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FEMA - Case Laws
Showing 481 to 500 of 1378 Records
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2014 (2) TMI 783
Contravention of Section 8 (1) of the Foreign Exchange Regulation Act, 1973 (‘FERA’) - whether the expatriated employees seconded by the parent corporation to its branch or liaison office in India are required to be paid salaries by such liaison or branch office and further whether the payment made by the parent corporation to its expatriated employees abroad creates any liability on the liaison or branch office to repay the said amount to the parent corporation.
Held that:- AOs have erroneously concluded that the expatriate employees of the parent corporation were ‘borrowed employees’ of the Appellants when there was no factual basis for such a conclusion. With the AOs holding that the case of the ED regarding violation of Section 9 (1) (c) FERA was not made out against any of the Appellants, the case regarding violation of Section 8 (1) FERA was untenable since the SCNs in all these cases set out the same allegations to justify the case under both provisions.
The question of the Appellants “acquiring” or “otherwise transferring” any foreign exchange as a result of the parent corporation remitting funds to the Appellants for disbursal of the salaries of the employees seconded to them did not arise. Further, the question of the Appellants having to repay the parent corporation the sum paid abroad also did not arise. Factually, there was no attempt made by any of the Appellants to repay any such amount to the foreign corporation.
Also, no reasons have been given in any of the AOs for the penalty imposed in terms of Section 50 FERA. Consequently, in all these cases, the determination of the penalty amount by the AOs is also held to be untenable in law. - Decided in favor of appellant.
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2014 (2) TMI 763
Levy of penalty for contravention of Section 8(3)(4) Foreign Exchange Regulation Act, 1973 (FERA) - respondent-Company had acquired foreign exchange for importing P.P. Dyed Chips. - goods imported by the Company were pigment preparations. - price of pigment preparation could be higher than the price of PP Dyed Chips. - Held that:- it would be difficult to dispute that pigment preparations are a product altogether different from PP Dyed Chips. Pigment preparations, it appears to me are the colouring substance whereas PP Dyed Chips are polypropylene chips which have been subjected to dyeing using a colouring substance for the purpose. Had PP Dyed Chips and pigment preparation being one and the same product there could be no reason for the respondents to place order for PP Dyed Chips instead of pigment preparations.
The foreign exchange utilised by the respondents for importing PP Dyed Chips was to the extent of ₹ 87,58,617/-. Considering the value of the goods imported by them, neither penalty imposed upon the Company nor the penalty imposed on its Managing Director, Mr. G.P. Poddar and the Executive Director Mr. A.K. MIttal can be said to be excessive. If at all, the penalty imposed upon them was on the lower side. Therefore, there is no scope for reducing the penalty. - Decided against the appellant.
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2014 (2) TMI 441
Misdeclaration of goods - Violation of Section 8(3) and (4) of the Foreign Exchange Regulation Act, 1973 (‘FERA’) - Levy of penalty - import of scotch whisky and malt to be used in upgrading locally manufactured liquor products through blending - alcoholic strength in excess of 42.8% V/V. - Held that:- the order of the SD holding that there was misdeclaration of the goods, because what was imported was scotch whisky of 63% strength, is not sustainable in law. Interestingly, the SD notes that the imported CAB of 63% concentration was to be used for blending of Indian liquor at 42.8%.
In other words, what was imported by SMPL could not be sold as such for consumption and answered the definition of CAB. The AT too appears to have overlooked the fact that CAB of a concentration higher than 42.8% V/V could not be sold as such and had to be diluted or blended to bring it to 42.8% V/V concentration.
The mere fact that the exporters declared the goods to be “wholly imported scotch whisky” did not mean that they were alcohol of a concentration that rendered them fit for consumption. - Order set aside - Decided in favor of appellant.
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2014 (1) TMI 1348
Violation of FEMA - Imposition of penalty - Sale of foreign currency at higher value - Held that:- there was no scope to allege a violation of paragraph 3 of the FLM or for that matter Sections 6(4) and 6(5) of FERA, 1973. Based on the interpretation of Sections 6(4), 6(5) of FERA, 1973 and paragraphs 3 & 9 of the FLM, we have held that the Original Authority, the Appellate Tribunal as well as the Division Bench of the High Court failed to appreciate the issue in the proper perspective while holding the appellant guilty of the violation alleged - sale of foreign currency at higher value was not the basis for the contravention and imposition of the penalty as against the Appellants.
Sale effected by the Appellants on a rate higher than the rate prevailing in the market was not the basis for the alleged violation of paragraph 3 of the FLM read with Sections 6(4), 6(5) and 7 of FERA. In the confiscation order passed by the Customs Authorities, where again the Appellants were also one of the noticees, no fault was found as against the Appellants on that ground - impugned orders by which the Appellants were found guilty of the violation of paragraph 3 of FLM read with Sections 6(4), 6(5) and 7 of FERA and the consequential imposition of penalty of Rs.50,000/- was wholly unjustified. The impugned orders are liable to be set aside and they are accordingly set aside. If the Appellants have parted with the penalty amount imposed under the impugned orders, the Respondent is directed to refund the same to the Appellants along with simple interest at the rate of 6% per annum, within two months from the date of this judgment - Decided in favour of assessee.
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2014 (1) TMI 1223
Failure to furnish Exchange Control Copy of the Bill of Entry in the bank - Contravention of provisions of FERA - Penalty u/s 50 - Tribunal dismissed appeal for bar of limitation - Whether the appeals before this Court are barred by limitation prescribed in Section 35 of FEMA or not - Held that:- The aforesaid Section prescribes a period of 60 days from the communication of the decision of the Appellate Tribunal for filing an appeal to this Court, but this Court can condone the delay in filing an appeal for a further period not exceeding 60 days if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the prescribed period - if an appeal preferred by the appellants before the Tribunal, it was required to be dealt with under Section 19 of the FEMA and, therefore, the Appellate Tribunal could entertain the appeals, even after the expiry of 45 days from the receipt of the order of the adjudicating authority if it was satisfied that there was sufficient cause for not filing the appeal within the aforesaid 45 days’ period. There is no upper cap on the delay which could be condoned by the Appellate Tribunal, in the event of its being satisfied that there was sufficient cause for not filing the appeal within the prescribed period.
It can hardly be disputed that the Tribunal ought to have considered the application of the appellants for condonation of delay in filing the appeals on merits instead of dismissing them on the ground that the delay beyond 45 days from the prescribed period could not be condoned by it - impugned order dated 5.2.2007 passed by the Appellate Tribunal is hereby set aside and the matter is remanded back to the Tribunal for deciding the application for condonation of delay on merit and in case the delay in filing the appeals is condoned, the said Tribunal shall also decide the appeals on merit - Decided in favour of assessee.
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2014 (1) TMI 1173
Contravention of provisions of Section 18(2) - Failure to secure export value - Held that:- exporters had discharged the burden placed on them by producing before the Board two cheques of Rs.1,88,176/- and Rs.1,17,841/-, which they claimed to have sent to the Commissioner of Customs. Admittedly, the cheques referred to above were never encashed by the Commissioner of Customs. Obviously the cheques could not have been encashed by him without first verifying the extent of export incentive availed by the exporters in respect of GRs which were subject matter of RBI communication dated 24.4.2003.
Tribunal was not right in law in saying that the burden with respect to proof of surrendering the export incentive shifted to the Directorate of Enforcement on account of their not producing any documents with respect to the extent of the export incentive availed of by the exporters. The burden in this regard, particularly, in view of the RBI communication dated 24.4.2003, always continued to remain with the exporters and it was for them to satisfy the Adjudicating Officer that all the export incentives which they had availed of in respect of GRs which were subject matter of the RBI letter dated 24.4.2003 had been fully surrendered by them. Even otherwise, an information of this nature is not expected to be in possession of the Directorate. The respondents had to either locate their own record or obtain the relevant information from the concerned Department, and then produce it either before the Bank, or before the Directorate of Enforcement - order passed by the Tribunal is set aside and the matter is remanded back to the Special Director of Enforcement to consider it afresh in the light of the additional documents which the respondents have filed along with affidavit - Decided in favour of Revenue.
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2014 (1) TMI 1021
Forfeiture of property - Whether in taking over the property of the contesting respondents, the procedure established by law has been followed by the writ petitioner - proceedings were initiated under SAFEMA, 1976 - activities of smuggling and illegal export of foreign exchange through carriers - Held that:- the show cause notice issued by the writ petitioner suffers from manifest irregularity, non-application of mind and in total perversion of SAFEMA. Though this Court has held that in a given case, there is no impediment for the competent authority to file a writ petition, the said discretion must be properly exercised by the authority. It is only in cases where Tribunal's order is perverse, the question of entertaining a writ petition will arise. It is not a fit case where any interference is called for in the impugned order of the third respondent Tribunal.
Section 6(1) of the SAFEMA will have to be strictly followed and the authority's satisfaction must be recorded in writing, failing which, the notice is liable to be quashed. - Writ petition dismissed.
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2014 (1) TMI 972
Imposition of penalty - Contravention of the provisions of Section 9(1)(b) and 9(1)(d) - Tribunal rejected assessee's petition for waiver of penalty - Held that:- challenge made by the petitioner to the impugned order, does not stand to legal scrutiny. Except by contending that the earlier Appellate Board had orally allowed the petition for waiver of pre-deposit, the petitioner is not able to prove to the satisfaction of the Court that there was such an order in existence. It must also be noted that FEMA is a complete Court by itself and the question of challenging the Tribunal's order in a writ petition under Article 226 of the Constitution of India, will not arise - Act cannot be bypassed and the jurisdiction under Article 226 of the Constitution of India cannot be invoked - Decided against assessee.
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2014 (1) TMI 796
Failure to take steps for realization of export outstanding - Maintanability of appeal - Section 52 of FERA or Section 19 of FEMA - Held that:- Merely because the proviso provides for deposit of penalty while preferring appeal against the order imposing penalty, cannot be said to limit the wide amplitude of the main provision providing for appeal “by any person aggrieved from any order made by the adjudicating authority”. “Any order” would include an order exonerating some of the noticees. Reference may also be made to Section 49(4) of FEMA, being a transitory provision providing for the cases governed by FERA to be continued to be governed by the said Act notwithstanding the repeal thereof. In this regard, it may also be noted that the order dated 26th September, 2003 of the Enforcement Directorate also records the same to have been made under the provisions of the FERA and not under the provisions of FEMA.
Once it is held that the grievance as raised in this petition is appealable and once it is admitted that appeal indeed was preferred, this writ petition would definitely be not maintainable - Even if the Appellate Tribunal has not returned any findings on the grievances raised by the petitioner qua the exoneration of the respondents No.3&4, the dismissal of the appeal indicates that the said grievance has also been negatived - If the petitioner is aggrieved of the order of the Appellate Tribunal, she has remedies thereagainst and cannot pursue this petition qua the order which has been subject matter of appeal - Decided against Petitioner.
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2014 (1) TMI 692
Complaint under section 56 of the FERA - Notice u/s 61 not served - Held that:- respondents maintain in their counter affidavit that Opportunity Notices in terms of Section 67 of FERA were issued to petitioners and the documents relied upon in the complaint in question were supplied to petitioners - The stand of petitioners that there was no intentional or wilful default on their part also raises a triable issue which cannot be determined while exercising inherent jurisdiction of this Court under Section 482 of Cr.P.C. and that too, at the threshold of these proceedings - averments made in paragraph No. 2 (vii) & (viii) of the complaint in question prima facie justify continuance of proceedings arising out of this complaint.
Pertinently, prosecution of petitioners in the instant Complaint is for contravention of substantive provisions of this enactment i.e. Section 14, 16 & 18 (3) of FERA read with Central Government's Notification No. F-1/67/EC/73-1 & 3 both of 1st January, 1974. So, this question as well as the question of vicarious liability is left open to be considered at the stage of framing of charge/Notice under Section 251 of Cr.P.C., as the case may be - petition is disposed of with liberty to petitioners to urge the pleas taken in this petition on the afore-noted limited extent before the trial court at the stage of framing of charge/Notice, while not commenting upon the merits, lest it may prejudice either side - Decided in favour of Appellants.
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2013 (12) TMI 1750
Issues:
- Application for exemption/waiver of pre-deposit of penalty
- Consideration of prima facie case and balance of convenience
- Interpretation of the Foreign Exchange Management Act, 1999
- Contention regarding the nature of the purchased land
- Goa Land Revenue Code provisions on land use
- Undue hardship due to confiscation of property
- Assessment of financial impact on the appellants
- Decision on pre-deposit and bank guarantee requirements
Analysis:
The judgment by the Appellate Tribunal for Foreign Exchange, New Delhi pertains to an application for exemption/waiver of pre-deposit of penalty filed by the appellants. The appellants argued that they have a strong prima facie case and emphasized the lack of incriminating evidence against them. The Tribunal was tasked with evaluating whether the appellants had a prima facie case, the balance of convenience favored them, and what conditions could be imposed for dispensation with the pre-deposit of penalty under the Foreign Exchange Management Act, 1999.
Regarding the nature of the purchased land, the appellants contended that the land was acquired for a hotel and resort, not for agricultural activities. They highlighted that necessary permissions were obtained for non-agricultural use, indicating their intention to set up a hotel. Conversely, the respondent argued that the land was agricultural, citing the absence of a conversion certificate for non-agricultural use as per the Goa Land Revenue Code.
The issue of undue hardship arose due to the confiscation of the property, hindering the appellants' ability to generate profits. The appellants claimed financial loss, impacting their ability to develop the property and generate income. However, the respondent opposed the dispensation of pre-deposit based on an affidavit suggesting that the appellants' financial loss was not substantial enough to warrant complete exemption.
Ultimately, the Tribunal directed the appellants to deposit 30% of the penalty within a specified timeframe and provide a bank guarantee for the remaining penalty amount to ensure penalty realization. Failure to comply would lead to dismissal of the appeal. The decision balanced the financial impact on the appellants with the need to secure penalty realization, showcasing a nuanced approach to addressing the issues raised in the case.
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2013 (11) TMI 1815
Issues Involved:
1. Whether the company contravened provisions of FEMA by purchasing agricultural land using foreign remittances obtained under the Automatic Route.
2. Whether Ms. Yulia Yaskova, as a director, is liable for the contravention by the company under FEMA.
3. Whether the properties involved in the contravention are liable to be confiscated to the Central Government under FEMA.
Detailed Analysis:
Issue I: Contravention by the Company
The primary issue revolves around whether the company purchased agricultural land worth Rs. 1,53,17,000/- using foreign remittances obtained under the Automatic Route, thereby contravening the provisions of section 6(3)(b) of FEMA read with item No.6 of List B of Annexure A to Schedule 1 of the Foreign Exchange Management (Transfer or Issue of Security by a person resident outside India) Regulations, 2000. The Tribunal found that the properties purchased were indeed agricultural lands, as corroborated by the statements of Mr. Francisco X Souza, an ex-director, and the lack of conversion sanad from agricultural to non-agricultural purposes. The Tribunal concluded that the company's actions were in contravention of the regulations, and the penalty of Rs. 12,00,000/- imposed was deemed appropriate and within legal limits.
Issue II: Liability of Ms. Yulia Yaskova
The second issue concerns the liability of Ms. Yulia Yaskova, a director of the company, under section 42(1) of FEMA. It was established that she was in charge of and responsible for the company's business during the period of contravention. The Tribunal noted that she did not provide evidence to prove that the contravention occurred without her knowledge or that she exercised due diligence to prevent it. Consequently, the Tribunal upheld the penalty of Rs. 1,00,000/- imposed on her, finding her guilty of the contravention alongside the company.
Issue III: Confiscation of Properties
The final issue pertains to the confiscation of the properties involved in the contravention. Under section 13(2) of FEMA, the Adjudicating Authority has the discretion to confiscate properties in respect of which contraventions have occurred. The Tribunal noted that the properties, amounting to Rs. 1,53,17,000/-, were involved in the contravention and were thus confiscated to the Central Government. The Tribunal found no reason to question the application of judicial discretion by the Adjudicating Authority in this matter, as the appellant did not contest this aspect.
Conclusion:
The Tribunal dismissed the appeals Nos. 98-99/2011, finding no illegality in the impugned order. The penalties and confiscation were upheld as appropriate under the circumstances, with no order as to costs.
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2013 (11) TMI 1814
Issues Involved:
1. Application for stay and waiver of pre-deposit of penalty.
2. Establishing a prima facie case by the appellant.
3. Determining undue hardship due to penalty deposit.
4. Safeguarding the realization of penalty.
Detailed Analysis:
1. Application for Stay and Waiver of Pre-deposit of Penalty:
The appellant filed an application seeking a stay and waiver of the pre-deposit of a penalty imposed for alleged contraventions under the Foreign Exchange Management Act, 1999 (FEMA). The penalty was levied for receiving funds in India without the permission of the Reserve Bank of India, which contravened Section 3(c) of FEMA. The appellant argued for a waiver based on the second proviso to sub-section (1) of Section 19 of FEMA, which allows the Appellate Tribunal to dispense with the deposit if it causes undue hardship, subject to conditions to safeguard penalty realization.
2. Establishing a Prima Facie Case:
The appellant contended that the adjudicating officer did not consider the defense presented in response to the show-cause notice. The appellant claimed that statements recorded did not identify him, and the evidence was insufficient to prove the allegations. The appellant asserted that the statements were obtained under duress and lacked corroboration. The appellant also argued that the seized amount was accounted for and belonged to a relative, with no investigation conducted to verify this claim. The appellant's request for cross-examination of the enforcement officer was denied, violating natural justice principles. The tribunal noted that while a prima facie case seemed plausible, a detailed examination would occur during the final hearing.
3. Determining Undue Hardship Due to Penalty Deposit:
The appellant argued that the financial condition was weak, residing in a rented house and relying on community support for sustenance. The appellant submitted an affidavit detailing the lack of income, property, and financial resources, asserting that the penalty deposit would cause undue hardship. The tribunal referred to Supreme Court judgments interpreting "undue hardship" as excessive hardship that deprives a person of basic life necessities. The tribunal found the appellant's financial status credible, as the respondent's report lacked substantial evidence to refute the appellant's claims. Thus, the tribunal concluded that the penalty deposit would indeed cause undue hardship.
4. Safeguarding the Realization of Penalty:
To balance the waiver of pre-deposit with safeguarding penalty realization, the tribunal imposed a condition requiring the appellant to provide a bank guarantee equivalent to the penalty amount. This condition aimed to secure the penalty's realization while granting relief from immediate financial burden. The tribunal directed the appellant to furnish the bank guarantee within 45 days, warning that failure to comply would result in dismissal of the appeal. The tribunal emphasized that this measure was necessary due to allegations of the appellant's involvement in hawala activities.
In conclusion, the tribunal granted the waiver of pre-deposit due to undue hardship but required a bank guarantee to ensure penalty realization, balancing the appellant's financial constraints with the enforcement of legal obligations.
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2013 (11) TMI 1738
Issues Involved:
1. Suppression of vital documents by the sponsoring authority.
2. Non-consideration of the show cause notice by the detaining authority.
3. Delay in passing and executing the detention order.
4. Advisory Board's consideration of additional documents.
5. Opportunity to adduce evidence before the Advisory Board.
Summary:
1. Suppression of Vital Documents:
The petitioner argued that the detaining authority did not consider the bail order from Andhra Pradesh, which had conditions that could have prevented the detenu from engaging in prejudicial activities. The Court found that the conditions in the bail order did not prevent the detenu from continuing illegal activities and thus, the bail order was not a crucial document that could render the detention order unconstitutional.
2. Non-Consideration of Show Cause Notice:
The petitioner contended that the show cause notice dated 2.5.2013 was not placed before the detaining authority. The Court examined the relevance of the show cause notice and concluded that it only summarized materials already available in the files considered by the detaining authority. Therefore, the omission of this document did not affect the validity of the detention order.
3. Delay in Passing and Executing the Detention Order:
The petitioner claimed there was an inordinate delay in issuing and executing the detention order. The Court reviewed the explanation provided by the respondents, which detailed the procedural steps and efforts to locate the detenu. The Court found the explanation satisfactory and held that the delay did not invalidate the detention order.
4. Advisory Board's Consideration of Additional Documents:
The petitioner argued that the Advisory Board considered the show cause notice, which was not before the detaining authority. The Court noted that u/s 8(c) of the COFEPOSA Act, the Advisory Board is empowered to call for additional information. Since the show cause notice was served to both the detenu and his advocate, the Court found no violation of principles of natural justice.
5. Opportunity to Adduce Evidence Before the Advisory Board:
The petitioner claimed that the detenu was not allowed to adduce oral evidence before the Advisory Board. The Court observed that there was no specific averment or evidence that a request to adduce evidence was made and denied by the Advisory Board. Therefore, the Court did not accept this contention.
Conclusion:
The Court dismissed the writ petition, finding no merit in the contentions raised by the petitioner. The detention order was upheld as valid and constitutional.
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2013 (11) TMI 1540
Imposition of penalty - Non realization of export proceeds - Held that:- The 2nd respondent in exercise of the powers under Regulation 13 of the Foreign Exchange Management Regulations, 2000, RBI issued the orders agreeing for condonation of non-realization of export proceeds and writing off the outstanding amount subject to the condition of the exporter should surrender to the proportionate amount of incentives. Further, the appellant cannot claim the benefit of condonation under the said order unless the condition namely, surrender a proportionate amount of incentives to the Commissioner of Customs has been complied with by the exporter concerned. However, the condition has not been complied with as stipulated in the order passed by the 2nd respondent, as such the appellant cannot seek to claim any benefit under the said order dated 23-2-2005 of the 2nd respondent.
Firm constituted by the family members and out of them no one stated that the appellant is retired from the said firm since 1997, as such the appellant is not liable to pay any penalty. Further, one of the partners Shri Sharavan Kumar has stated in his statement before the 1st respondent herein that the appellant and two others are partners besides the appellant and another partner Shri Sharavan Kumar were looking after the business and the day to day affairs of the Company - Decided against appellangt.
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2013 (11) TMI 861
Violation of Sections 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973 - Confiscation of foreign and Indian currency - Tribunal sustained the confiscation of Foreign Currency but the confiscation of Indian Currency and Indira Vikas Patra Certificates was set aside - Bar of limitation - Held that:- The writ application is disposed of by directing the concerned respondents to forthwith refund the proceeds of the Indira Vikas Patra along with further interest that might have accumulated thereon within a fortnight from the date of communication of this order. The Indian Currency and the balance penalty deposited by the petitioner shall also be refunded to the petitioner along with interest as per Section 42 sub-section (3) of the FERA, within the aforesaid period - The petitioner having unnecessarily been dragged to this Court shall be entitled to the costs of this proceedings assessed at 300 GMs to be paid to the petitioner along with the amounts refundable - Decided in favour of appellant.
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2013 (11) TMI 759
Bar of limitation - Whether the show cause notice issued was time barred - Tribunal has quashed the show-cause notice as time barred - Held that:- order of the Tribunal is self-explanatory and the reasons mentioned in the impugned order to the effect that the action, if any, for the alleged breach under Foreign Exchange Regulation Act, 1973 (hereinafter referred to as 'FERA') could be taken within a period of two years, which has, in any case, expired on 1.6.2002, whereas the memorandum of the show-cause notice is on 26.7.2005. Even if the receipt of the report for the first time by the Assistant Director to the Special Director is considered, the same was on 5.5.2005. Under these circumstances, even if the earliest date is considered in respect of the report for the alleged breach under FERA, the period of limitation for two years for initiation of the action under FEMA under Section 49(3) had, in any case, expired - Decided against Revenue.
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2013 (10) TMI 1585
Issues Involved:
1. Validity of penalty imposed on the appellant under Section 68 of the Foreign Exchange Regulation Act, 1973.
2. Delay in issuing the Show Cause Notice.
3. Responsibility of directors for contraventions under the Foreign Exchange Regulation Act.
4. Applicability of previous judgments to the present case.
Detailed Analysis:
1. Validity of Penalty Imposed:
The appellant challenged the imposition of a penalty of Rs. 1,50,000/- under Section 68 of the Foreign Exchange Regulation Act, 1973, arguing that he was not aware of the transaction in question and was not involved in the day-to-day affairs of the company. The appellant emphasized that he was only a director for a short period and that the executive directors were responsible for the company's daily operations. The Tribunal observed that the onus was on the respondent to prove that the appellant was in charge of the company's affairs, which they failed to do. The Tribunal found merit in the appellant's submission that the penalty was wrongly imposed, as there was no evidence to show the appellant's involvement in the contravention.
2. Delay in Issuing the Show Cause Notice:
The appellant argued that the Show Cause Notice was issued after an inordinate delay of 15 years from the date of the transaction, which occurred in 1987. The Tribunal noted that such a delay could cause serious prejudice to the appellant in preparing his defense. The Tribunal referenced the Delhi High Court's observation that a delay of over 14 years was prejudicial to the appellant, thus supporting the appellant's contention regarding the delay.
3. Responsibility of Directors:
The appellant contended that he was not responsible for the contravention as he was not involved in the day-to-day management of the company. The Tribunal referred to the Delhi High Court's decision, which stated that the initial burden was on the prosecution to prove that a director was responsible for the company's daily operations. The Tribunal concluded that the prosecution failed to discharge this burden, and thus, the appellant could not be held liable for the contravention.
4. Applicability of Previous Judgments:
The Tribunal considered the appellant's case in light of previous judgments by the Delhi High Court, which set aside similar penalties imposed on other directors in related cases. The Tribunal found that the facts and issues in the appellant's case were similar to those in the Delhi High Court's judgments. Consequently, the Tribunal applied the reasoning from those judgments to the present case, leading to the setting aside of the penalty against the appellant.
Conclusion:
The Tribunal set aside the Impugned/Adjudicating Order dated 25.05.2010, passed by the Special Director, Enforcement Directorate, New Delhi, against the appellant. The Tribunal directed that the pre-deposited amount be returned to the appellant within two months. The appeal was disposed of with no order as to costs, and both parties were informed accordingly.
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2013 (10) TMI 1584
Issues:
Stay of Impugned Order & waiver of pre-deposit of penalty amount under FERA, 1973 & ECM, 1987.
Analysis:
The judgment by the Appellate Tribunal for Foreign Exchange, New Delhi involved the applicants/appellants seeking a stay of the Impugned Order and waiver of pre-deposit of a penalty amount imposed for contraventions of FERA, 1973, and ECM, 1987. The applicants were a foreign bank merged with another bank, and retired officers of the bank. The applicants argued for dispensation of the penalty amount, citing no breach of FERA guidelines and financial inability to pay the penalty. They emphasized a good case on merits and balance of convenience in their favor. The applicants relied on various judgments to support their contention.
On the other hand, the respondent contended that the applicants focused on merits while admitting contraventions of FEMA. The respondent argued against waiver of pre-deposit, emphasizing the need to establish undue hardship as a condition precedent. The respondent cited a judgment by the Supreme Court to support their argument.
After hearing arguments, the Tribunal discussed the legal position regarding undue hardship and safeguarding penalty realization as per relevant judgments. The Tribunal granted dispensation of pre-deposit of the penalty amount to the applicants/appellants, subject to specific payment percentages within a specified timeframe. The Tribunal directed compliance with the order within 30 days, failing which the Appeals would be dismissed for non-compliance. The next hearing was scheduled for compliance reporting and further proceedings, with no costs imposed.
In conclusion, the judgment addressed the issues of stay of the Impugned Order and waiver of pre-deposit of the penalty amount under FERA, 1973, and ECM, 1987. The Tribunal granted dispensation of pre-deposit with specific payment conditions, emphasizing compliance within the given timeframe to avoid dismissal of the Appeals. The judgment provided a detailed analysis of the arguments presented by both parties and applied relevant legal principles to reach a decision on the matter.
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2013 (10) TMI 1006
Application for compounding - Right to appeal - Held that:- if the interim stay of the order dated 7 August 2013 is not granted and if the petitioner does not file an Appeal under Section 17/19 of the Act, the petitioners will loose its right of appeal. If the petitioners file an appeal they will loose the right to have their application for compounding considered. In view of the above, till the respondents file the affidavit in reply and the matter is finally heard, the petitioners rights cannot be foreclosed on both fronts. In view of the above, there shall be interim stay of the impugned order dated 7 August 2013 till further orders.
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9911796707
