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FEMA - Case Laws

Showing 461 to 480 of 1440 Records

2015 (4) TMI 1217

Applications for additional evidences - denial of natural justice - offence under SAFEMA - Held that:- After careful perusal of all the submissions and documents we are satisfied that the Competent Authority decided the case without giving a reasonable opportunity to the appellants to produce all the evidence before him. We are also guided by the fact that upon verification and examination, the submissions about the legal acquisition of the forfeited properties have been found to be acceptable by the ld. Authorized representative for the respondent. We accordingly allow both the miscellaneous applications for additional evidences filed by the applicants/appellants and take on record the additional documents filed by the appellants.
2015 (4) TMI 985

Detention of petitioner - Prevention of smuggling of goods - Held that:- Detaining authority, after passing the detention order dated 27th February, 1989 was indifferent in securing the detenu by not taking proper action with great caution. It further appears that the police authorities of the Respondent No.4 were also not prompt in their action in executing the said detention order and the execution of the said detention order was unduly delayed, which allowed the detenu to remain at large for a long period and has consequently defeated the very purpose of the impugned order. The Respondent Nos.1 and 2 have failed to satisfactorily explain the delay occurred in executing the order of detention after a lapse of abut 26 years. As has been held by the Supreme Court in the case of P.U. Iqbal (1991 (12) TMI 269 - SUPREME COURT), the delay throws a considerable doubt on the genuineness of the requisite subjective satisfaction of the detaining authority in passing the detention order and consequently renders the detention order bad and invalid because of the 'live and proximate link' between the grounds of detention and the purpose of detention is snapped in arresting the detenu. The Petition, therefore, deserves to be allowed thereby setting at liberty the detenu forthwith - Decided in favour of appellant.
2015 (4) TMI 639

Imposition of penalty - prohibition of any payment into a credit of a resident outside India except with general or special permission of the Reserve Bank of India - Held that:- Admittedly, the payment was made in India towards customs duty payable by the non-resident Indian while importing the car. The adjudicatory authority with reference to notification No.16/2000, dated 03/05/2000 held that only certain payments are allowed to be made in favour of a resident outside India during his stay in India and not one that was paid by the petitioner to the importer of the car, who is a Non-resident Indian. - The payment now effected is not one referable as permitted under notification No.16/2000, dated 03/05/2000. The notification No.FEMA/17/RB-2000, dated 03/05/2000 relied by the learned counsel for the petitioner has no application in this matter, as the same deals with the payment in Indian rupees to residents of Nepal and Bhutan. The adjudicatory authority passed the order after adverting to the relevant provisions. I do not find any infirmity with the order passed by the adjudicatory authority in regard to the decision making process - Decided against the appellant.
2015 (4) TMI 232

Contravention of Section 9 (1) (b) and (d) of the Foreign Exchange Regulation Act, 1973 - Penalty u/s 50 - Criminal prosecution for Economic Offences - Economic Offences Court acquitted the appellant holding that the prosecution has not proved the guilt of the appellant beyond all reasonable doubt - Imposition of pre deposit condition for hearing appeal against imposition of penalty - Held that:- In view of the decision of the Supreme Court in Standard Chartered Bank's case (2006 (2) TMI 272 - SUPREME COURT OF INDIA), which has also been rendered under the provisions of the Foreign Exchange Regulations Act, the plea of the appellant that on his acquittal in the criminal case, no penalty is imposable on him, does not merit consideration, since the Supreme Court has categorically held that adjudication and prosecution are two independent proceedings and the finding in one is not conclusive in the other. In view of the above decision of the Supreme Court, this Court finds no reason to interfere with the order passed by the Appellate Tribunal. - Decided against appellant.
2015 (3) TMI 1165

Application for amendment in the memo of appeal - Held that:- The amendment application appears to have been made bonafidely and through it the appellant wants to bring on record the subsequent developments. Through the proposed amendment, no new cause has been set up by the appellant and is in continuation of the facts which were placed earlier. The subsequent developments are being placed before the Tribunal, so that they may be duly considered at the time of the final disposal of the appeal. The application, therefore, deserves to be allowed.
The application for amendment in the memo of appeal is allowed. The amendment be incorporated within 10 days of the receipt of the copy of the order. Reply/written statement, if any may be filed by the respondent within 15 days thereafter. List on 26-5-2015 for hearing.
2015 (3) TMI 687

Misuse of telephone line - one ISDN line was made a permanent channel at each of the above premises and thereafter by using sophisticated equipment international calls were being distributed to Delhi & nearby areas illegally through PSTN (Public Switch Telephone Network) - One ISDN line has a bandwidth of 144 Kbps and this bandwidth was misused to make about 24 voice calls in one single ISDN call, which caused loss equivalent to the charges for 22 lSD calls to the Govt. of India in terms of foreign exchange - Held that:- statutory requirement of issuance of notice under proviso of Section 61(2)(ii) of the FERA, its date and manner as well as the failure to consider the petitioner's reply has resulted in manifest error in the exercise of jurisdiction by ACMM . The order taking cognizance in the instant case and issuance of summons is contrary to law.
Thus impugned order of cognizance and summoning of petitioner by ACMM vide order-dated 27th May, 2002, is illegal and is against the settled law and is liable to be quashed as the petitioner was not given opportunity as envisaged in law under Section 61 of the FERA which is apparent from the fact that complaint was filed and initiated in a haste manner before the ACMM even before the expiry of the period of opportunity granted to petitioner and the Trial Court in utter ignorance of the right given to the petitioner under Section 61 (2) and the bar imposed upon. The Trial Court thereby upon taking cognizance, issued process against the petitioner, which is apparent from the fact that the trial court did not even record in the impugned order about the fulfillment of statutory and mandatory requirement of Section 61 (2) of the FERA.
With regard to Show Cause Notice for adjudication proceedings dated 4th April, 2002, which was served upon the petitioner on 22nd August 2002 i.e. after filing of the complaint, which was replied by petitioner vide reply dated in 19th September, 2002. - It is admitted fact that no proof of service of notice was filed by the respondent at the time of filing the complaint on 27th May, 2002 to establish that an opportunity in terms with Section 61 (2) was given to the petitioner and the petitioner failed to respond the same by showing that it has permission from the RBI or not making him liable for prosecution under Section 56 of the FERA.
Legal bar imposed in proviso to Section 61 of the FERA, is ought to have satisfied himself at the first instance before issuance of the process about compliance of proviso to Section 61 (2) about the factum of opportunity given to the accused and his satisfaction to this effect must be there before taking cognizance against the petitioner in exercise of his legal duty, as there is a statutory bar imposed upon the ACMM from taking cognizance. If the trial court would have exercised his legal duty diligently in terms of Section 61 (2) of the FERA the cognizance could not have been taken for want of granting an opportunity to the petitioner, as done by the trial court in a mechanical manner. - Impugned order is liable to be set aside - Decided in favour of appellant.
2015 (2) TMI 1160

Penalty under Section 13(1) of Foreign Exchange Management Act, 1999 - direction to the fourth respondent seeked to release the balance amount directed to be released to the petitioner under Ext.P1 order - Held that:- As a statutory appeal under Section 17 of the Act is pending before the fifth respondent and the said amount cannot be released during the pendency of the said appeal thus find some force in the objection raised by the revenue.
The grievances of the petitioner can be redressed by directing the fifth respondent to dispose the statutory appeal at the earliest. The fifth respondent is directed to dispose Ext.P5 appeal at the earliest, at any rate, within a period of two months from today.
2015 (2) TMI 1044

Contravention of Section 9 (1) (b) and (d) of the Foreign Exchange Regulation Act, 1973 - Whether in a case where an offence was punishable with a mandatory sentence of imprisonment, a company incorporated under the Companies Act, can be prosecuted, as the sentence of imprisonment cannot be imposed on the company? - Held that:- In view of the decision of the Supreme Court in Standard Chartered Bank's case (2006 (2) TMI 272 - SUPREME COURT OF INDIA), which has also been rendered under the provisions of the Foreign Exchange Regulations Act, the plea of the appellant that on his acquittal in the criminal case, no penalty is imposable on him, does not merit consideration, since the Supreme Court has categorically held that adjudication and prosecution are two independent proceedings and the finding in one is not conclusive in the other. In view of the above decision of the Supreme Court, this Court finds no reason to interfere with the order passed by the Appellate Tribunal. - Decided against appellant.
2015 (2) TMI 460

Imposition of penalty jointly and severally - failure to take reasonable steps for repatriation of export proceeds of US $ 23580.02 in respect of goods exported under 3 GRIs - Held that:- While going through the order of penalty, I have noted that there is hardly any discussion on the role of the partners that led to non-realisation of the export proceeds of the 3 GRs and the ld. adjudicating officer has not arrived at any finding to show that the partners were responsible for non-realisation of the export proceeds. Section 68(1) of FERA, 1973 lays down the provision for monetary penalty on the partner only when it is found that he was in charge of, and was responsible to, the company for the conduct of business of the company. On this finding only, he shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. While sub-section (2) of Section 68 of FERA, 1973 lays down a provision that where it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.
Provisions of Section 68 of FERA, 1973 are more explicit in this regard. I, therefore, find that the impugned order imposing joint penalty on the partners before proving that non-realisation of the three GRs was attributable to each of them, is liable to be quashed and set aside.
It appears to me from the correspondence exchanged between the appellants and the authorized dealer Punjab National Bank that the appellants had been realizing full amounts of export proceeds against all other exports made under different GRs but payment against three GRs in question could not be realized due to taking delivery of the goods by the foreign buyer fraudulently. That there had been fraudulent delivery of the goods is proved by the certificate dated 20-1-2003 issued by the authorized dealer whereunder they have confirmed the same and also the fact of original complete set of documents in their possession. Therefore, I am led to believe that the appellants were making all reasonable efforts for realizing the export proceeds but realization in respect of three pending GRs could not be made due to circumstance beyond their control.
On plain reading of the sub section (2) and sub section (3) of Section 18 of FERA, 1973, it is crystal clear that the Act does not render non-realisation of export proceeds per se punishable thereunder. The essential ingredients of the sub-section (2) of Section 18 is doing or refraining from doing anything or taking or refraining from doing anything or taking or refraining from taking any action which has the effect of securing the result which is envisaged either in clause (a) or (b) of the said sub-section. It would be sufficient for an exporter to discharge the adverse presumption under Section 18(3) of the Act when he shows that reasonable steps within his limitations have already been taken. In the instant case the learned adjudicating officer has failed to correctly appreciate the nature and extent of the presumption to be drawn in terms of Section 18(3) of the Act. In these circumstances, the ld. adjudicating officer appears to have erred while holding the appellant company guilty of the alleged contravention for not taking reasonable steps. - appellants have taken all reasonable steps to rebut the presumption under Section 18(2) of FERA, 1973 and therefore, the view taken by the ld. adjudicating officer in the impugned order is not tenable on the facts and circumstances of the case. - Decided in favour of appellants.
2015 (2) TMI 415

Contravention of the provisions of Section 9(1)(b), 9(1)(d) and Section 64(2) r/w Section 9(1)(d) of Foreign Exchange Regulation Act, 1973 - Imposition of personal penalty - violation under Section 51 of FERA, 1973 - whether the adjudicating authority has given the appellant an opportunity of cross-examining the mahazar witnesses and the person who recorded the voluntary statement of the appellant - Held that:- Sh. Kiran S. Javali, Counsel for the appellant chose not to pursue the cross-examination but preferred the case to be decided on the written submission he proposed to make and requested the Adjudicating Authority to conduct the proceedings on the basis of facts and evidence on record. Sh. Kiran S. Javali, Counsel for the appellant filed his written submission on 19-10-2010 which is taken into record. Therefore, I am of the view that appellant by choosing not to proceed with cross-examination of witnesses has himself given a go by to the direction of the Hon’ble High Court. Even his written submission is bereft of the demand of cross-examination and, it appears, he had no dispute at all about the issue of cross-examination of witnesses. For the reasons stated herein, the question of cross-examination does not arise and the adjudication order now is not vitiated for want of opportunity to cross-examine the witnesses.
Whether the Adjudicating Authority is justified in re-adjudicating the case to the extent that was already decided by this Tribunal by Order dated 19-7-2002. - Held that:- remitting back the case to the Adjudicating Authority by the Hon’ble High Court of Karnataka was for conducting a fresh enquiry into the allegation as made in the SCN and adjudicating the case according to law. The word “fresh enquiry” in this case means conducting the adjudicating proceedings over again setting aside the earlier Adjudication Order. When the fresh enquiry led to passing of the present Adjudication Order which replaced the earlier Adjudication Order, this Tribunal’s Order dated 19-7-2002 passed in Appeal No. 779/1993 against earlier Adjudication Order is non-existent in the eyes of law. Therefore, exoneration of the appellant of charges under Section 9(1)(b) & (d) of FERA, 1973 under this Tribunal’s earlier Order dated 19-7-2002 stands disallowed at the threshold and that Order no more subsists.
Appellant’s dispute was only with the drawal of Panchnama in the office of the DRI consequent to the search of the appellant and his scooter. The appellant was apprehended at about 2115 hours of 6-1-1989 near Sawarkar Baba Pai Petrol Pump, Mangalore. It is evident from a bare perusal of the Panchnama and cross-examination of Sh. Gangadharan, Assistant Enforcement Officer that there was a prior intelligence on the movement of the appellant on or about 2100 hrs. at the spot where he was apprehended and he would be having at his person certain amounts which was meant for distribution in violation of the provisions of the Act. Since it was very late in the night, considering the safety and security of the appellant he was taken to the office of DRI for the search of his person and the scooter for which witnesses were called to the office and a thorough search resulted in seizure of ₹ 8.50 lacs wrapped in newspaper sheets kept in gunny bag in the leg space of his scooter and of documents in 2 sheets recovery of which has not been disputed by the appellant. Therefore, I also concur with the finding of the ld. Adjudicating Authority that the conduct of the search at the office of DRI at Mangalore by the officers of Enforcement Directorate and DRI does not impair the adjudication proceedings.
Appellant miserably failed to prove the source of ₹ 8.50 lacs when he claims that the amount of ₹ 8.5 lacs alleged to have been seized from him actually belongs to him. He has not produced any document to prove the source of income. I find that the statement is only an explanation to the seizure of ₹ 8.5 lacs and documents. Sheet No. 1 lists date wise receipts of the amount of ₹ 57,00,000/- in 14 occasions whereas Sheet No. 2 shows payments of ₹ 48.50 lacs made to Sh. Abdul Basith Kadli in 13 occasions. The entire case against the appellant is made out from the explanation contained in the statement to the seizure. The fact of receiving and making payments as evident from the recovery and seizure has not been disputed by the appellant.
As regards the criminal complaint initiated by the respondent under Section 56 of FERA, 1973, the appellant submitted that the complaint was supported with the same set of evidence that have been relied upon in the adjudication proceedings. Since the complaint was discharged exonerating the appellant of criminal prosecution and the respondent had not challenged the Order of exoneration, the impugned order passed in pursuance of the SCN supported by the same set of evidence is liable to be quashed and set aside.
As regards the penalty, the Adjudicating authority is vested with power to impose penalties under Section 50 not exceeding five times the amount or value involved in any contravention. I am, therefore, of the view that the penalties imposed on the appellant are commensurate with the quantum of amounts involved in the contravention. - Reason to interfere in the impugned order in so far as it relates to the levy of penalties of ₹ 5,70,000/-, ₹ 4,80,000/- & ₹ 8,50,000/- on the appellant respectively for contravention of Section 9(1)(b), 9(1)(d) & 9(1)(d) r/w Section 64(2) of FERA, 1973 and also to the confiscation of ₹ 8.50 lacs under Section 63 of the Act. - Decided against assessee.
2015 (2) TMI 374

Seizure of currency - cash balance found from factory premises - Held that:- Currency notes constitute property of the petitioner within the meaning of Article 300A of the Constitution of India. No person can be deprived of his property save by authority of Law. There is no explanation at all as to the circumstances in which the property of the petitioner has been seized. - writ application is disposed of by directing the respondents-authorities to return the cash seized on February 22, 2011 along with interest that has accrued on the aforesaid sum of ₹ 10,00,000/- to the petitioner within a fortnight from the date of communication of this order. - Decided in favour of petitioner.
2015 (2) TMI 334

Proceedings for forfeiture of her property under SAFEMA - Removal of superstructure of property - Forfeiture of property - Ownership of property - Society opposed request of CGOVT for entering its property in its name that a member of the Society is only the owner of the superstructure, the ownership of the land always remains with the Society, and further that in view of Section 22 of the Gujarat Cooperative Society Act, the Central Government cannot be a member of the Cooperative Society - Held that:- Central Government obviously be interested in liquidating the property by selling the property and to recover the sale proceeds. On the other hand, the Society has in the said affidavit in-rejoinder as well as through the counsel before the Court made it clear that if any individual member applies for membership of the society, who is otherwise qualified under the byelaws and agrees to abide by the byelaws of the society, the society would have no objection, subject to clearance of legal dues of the Society, to make him a member of the society, and transferring the plot in his name. - It would be open for the respondents and particularly, Respondent No.1 to identify the intending purchaser of the plot in question by assuring highest possible price to the Central Government through such means as may be permissible. - The Society shall make such purchaser its member and transfer the plot in question in his or her name, of course subject to clearance of all the legal dues of the society and payment of such transfer charges as may be permissible under the law. - Petition disposed of.
2015 (2) TMI 296

Condonation of delay - Held that:- A perusal of the averments made in the application moved by the appellant seeking condonation of delay in filing the appeal goes to show that the averments made in the application reflects that the explanation is wholly inadequate and unsatisfactory - Under Section 35 of FEMA, appeal against the decision or order of the Appellate Tribunal may be filed in the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal on any question of law arising out of such order. Proviso to Section 35 of FEMA makes it clear that the High Court if satisfied that the appellant was prevented by sufficient cause from filing the appeal within 60 days, may allow it to be filed within a further period not exceeding sixty days. Thus, 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.
Admittedly, appeal has been filed after considerable long lapse of time i.e. 352 days. Even if it is assumed that certified copy of the impugned order dated 2.3.2009 was received on 31.3.2009 by the appellant and that period has to be excluded from consideration even then, there is a delay of more than 120 days, which cannot be condoned. - Condonation denied.
2015 (2) TMI 260

Quashment of the detention order passed under Section 3(1) (i) & 3 (1) (iii) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 against Mr. Rameshwar Sharma (detenue), the petitioner’s husband, and a direction to set at liberty the detenue from detention - Held that:- In the matter at hand, after the alleged seizure of red sanders from possession and custody of the detenue on 28/29.09.2013, and conduct of investigation, the complaint was filed under Section 132 and 135 of the Customs Act on 28.11.2013. Thus, the investigation was complete by the said date. Further, the show cause notice under the Customs Act was issued to the detenue on 24.03.2014, which clearly establishes that the material evidence required for passing of the detention order was available with the Detaining Authority. However, inspite of the same, the detention order was not passed till 25.07.2014. The detention order was passed after a delay of about 8 months, which has defeated the purpose of the detention as it was to prevent the detenue from acting in a prejudicial manner by indulging in the prohibited trade. Thus, the live link had already broken by the time the detention order was passed belatedly on 25.07.2014. There is no satisfactory or convincing explanation brought on record by the respondents to explain the aforesaid delay.
It is evident from the facts of the case that the detenue informed the sponsoring authority about his illness, and that he was confined to his bed on 05.08.2014 and, thereafter, made regular correspondence with the sponsoring authority. Again, he personally appeared before the Sponsoring Authority on 14.08.2014. The above circumstances clearly establish the availability of the detenue at his residence and on one occasion, even before the Sponsoring Authority. Despite this the detention order was not served upon the detenue. The respondents have not disclosed any attempt made to serve the detention order soon after it had been made. It is not the respondents case that the detenue was avoiding service of the detention order. - Detention order quashed - Decided in favour of appellant.
2015 (2) TMI 217

Waiver of pre deposit - Appeal dismissed for want of satisfying the predeposit requirement - Held that:- though as per subsection( 1) of section 15, an appeal against an order of penalty or redemption charges should ordinarily be accompanied by payment of such amounts, it is within the power of the appellate authority to waive fully or in part such requirement either unconditionally or subject to conditions if it is found that such deposit would cause undue hardship to the appellant. - Under the circumstances, when the petitioner had made such an application making specific request for waiver of predeposit requirement, the appeal could not have been dismissed on the ground that the appellant did not fulfill such predeposit requirement. It was expected in law of the appellate authority to first decide such an application even if the application was rejected by the appellate authority refusing to waive predeposit requirement or same was waived on some condition, the appellate authority had to give reasonable time to the appellant to either make full predeposit or to fulfill the condition that may have been imposed in such order. In any case, dismissal of the appeal for want of predeposit without disposing of the petitioner’s application for waiver thereof was simply not permissible. - Impugned order stands quashed - Decided in favour of appellants.
2015 (2) TMI 174

Violations of Sections 9 (1) (a), 19 (1) (d) as well as 29 (1) (b) read with Section 68 FERA - Held that:- although the AO was passed on 15th October 1990, the order passed by the AT staying recovery of the penalty amount was not passed till 26th May 1995. Then again admittedly the stay order was not formally communicated to the parties. Although the ED appears to have not taken steps to recover the penalties during this entire period, it woke up on 27th December 1999 i.e. more than 9 years after the AO sanctioned the recovery of the penalty amount. At this time, the Petitioners were under a bona fide belief that the recovery of penalties had been stayed by the AT on 26th May 1995. This was also conveyed to the ED.
If despite adjudication order attaining finality no payment is made of the penalty amount then certainly it could be said that Section 57 FERA is attracted. Here, however, with there being definitely a clear stay order passed on 8th July 2002, there was no justification for the learned ACMM to have proceeded to frame notice on 17th May 2003 against the Petitioners for the offence under Section 57 FERA. It is possible that on the date of taking cognizance of the offence on 23rd April 2002, the ACMM may have been justified in proceeding with the order since the formal order of stay was not yet passed but certainly once that order was passed further proceedings ought not to have been continued.
In any event, with the subsequent developments there appears to be no purpose served in keeping the proceedings under Section 57 FERA alive. It is urged by learned counsel for the Respondents that the matters could be sent back to the learned ACMM for appropriate orders to be passed in light of the subsequent developments. The Court sees no purpose being served in doing that except that it would delay the proceedings even further. - there is no ground made out for continuing the proceedings under Section 57 FERA qua the Petitioners. - Decided in favour of assessee.
2015 (2) TMI 124

Validity of detention order - Forfeiture of property under SAFEMA - Detention notice not served - Violation of principle of natural justice - Held that:- Shri Sarin was never served with the detention order, nor even made aware of it ever, during the time it was in force. The respondents were unable to show any material to say that they tried to serve it upon him, and that he could have in any manner known of its existence, in order to challenge it. In these circumstances, it was impossible for him to impugn it, for the period July 1975 to March 1977. Once the Emergency was revoked, and the detention order suffered a similar fate, there was no manner for him again to challenge the detention order as it had no consequence. Another very important aspect is that when the Emergency was in force, individuals whose personal liberty was forfeited under preventive detention laws, such as COFEPOSA, were, by reason of the Proclamation of Emergency, prevented from asserting their Fundamental Rights. Initially nine High Courts held that notwithstanding this position, orders of detention could be challenged under Article 226 of the Constitution of India. However, the Supreme Court held that such petitions were not maintainable; effectively barring even the writ remedy to those aggrieved against detention orders, in A.D.M. Jabalpur v Shiv Kant Shukla [1976 (4) TMI 211 - SUPREME COURT].
The submission of the respondents that the revocation order in the present case was not under Section 12-A, but under Section 11 is of not much consequence. The only power of revocation which could have been sought recourse to, by the Central Government, under COFEPOSA, during Emergency, in respect of orders under Section 12-A, was under Section 12-A (3) after review and recommendation to release the detenu. That class of detention orders too stood excluded by virtue of Section 2 (2) (b) third proviso; however, the first category, i.e. those detention orders that had not been revoked before cessation of Emergency, could have been revoked only under Section 11 of COFEPOSA. - revocation of the detention order, in the present case, clearly fell within third proviso to Section 2 (2) (b) and was thus excluded from exercise of jurisdiction under SAFEMA. The writ petition has to consequently succeed; the orders of the competent and appellate authority are hereby quashed. - Decided in favour of appellant.
2015 (2) TMI 24

Contravention of Sections 18(2) and 18(3) read with Section 68 of the Foreign Exchange Regulation Act, 1973 - Imposition of penalty - whether each of them to whom notices were issued, were during the relevant period “in charge of and responsible to the said company for the conduct of the day-to-day business of the company”. - Held that:- ED has not been able to deny that the SCN was served on FIL and its directors, including the Appellant only at the address of the company and at the time when the Appellant had ceased to be a director. It is not the case of the ED that even after coming to know, when the appeal was filed by the Appellant, that he had ceased to be a director of FIL with effect from 31st October 2001, it offered to serve him a separate SCN at his address. Consequently, it is evident that no SCN was in fact served upon the Appellant at his address as on the date of the SCN, i.e., 28th May 2002.
The ED ought to have fairly stated before the AT that since no SCN had been served on the Appellant at his ordinary place of his residence, the AO qua him should in fact be set aside and the ED should be permitted to serve a separate SCN on him. However, even before this Court it was repeatedly asserted that as far as the ED was concerned, it had served the SCN on the Appellant through FIL. Therefore the Court is constrained to observe that the fundamental requirement of the Adjudication Proceedings and Appeal Rules, 1974 (“APAR”) (1974 Rules) and in particular Rule 10 (reproduced herein below) has not been satisfied in the present case.
In terms of Rule 10(b), service of notice had to be on either the address of his place of residence or his last known place of residence or the place where he carries on, or last carried on, business or personally works or last worked for gain. There can be no doubt that as on 28th May 2002, i.e., the date of the SCN, it had to be served either at the place of residence of the Appellant or the last known place of his work. As on that date, his address was not the address of FIL. - Even after coming to know that as on the date of the issuance of the SCN, the Appellant was no longer a director of FIL and therefore the notice issued to him at the address of FIL could not obviously be treated to have been served upon him, the ED was not prepared to say that the AO qua him must be set aside on that ground.
The AT failed to deal with the central point in the appeal filed by the Appellant. It has also failed to note his submissions in that regard. - The occasion for the Appellant to avail of the defence available to him under Section 68(1) FERA, i.e., to show that he was not in charge of the day-to-day affairs of the company or that the infraction complained of had not occurred with his knowledge or that he had exercised due diligence to avoid such contravention would arise only after he was served with the SCN along with the documents relied upon against him by the ED. In this case, the documents include the statement of Mr. Pradeep Verma. It is not the case of the ED that even on the date of the AO, it had actually served on the Appellant, the documents relied upon in the SCN. Consequently, it is not open to the ED to now contend that even without the relied upon documents being served on the Appellant, he should somehow have made out his case before the AT in support of his defence under the proviso to Section 68 (1) FERA. The impugned AO was in violation of the principles of natural justice, as well as the requirement of Section 51 FEMA read with Rule 10 of the APPR. - impugned AO dated 3rd November 2004 and the impugned order dated 2nd July 2008 of the AT are unsustainable in law and are hereby set aside. - Decided in favour of appellant.
2015 (1) TMI 1170

Foreign exchange allocated against the license having not been utilized - Waiver of pre deposit - Imposition of penalty - Held that:- Under the statutory scheme the appellants are under an obligation to file appeal simultaneously along with penalty amount unless and until dispensation is granted under Second proviso to Section 52 (2) on the application of the appellants after getting satisfied about the prima facie good case and undue hardship of the appellants. In the instant case, the appellate has not taken care to comply the judicial order despite sufficient indulgence shown by this Tribunal by granting 50% dispensation in favour of the appellant which shows lack of bonafide on the part of the appellant. The order was passed long back on 12.02.04 where the appellant has shown total defiance towards judicial order where equity does not lie in his favour. Looking towards this situation this appeal is liable to be dismissed.
Written submissions stated to be filed by the Petitioner on 15th September, 2009 are not on record of the Tribunal. However, in view of the endorsement even if it is accepted that the written submissions in para-7 submitted that without prejudice to the submissions the Petitioner herein prayed for time of two months to comply with the order dated 12th February, 2004, the same would not enure to the benefit of the Petitioner in as much as this alternate submission of depositing the amount was not taken when the application for withdrawal of the direction of pre-deposit was being considered. - Decided against Assessee.
2015 (1) TMI 1122

Contravention of Section 8(3) and 8(4) read with Section 68 of FEMA read with para-7A, 20(i) of Exchange Control Manual, 1995 (ECM) - Held that:- Impugned order of the appellate tribunal and the order-in-original suffer from serious infractions of the principles of natural justice and, even on merits, it appears that the appellants were able to provide sufficient material on record to raise a serious doubt about the alleged violation of FEMA. - In the present case, the order in original, as noticed above, is primarily founded upon the response dated 03.02.2004 received from Bank of India by the ED to its communication of 08.01.2004. It is not clear as to what is the nature and content of the information elicited by the ED from the Bank of India in its communication of 08.01.2004. It also remains in suspense as to what was the nature and content of the response sent by Bank of India in its communication dated 03.02.2004. It is not clear as to who sent the said alleged communication - i.e. whether it was sent by an authorized officer of the Bank or not.
The appellants should have then approached the Bank of India and enquired about the same. This argument has only to be stated, to be rejected. Pertinently, when the appellant company demanded copies of the said communications vide their letter dated 29.03.2004, the same were not provided. Without having copies of the said communication, this Court fails to appreciate as to how the appellants could be expected to gather any information from the said Bank, or get them verified. In fact, the appellants were not even obliged to do so, and it was the primary obligation of the adjudicating authority to place all incriminating material - which was intended to be relied upon to condemn the appellants and penalize them in a quasi-criminal proceedings, before the appellants to elicit their response. The order imposing penalty is undoubtedly a prejudicial order as it entails quasi criminal and penal consequences. No such order could have been passed behind the back of the appellants, without confronting them with all the material which was sought to be relied upon and granting adequate opportunity to them to deal with the same. It was obligatory for the adjudicating authority to thereafter consider the response of the appellants, if any, and after consideration of the entire matter, pass the adjudication order.
Reasoning adopted by the Appellate Tribunal in para 19 borders of perversity, when it observes that the appellant company had not approached the Bank of India to seek clarification about the said letter dated 03.02.2004. Pertinently, it appears that the Appellate Tribunal also did not even consider it necessary to go through the said correspondences dated 08.01.2004 and 03.02.2004 between the ED and the Bank of India. The Appellate Tribunal did not consider it necessary to satisfy itself as to the nature of information sought from, and provided by the Bank of India. On this short ground, the order in original and the impugned order of the Appellate Tribunal are liable to be quashed and set aside.
Respondents have not established the violation of provisions of FEMA as alleged against the respondent beyond all reasonable doubt. There is likelihood of the appellant company having utilized the remittances for import as claimed by it. The situation has to be viewed from the context that the initial inquiry pertained to 64 remittances. Eventually, the same was narrowed down to only four, and thereafter in respect of the fourth alleged remittance, the respondents were satisfied with the appellants explanation. According to the appellants, remittances to the tune of ₹ 700 crores have been made in relation to the business of the appellant company. If one were to keep the entire conspectus of facts in view, it does not stand to reason that the appellant company would fall foul of the law in respect of such miniscule amounts as claimed by the respondent, compared to the total remittances made by it. - The amounts deposited by the appellants in pursuance of the original order of adjudication before the Appellate Tribunal, shall be refunded without any delay. Similarly, the amounts, if any, deposited in this Court shall also be refunded to the appellants without any delay. - Impugned order is set aside - Decided in favour of Appellant.