannot profit from seizure of the amount in question. Mr Sanjay Jain, learned Additional Solicitor General who appears for respondent No.1 states that in the event any interest was earned and/or had accrued on the amount of ₹ 1.70 crores which was seized, the same would be paid to the petitioner.
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2014 (10) TMI 885
Condonation of delay - Held that:- From the perusal of the Impugned Orders that proceedings were held ex parte. The show cause notices were served by affixation. The cause for delay in instituting the appeal after a gap of more than seven years appears to us to be sufficient and convincing. There is no proof on record that the show cause notices or the Adjudication Orders were duly served upon the applicants/appellants. The delay condonation applications are supported by uncontroverted affidavits. In this view of the matter, the applications deserve to be allowed.
Consequently, the applications in all the appeals noted herein above are allowed and the delay in filing the instant appeals is condoned. Registry is directed to register the appeals and list the appeals on 17-12-2014.
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2014 (10) TMI 527
Revocation of appellant's Passport - penalty on the appellant under Section 13 of FEMA for having contravened the provisions of Section 37 of FEMA read with Section 131(1) and 272A(1) of the Income-tax Act, 1961. - Held that:- officers under the Income-tax Act have the same powers as are vested in a court under the Code of Civil Procedure, 1908 to try a suit in respect of inter alia discovery and inspection, enforcing the attendance of any person, including any officer of a bank / company and examining him on oath and compelling the production of books of accounts and other documents.
Because the appellant had not appeared before the Assistant Director, Directorate of Enforcement pursuant to the said summonses, the said Assistant Director had filed a complaint under Section 16(3) of FEMA on 16.09.2010. That complaint has led to a show cause notice being issued by the Directorate of Enforcement on 20.09.2010 and adjudication in respect thereof is pending. So, this much is clear that the written complaint under Section 16(3) of FEMA with regard to the appellant's non-compliance with the summonses is pending before the Adjudicating Authority under FEMA. A show cause notice was also issued by the Adjudicating Authority on 20.09.2010 wherein the appellant was required to appear in person or through legal practitioner / chartered accountant duly authorised by the appellant. This was in consonance with the stipulation contained in Section 16(4) of FEMA which clearly enables the person against whom the complaint has been made to appear either in person or take the assistance of a legal practitioner or a chartered accountant of his choice for presenting his case before the Adjudicating Authority.
On the basis of the material available on record, the complaint under Section 16(3) of FEMA which was registered on 16.09.2010 has been followed by a show cause notice dated 20.09.2010 which essentially requires the appellant to show cause as to why an inquiry should not be held. The matter has not progressed beyond that stage. In fact, nothing has been brought to our notice to indicate that the Adjudicating Authority has formed any opinion that an inquiry should be held and that an inquiry has in fact been held. In any event, it is an admitted position that no adjudication order imposing a penalty pursuant to the complaint dated 16.09.2010 has been passed by the Adjudicating Authority under FEMA as yet.
Revocation of the appellant's passport was based on the letter dated 04.10.2010 received by the Regional Passport Officer from the Directorate of Enforcement to the effect that a complaint dated 16.09.2010 under Section 13 of FEMA had been filed against the appellant and that a show cause notice had been issued against the appellant by the Directorate of Enforcement on 20.09.2010 for non-compliance of summonses issued by them. We may recall that complaint dated 16.09.2010 which had been filed under Section16(3) of FEMA.
At the time the revocation order was passed, the appellant was already abroad in the U.K. The direct consequence of the revocation order was that the appellant could not travel to any country outside of the U.K. He could not attend any conferences or meetings in any other country where he could have expressed his views on cricket or on the organization and administration of cricket. To that extent it can be said that the 'direct and inevitable' consequence of the revocation order was to impinge upon his freedom of speech and expression. Now, this could be legitimate if the revocation order could be said to be in the interests of the general public, of course, limited to the interests of 'public order, decency or morality'. The alleged infraction on the part of the appellant could hardly be stated to fall foul of 'public order, decency or morality'. Therefore, in our view, the revocation order was invalid.
The "public interest" allegedly involved, as evident from the appellate order dated 31.10.2011, was that cricket was the most popular sport in India and a huge public sentiment was attached to it and, therefore, it was in 'public interest' that the case against the appellant was properly investigated for which the "interrogation" of the appellant was considered necessary. This kind of 'public interest' does not fall in the categories of "public order, decency or morality" and, therefore, cannot be used as a shield against invalidity which would naturally follow on account of a restriction on the freedom of speech and expression.
Therefore, the observations of the authorities below with regard to the allegations of FEMA violations against the appellant ought to be disregarded in the context of the revocation order. But, the matter does not end here because, in our view, these allegations had an impact on the decision making process of the Regional Passport Officer as well as the Chief Passport Officer inasmuch as they have both referred to the allegations to indicate that it was in 'public interest' that the passport of the appellant be revoked. In other words, the authorities under the Passports Act, while revoking the passport of the appellant, examined and were influenced by materials which were not relevant or germane and were not specified in the show cause notice dated 15.10.2010. The only 'subject-matter' of the show cause notice was the 'non-compliance of summons' issued by the Directorate of Enforcement, Mumbai.
Since there is a specific procedure and there are specific statutory provisions for any default in non-compliance with summonses under FEMA itself read with relevant provisions of the Income-tax Act and the CPC, the revocation of the appellant's passport for that so-called default (which is yet to be adjudicated upon), on the ground that it was in the interests of the general public, was not lawful - Court set aside the impugned judgment dated 16.01.2013 and, consequently, the orders dated 31.10.2011 and 03.03.2011 passed by the respondent Nos.2 and 3. As a result, the revocation of the appellant's passport is set aside and the passport stands restored. - Decided in favour of appellant.
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2014 (10) TMI 404
Contravention of Sections 9 (1) (b), 9 (1) (c) and 9 (1) (d) read with Section 64 (2) of the Foreign Exchange Regulations Act, 1973 - Remission of amount from abroad - Held that:- ED itself is not clear whether the declaration made by Mr. Sri Chawla in Bangkok could be termed as a statement under Section 40 of FERA. It is not shown that the procedure envisaged under FERA was followed while recording the said declaration. In any event, Mr. Sri Chawla only talks of payment being made to two persons who met him on behalf of Mr. Rakesh Jain. The payment is purportedly made for the purchase of land. The sale deeds show that the purchaser was OEPL and the seller was ACPL. The said statement, therefore, does not help in proceeding only against Mr. Rakesh Jain, if no proceedings had been initiated against ACPL, which is the true beneficiary. While the declaration of Mr. Sri Chawla may, more or less, corroborate the statement of Mr. Rakesh Jain as regards the total amount paid, the statement of Mr. Madan does not corroborate either statement.
AT has relied on material that was not part of the record of the case. In particular, while the AO correctly notes that the Investigation Officer had not conducted any inquiry to ascertain the fair price and has also taken note of the order of the CIT and on that basis held that the SCN is not supported by proper evidence, the AT appears to have not referred to the proceedings under the Income Tax Act, 1961 at all. The conclusion of the AT that there was payment over and above the sale consideration shown in the sale deed, appears to be based on the AT taking 'judicial notice' of the price of agricultural land in the vicinity of Gurgaon on the basis that it is an 'adjacent area'. No such plea was advanced by any of the parties before the AT. The Appellants are, therefore, justified in their criticism of the impugned order of the AT for travelling well beyond the scope of its revisional jurisdiction and adjudicating upon factual matters for which there was no basis in the record.
The Court is unable to sustain the impugned order dated 3rd June 2008 of the AT and restores the AO dated 6th January 2000. The appeals are accordingly allowed, but in the circumstances, with no order as to costs. The amounts deposited by the Appellants shall be refunded to them within a period of eight weeks in accordance with law - Decided in favour of assessee.
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2014 (10) TMI 367
Violation of Section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 - Confiscation of seized amount - Imposition of penalty - Appellate Board set aside confiscation and ordered refund of penalty whereas High Court upheld the same - Held that:- There is no doubt whatsoever, that no reliance has been placed on the alleged statement made by the appellant on 20.4.1989 before the officers of the Enforcement Directorate, in the memorandum dated 12.3.1990. Per se, therefore, it was not open to the authorities to place reliance on the aforesaid statement, while proceeding to take penal action against the appellant, in furtherance of the aforesaid memorandum dated 12.3.1990. The mere fact that he was not proceeded against, prima facie establishes, in the absence of any evidence to the contrary, that the assertion made by the appellant to the effect that he never made such statement, had remained unrefuted.
Even though the aforesaid excuse may have been valid, if the allegation was, that the record of the statement made on 20.4.1989, was not available with the officers of Enforcement Department at the time of the raid on 25.10.1989, yet to state that the aforesaid record was not available when the second statement was made on 26.10.1989 at the office of the Enforcement Directorate, is quite ununderstandable. It is pertinent to mention, that the second statement was recorded by the Chief Enforcement Officer when the appellant – A. - in the absence of having established through cogent evidence, that the appellant had made the above statement dated 20.4.1989, it was not open to the Enforcement Directorate to place reliance on the same, for establishing the charges levelled against the appellant in memorandum dated 12.3.1990.
Had the statements of the appellant and his wife been corroborated by independent evidence of the nature indicated hereinabove, there could have been room for accepting the veracity of the statements made by the appellant – A. Tajudeen and his wife T. Sahira Banu to the officers of the Enforcement Directorate. Unfortunately, no effort was made by the Enforcement Directorate to gather any independent evidence to establish the veracity of the allegations levelled against the appellant, through the memorandum dated 12.3.1990. We are of the considered view, that the officers of the Enforcement Directorate were seriously negligent in gathering independent evidence of a corroborative nature. We have therefore no hesitation in concluding that the retracted statements made by the appellant and his wife could not constitute the exclusive basis to determine the culpability of the appellant.
Charge against the appellant under Section 9(1)(b) of the 1973 Act, cannot be established on the basis of newspaper sheets, in which the money was wrapped. The newspaper sheets relied upon, would not establish that the amount recovered from the residence of the appellant – A. Tajudeen was dispatched by Abdul Hameed from Singapore, through a person who was not an authorized dealer. - impugned judgment passed by the High Court deserves to be set aside. The same is accordingly hereby set aside. Resultantly, the entire action taken by the Enforcement Directorate against the appellant in furtherance of the memorandum dated 12.3.1990, is also set aside. As a consequence of the above, the Enforcement Directorate is directed to forthwith refund the confiscated sum of ₹ 8,24,900/-, to the appellant, as also, to return the amount of ₹ 1,00,000/-, which was deposited by the appellant as penalty - Decided in favour of appellant.
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2014 (9) TMI 1184
Offence u/s 18(2) and Section 18(3) of FERA - deliberate attempt to refrain from realising the export proceeds - imposing of penalty on the company, i.e., ('COPL') and on the individual Directors for contravention of Section 18(2) and Section 18(3) FERA - show cause why the proceedings u/s 51 FERA should not be initiated against them - HELD THAT:- The scheme of MMTC was to encourage the smaller exporters, who, on their own strength, would have normally been unable to procure orders from abroad for export of jewellery. It is difficult, therefore, to equate the exporters working as 100% EOU in the premises given on lease to the MMTC with other exporters who may be operating on a larger scale and who may have wherewithal to take more effective steps for realisation of export proceeds. The key issue here is about the sincerity of the efforts made by COPL to realise the proceeds. What Section 18(2) FERA expects is that there should be no deliberate attempt to refrain from realising the export proceeds.
The AO of DD itself notices that the Appellants made sincere efforts to realise at least part of the outstanding amount. In the circumstances, it is not possible to concur with the conclusion reached by the DD in the AO that there has been a contravention by the Appellants of Section 18(2) and Section 18(3) FERA. The AT also does not appear to have examined the documents placed on record by the Appellants to show the efforts made by them to realise the export proceeds. Consequently, this Court sets aside the impugned order of the AT dated 13th March 2008 and the order of the DD, ED dated 25th February 2008 and allows these appeals. The amounts deposited by the Appellants pursuant to the AO and the impugned order of the AT shall be refunded to them within a period of four weeks in accordance with law.
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2014 (9) TMI 1085
Guilty of the offence under Sections 6(4), 6(5) 8(1), 9(1)(a) and 9(1)(f)(i) of Foreign Exchange Regulation Act, 1973 - fine imposed - Held that:- In the first place, it is not clear why, after recording the statements under Section 40 of FERA of the appellant and Mr. Mendiratta in May 1995, the ED waited till the last date of the sunset period, i.e., 30th May, 2002 for issuing the Memorandum. The second feature is that the only relied upon documents in the Memorandum are the statements made by the appellant and Mr. Mendiratta, the letter dated 7th August, 1995 of Mr. Sethi and the statement of account provided by the AMEX Bank. In other words, the ED does not appear to have undertaken any further investigation in the seven years since it recorded the statements. In particular, there was no attempt made to undertake investigation outside India to find out the names of the persons who had made remittances into the NRE Account of Mr. Sethi.
The Court is of the view that the AO dated 24th March, 2004, and the impugned order of the AT to the extent they hold the appellant liable for contravention of Section 8(1) of FERA, cannot be sustained in law.
As regards contravention of Section 9(1)(a) and Section 9(1)(f)(i), the Court is unable to appreciate how the said provisions are at all attracted in the facts and circumstances of the case. The said provisions require a person resident in India having to make “any payment for the credit of any person outside India.” The beneficiary under both the provisions is a person resident outside India. The allegations in the Memorandum do not make out any such case even prima facie. It is not the case of the ED that Mr. Sethi, who in the facts and circumstances was the only person resident outside India, was the beneficiary of any of the transactions in his NRE account. Consequently, the impugned order cannot be sustained even as regards the question of contravention of Section 9(1) of FERA.
Thus AO dated 24th March, 2004 and the impugned order dated 24th December, 2010 of the AT are hereby set aside. Any amount deposited by the appellant pursuant to the AO shall be refunded to him in accordance with law within a period of eight weeks from today
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2014 (8) TMI 1105
Complaint filed under Section 16(3) FEMA - Writ of mandamus to forbear the respondent from proceeding further with the adjudication in pursuance of a show cause notice, without complying with a particular Rule - Held that:- The scheme of Section 4 actually provides opportunities at the every stage to the noticee. The forming of an opinion at the stage of show cause notice and receipt of reply, as provided in sub-rule (3) of Rule 4, is almost akin to the forming of an opinion by a disciplinary authority to hold or not an enquiry, upon receipt of a reply to a charge memo in a disciplinary proceeding. Therefore, do not think that there is any scope for expanding Rule 4(3) to mean that the forming of the opinion as required in Rule 4(3) has to be reflected by an order in writing containing reasons.
Be that as it may, the petitioner had allowed several things to pass, before he came up with the above writ petition. When the petitioner came up with the above writ petition, the stage of Rule 4(3) had already been passed. The enquiry had actually come, at the time when the petitioner moved this Court, to the stage of Rule 4(8). Therefore, it is not possible now to put the clock back or rewind the proceedings back to the stage of Rule 4(3).
After all, the requirement of Rule 4(3) even if the interpretation given by the Division Bench of the Bombay High Court [2013 (8) TMI 435 - BOMBAY HIGH COURT] is taken to be correct, should be seen only as part of the principles of natural justice. Since the petitioner had crossed the stage of Rule 4(3) and the entire enquiry is now over and orders reserved, the petitioner should be taken to have waived the requirement.
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2014 (8) TMI 1017
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.
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2014 (8) TMI 607
Contravention of Section 8 (3) read with Section 8 (4) and Section 68 of the Foreign Exchange Regulation Act, 1973 - Penalty upon Director of company - Appellant states that he was a part time, non-executive director of MXL but neither in-charge of nor responsible for the conduct of its day-to-day affairs. MXL commenced its business in the year 1983-84 and had been importing goods/raw materials for its business requirements. MXL was amalgamated with Xerox Modicorp Limited (“XML”) in the year 2000 - Held that:- Appellant gave a separate reply on 9th April 2001 to the SCN dated 19th February 2001 which has not been discussed in the AO. In other words the DD did not advert to specific defence of the Appellant that at the relevant time he was not a director in-charge of or responsible to the company for the conduct of its day-to-day affairs. The AT too does not appear to have noticed the above decisions of the Supreme Court and has mechanically concluded that since there was no restriction on the exercise of powers by the Appellant in relation to the transactions in question, he should be held liable. In light of the reply dated 9th April 2001 sent by the Appellant it was possible to discern the distinction between those directors who were in-charge of the day-to-day affairs of the company and those were not. The explanation offered by the Appellant is that the Company Secretary of XML placed before the Board of Directors of MXL compliance certificates at every meeting held during the relevant period, which led the directors, including the Appellant, to believe that there were no contravention of any of the statutory provisions, appears to be a plausible one. This explanation has not been considered either by the DD or the AT
Appellant on his part discharged the burden in terms of Section 68 (2) of the FERA and was entitled to the benefit of doubt. - Court sets aside the impugned order dated 26th March 2008 of the AT and the impugned AO dated 31st March 2004 of the DD insofar as the Appellant is concerned and exonerates the charge of contravention of Section 8 (3) read with Section 8 (4) and Section 68 of the FERA. - Decided in favour of appellant.
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2014 (7) TMI 1371
Execution of decrees passed by Courts in reciprocating territory - maintainability of the present lis before the High Court of Delhi - presentation of a petition seeking execution of a decree of a superior Court of any reciprocating territory before a ‘District Court’ - Whether the decree passed by a superior court of a reciprocating territory can be executed by the High Court of Delhi in exercise of its original jurisdiction in terms of Section 44A(1 )of the Code of Civil Procedure, 1908 ? - HELD THAT:- As legislature has consciously in its wisdom chosen not to infuse the conception of ‘competent jurisdiction’ in Section 44A of the Code of Civil Procedure, 1908 in contra-distinction to Section 39 which provides the mechanism for execution of ‘domestic decrees’. The requirements saddled on the executing court under the scheme of Section 39 are alien to the ‘District Court‟; the jurisdiction of which may be invoked by the holder of a foreign decree in terms of Section 44A. Rather it may be pertinently observed that the legislature has vested such ‘District Court’ the power to execute the ‘foreign decree’ as if it had been passed by itself. The conception of ‘competence of jurisdiction’ of executing court contained in Section 39 being wholly absent in the language employed by the legislature in Section 44A of the Code, the same cannot be circuitously injected by this Court as the same would tantamount to legislative re-writing, which is impermissible.
The authoritative observations in M.V. Al. Quamar’s case [2000 (8) TMI 1124 - SUPREME COURT] unequivocally evince that the jurisdiction of the ‘District Court’ in terms of Section 44A of the Code of Civil Procedure, 1908 can be invoked by a holder of a decree of a Superior Court of reciprocating territory, unhindered by the lack of jurisdictional competence of the said Court while dealing with the execution of ‘domestic decrees
For the reasons extensively highlighted by us we are of the considered view that the High Court of Delhi not being a ‘District Court’ in terms of Section 44A of the Code of Civil Procedure, 1908 is not vested with the jurisdiction to entertain the present Execution Petition. In view thereof, the same is liable to be transferred to the ‘Court of District Judge‟ within whose jurisdiction the property sought to be attached is situated for being dealt with in accordance with law.
The appeal is allowed. The impugned order dated November 29, 2013 is set aside in so far it is held that the Delhi High Court would be the ‘District Court’ to execute the foreign decree. Needless to state decision on the objections on merits is also set aside being without jurisdiction. The executing Court shall decide the objections uninfluenced by any observation made by the learned Single Judge on merits. The Execution Applications filed by the appellants are restored save and except the application which challenged the jurisdiction of this Court, which application is allowed.
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2014 (7) TMI 1368
Violation of FEMA - Imposition of Penalty - Definition of Person u/s 2(u) - penalty was imposed on the President of the Board of Control for Cricket in India for the violation of the Act - Matter remanded back with direction to Special Director, Directorate of Enforcement first to form his opinion, after recording reasons, whether to proceed against the petitioner with regard to the impugned 11 show cause notices - HELD THAT:- Special leave petition is dismissed.
Any observation made in the impugned order in regard to the merit of the case shall have no bearing at the later stage of the proceedings.
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2014 (7) TMI 1291
Application for compounding of an admitted contravention of the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004, 2004 Regulation - unconditional payment - HELD THAT:- It is necessary, before we direct a consideration of its request, that the petitioner should forward a demand draft to the compounding authority no later than within a period of two weeks from the receipt of a certified copy of this order, of the entire amount as directed to be paid in the order dated 23 December 2013, together with interest at the rate of 12 percent per annum from the expiry of a period of fifteen days from the date of the order dated 23 December 2013 until the date of payment. Subject to the petitioner forwarding a demand draft in these terms to the compounding authority, we permit the petitioner to make a formal request in that regard for the unconditional payment of the aforesaid amount. The compounding authority may, having due regard to the object and purpose of the compounding provisions and to the pendency of these proceedings before this Court since March 2014, take an appropriate view on the application, in accordance with law.
The demand draft which is to be forwarded by the petitioner to the compounding authority shall abide by the final decision of the compounding authority on the application of the petitioner.
We have not interfered with the order of compounding. The orders passed by the Chief General Manager of the Reserve Bank and the communications dated 9 April 2014 and 22 May 2014 are lawful and do not suffer from any illegality.
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2014 (7) TMI 1151
Rejection of application seeking compounding of offence punishable under Section 23(1) read with 4(1) of Foreign Contribution Regulation Act, 2010 - Held that:- a perusal of the impugned order shows that no reason for declining the application for compounding has been given and he has no objection if the matter is remanded back to the competent authority on this issue. - in view of the principle of audi-alterem partem, the CBI could not have been heard at the back of the Petitioner and thus he has no objection if the matter is remanded back for re-hearing in the presence of the Petitioner. - Impugned order is set aside - Petition disposed of.
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2014 (7) TMI 727
Condonation of delay - delay of 179 days - it is submitted that, collective decision was required to be taken in the government departments at various levels, therefore, valuable time was consumed - Held that:- under Section 35 of FEMA, appeal against the decision or order of the Appellate Tribunal would lie before the High Court provided the appeal is filed within a period of 60 days, extendable by a further period not exceeding 60 days if the High Court is satisfied that sufficient cause prevented the filing of the appeal within the prescribed period. To put it simply, any appeal filed before the High Court under Section 35 of FEMA beyond 120 days would be time barred.
Interpreting similar provisions contained in the Central Excise Act, 1944, the Apex Court in the case of M/s. Singh Enterprises v CCE [2007 (12) TMI 11 - SUPREME COURT] held that where the statute bars appeal beyond sixty days, the Court cannot condone the delay and entertain the appeal filed beyond sixty days. - application for condonation of delay dismissed - decided against the revenue.
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2014 (6) TMI 577
Hawala transactions - Partial explanation of payment made through hawala channels - During investigation appellant invoked right against self incrimination under Article 20(3) - Imposition of penalty - Held that:- Impugned AO of the SD, ED and the impugned order of the AT proceeded on the basis that the Appellant could not have validly invoked the right against self-incrimination under Article 20 (3) of the Constitution since he was not accused in any criminal proceeding initiated under FERA at the time his statement was recorded under Section 40 FERA. Both orders further proceeded to draw an adverse inference as regards his refusal to explain the entries found with the seized diaries - It is seen that the FIR of the CBI dated 4th March 1995 mentioned the provisions of both the PCA as well as FERA. At that stage the proceedings under FERA were yet to commence. It was noted in the FIR that the Superintendent of Police had sent to the ED a report for filing a statutory complaint under FERA. It is, therefore, clear that at the time when the statements of Mr. S.K. Jain and Mr. J.K. Jain were initially recorded, i.e., in April 1995 no proceedings under FERA had commenced.
The second factor to be noted is that it is only at the stage of filing of the charge sheets by CBI on 16th and 23rd January 1996 that it became clear that the cases filed by the CBI did not govern the violations of FERA. Therefore, till that date the two noticees, Mr. J.K. Jain and Mr. S.K. Jain were justifiably advised that they could invoke their right under Article 20 (3) of the Constitution so as to not incriminate themselves while making their statements under Section 40 FERA.
For the purpose of FERA, the noticee can, to the extent that he is required by the ED officers to give answers that might tend to incriminate him in the criminal proceedings under FERA, decline to do so. The resultant position as far as the present case is concerned is that on the dates of their examination in April 1995 the Appellant and Mr. J.K. Jain were 'accused' in terms of the FIR registered by the CBI and this continued till the filing of chargesheets by the CBI in January 1996. Therefore, the two noticees were entitled to invoke their right against self-incrimination under the Article 20 (3) of the Constitution. No adverse inference could be drawn against them for having exercised that right. Even thereafter, since admittedly criminal proceedings were also launched against the noticees under Section 56 FERA, they continued to be 'accused'. Their refusal to explain the entries could not lead to an adverse inference being drawn against them.
This is not a case where a confession was initially made under Section 40 FERA which thereafter was retracted. Here the noticee either declined to answer or gave an answer which did not help the ED since he claimed that had no knowledge of the entries in the diaries. Mr. Panda sought to contend that the said answers should be construed as either false or misleading or both. The Appellant said that he was unable to explain the entries because they were not written by him. The latter part of the answer was a fact since the entries were admittedly made by Mr. J.K. Jain. While Mr. J.K. Jain claimed that he did so on the instructions of Mr. S.K. Jain, the AO itself noted that there was no evidence whatsoever to show involvement of Mr. J.K. Jain in the transactions of foreign exchange. The Supreme Court has in the V.C. Shukla case held that the so- called 'admissions' in relation to the entries by Mr. J.K. Jain in his statement under Section 40 FERA cannot be used against Mr. L.K. Advani or Mr. V.C. Shukla. It was, however, clarified that they could be proved against the Jains as admissions under Section 18 read with Section 21 IEA provided they relate to 'any fact in issue or relevant fact.' The initial burden of proving that the entries related to 'any fact in issue or relevant fact' was on the ED. - The penalty amount deposited by the Appellant pursuant to the impugned orders of the SD and AT will be refunded to him in accordance with law within a period of eight weeks - order set aside - Decided in favour of appellant.
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2014 (5) TMI 1192
Jurisdiction to issue notice under Section 51 of FERA 1973 - HELD THAT:- This Court, upon perusal of the paper book, is prima facie of the view that as the impugned order is only a show cause notice and that too of the year 2003, the ends of justice would be met if the petitioners are given liberty to raise the issue of jurisdiction at the preliminary stage before the adjudicating authority itself.
The adjudicating authority is directed to decide the aforesaid preliminary issue. All rights and contentions of both the parties including the issue of delay and laches are left open.
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2014 (5) TMI 863
Contravention of Section 9 (1) (d) of Foreign Exchange Regulation Act, 1973 - Payment made on behalf of foreign national without prior approval of RBI - Held that:- There can be no doubt that a retracted statement under Section 40 FERA, cannot form the sole basis for determining whether the maker of such a statement is guilty of contravening any of the provisions of FERA. It shall have to be corroborated by other independent evidence. In determining whether such a retracted statement can be relied upon, it will have to be examined whether the statement could be said to have been made voluntarily.
Statement made by Mr. Saluja contains a wealth of details on the transactions undertaken by him at the behest of either his brother Dr. R.S Saluja or others. He has explained in minute detail the entries in the loose sheets. The details on every page of the loose sheets could not have been explained by anyone other than one fully conversant with the transactions. It is impossible for such details to have been fabricated by the officials of the ED. There is nothing credible brought on record by Mr. Saluja to persuade the Court to conclude Mr. Saluja was under threat, duress or any form of coercion that at the time when he made the statement and that he did not make it voluntarily.
The entries/notings in the loose sheets recovered from his residence as explained by Mr. Saluja in his statement under Section 40 FERA fully substantiated the case of the ED that he had involved himself in transactions in violation of the FERA. Further corroboration was from the details of the STD calls exchanged between Mr. Saluja, Mr. Kedia and Mr. Shah. The fact that the foreign exchange may not have been recovered from the residence of Mr. Saluja does not weaken the case of the ED. According to the ED, the Indian currency paid to Mr. Saluja was for delivery of foreign exchange abroad. As noted in the AO, the details of the foreign bank accounts were available in the documents seized from the residence of Mr. Saluja.
The telephone number of Mr. Gopalani was found in the loose sheets recovered from the residence of Mr. Saluja. One of these loose sheets at page 19 contained instructions in writing by Mr. Gopalani. This was confirmed by the report of the hand writing expert. Mr. Gopalani did not challenge the report of the handwriting expert. He did not seek to cross-examine the expert. The report, therefore, corroborated the retracted statement of Mr. Saluja that he had received instructions from Mr. Gopalani to pay USD 50,000 to Geeta Soni. The aforementioned evidence was sufficient to conclude that Mr. Gopalani had contravened Section 9 (1) (f) (i) FERA. - Decided against Appellants.
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2014 (5) TMI 824
Violation of Section 8 (1) of the Foreign Exchange Regulation Act, 1973 - allegation that appellant has exported the goods "only for availing export benefits" - levy of penalty - Held that:- From the inquiries purportedly made by CGI, Dubai, as reflected in the correspondence between it and the DRI, the consignment was probably not cleared by APL since there were legal problems regarding the copyright raised by the Dubai Customs. Interestingly, in the "brief investigation report", enclosed with the letter dated 12th April 2002 written by DRI to the ED, it was admitted that in order to establish that money laundering was the main motive behind the whole exercise of export "it is necessary to have on hand the export products, i.e., the cassettes." The report noted that "we do not have any representative sample of the export product and it is also not possible to get a representative sample of the export that is more than one and half year old." It was, therefore, stated that it may not be possible to establish a case of export of sub-standard goods and/or goods not matching the exact description. The report concluded that the non-clearance of goods "gives rise to doubts that the transaction may not be genuine and this indicates that there may be violations of provisions of FERA/FEMA."
What is clear from the document is that there were only doubts being expressed and there was no evidence as such to back the suspicion.
The AT misdirected itself in shifting the burden of proof of suspicion to the Appellants by invoking Section 106 of the Evidence Act.The reasons for APL not lifting the consignment can, by no stretch of imagination, be said to be within the "exclusive knowledge" of the Appellants. APL was a different legal entity based in Sharjah, UAE. Inquiries could have easily been made with APL itself as to why it did not lift the consignment.
The major premise of the entire proceedings was that through non-banking channels NIL paid a sum of ₹ 35,92,512 to APL. There was absolutely no evidence of any kind to back this allegation. In the absence of proof of the above alleged transaction, it could not have been concluded by the AT that NIL had improperly received USD 83,160 and thereby contravened Section 8 (1) FERA. Suspicion in this case was allowed to replace proof and this resulted in an erroneous order being passed by the AT. - Order set aside - Decided in favour of assessee.
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