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FEMA - Case Laws
Showing 521 to 540 of 1378 Records
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2013 (2) TMI 396
Violation of FERA - Whether process of purchase of tickets of appellant was a commercial arrangement that was legally permissible? - Appellant carries on a travel agency and specialises in booking of tickets for crew members working on ships - assessee contested for suffering from any illegality or material irregularity causing prejudice - Held that:- No such illegality or irregularity has been demonstrated. That apart delayed pronouncement of the order by the Adjudicating Authority was not urged as a ground of challenge before the Tribunal or the High Court both of whom have remained silent on this aspect. Even on the question of prejudice it is find that the contention of assessee appeleant to be more imaginary than real. The argument regarding prejudice is founded on the plea that the appellants could not place some of the documents which they have now placed before this Court for consideration. It is further admitted that no application for permission to produce these documents was filed by them before the Adjudicating Authority no matter they could have done so if they really indeed needed to place reliance on such documents. The hearing had been concluded by the Adjudicating Authority in keeping with the requirement of Section 51 and Rule 3 of the Adjudication Rules under FERA thus no irregularity causing prejudice proved.
Bountiful Ltd. was a paper company and its financial control lay in their hands - clear violation of the provisions of FERA - Held that:- The Adjudicating Authority has noticed and relied upon incriminating circumstances like instructions issued by appellant Telestar to Bountiful to remit an amount of ₹ 4,74,033/- to M/s Aarnav Shipping Company towards repairs of MV Rizcun Trader, a ship owned by one of their principals M/s United Ship Management, Hongkong. Similarly a payment of US$ 12500/- made from Bountiful Account to Mustaq Ali Najumden is also evidenced and was made on the instructions of appellant-Shri Rajesh Desai, which the latter explained to be kickbacks paid to overseas shipping company for giving ticketing business to Telestar.
Suffice it to say that there may be sufficient evidence on record for the Adjudicating Authority and the Tribunal to hold that the appellants were indeed guilty of violating the provisions of FERA that called for imposition of suitable penalty against them. It was not the case of the appellants that the findings were unsupported by any evidence nor was it their case that the statements made by the appellants were un-corroborated by any independent evidence documentary or otherwise. In the circumstances, therefore, no reason to interfere with the concurrent findings of fact on the question whether Bountiful was or was not a paper company controlled by the appellants from India.
Non granting of opportunity to cross examine the witness - violating the principles of natural justice - Held that:- Adjudicating Authority has mainly relied upon the statements of the appellants and the documents seized in the course of the search of their premises. But, there is no dispute that apart from what was seized from the business premises of the appellants the Adjudicating Authority also placed reliance upon documents produced by Miss Anita Chotrani and Mr. Raut. These documents were, it is admitted disclosed to the appellants who were permitted to inspect the same. The production of the documents duly confronted to the appellants was in the nature of production in terms of Section 139 of the Evidence Act, where the witness producing the documents is not subjected to cross examination. Such being the case, the refusal of the Adjudicating Authority to permit cross examination of the witnesses producing the documents cannot even on the principles of Evidence Act be found fault with. At any rate, the disclosure of the documents to the appellants and the opportunity given to them to rebut and explain the same was a substantial compliance with the principles of natural justice. That being so, there was and could be no prejudice to the appellants nor was any demonstrated by the appellants before us or before the Courts below. The third limb of the case of the appellants also in that view fails and is rejected.
The Adjudicating Authority had imposed a higher penalty & the Tribunal has already given relief by reducing the same by 50%. Keeping in view the nature of the violations and the means adopted by the respondent to do that, no room for any further leniency. These appeals fail and are, hereby, dismissed with costs assessed at ₹ 50,000/- in each appeal to be deposited within two months with the SCBA Lawyers Welfare Fund.
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2013 (2) TMI 230
Repatriation of Money Appellant acquired the foreign currency by selling his property in Iran - Gave a declaration in CDF when he brought major chunk of foreign currency in January and October, 1999 His vendor sent the money through nineteen persons each getting $ 5000 Further contention of appellant is that he has 180 days to keep the money before en-cashing through an authorized person Held that:- Section 3(c) of the FEMA prohibits any person from receiving foreign currency otherwise than through an authorized person The law requires remittances to be made only through an authorized person as defined in Section 2(c), which means money changer, off-shore banking unit or any person authorized under Section 10(1) to deal in foreign currency or foreign securities.
Regulation 5 of the Repatriation Regulations which obliges any person to sell the realized foreign exchange to an authorized person within seven days from the date of its receipt - Appellant un authorizely acquired foreign currencies and retained the currency in contravention of relevant Regulations.
Appellant got the foreign currency towards consideration of sale of his immovable property in Iran. Even if such a transaction is assumed to be true, he could not have got or received the money the way he got - No agreement was produced and the affidavit filed by the buyer did not give the details of the amount sent through nineteen (19) persons Appeal fails and is accordingly dismissed Against the assessee.
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2013 (2) TMI 201
Order of preventive detention - writ to release of the detenue by quashing detention orders - intelligence unit contraband fake noteswere recovered from the baggage carried by the detenue - Held that:- When a passport of the detenu was retained with the Customs department, the likelihood of the detenu indulging in the smuggling activities was foreclosed. Impounding the passport of the detenu was enough to curb the potentiality of the smuggling, and therefore there was no justification to pass order of preventive detention when there was no chance of the detenu travelling to foreign country without passport.
As decided in Rekha vs. State of Tamil Nadu [ 2011 (4) TMI 1217 - SUPREME COURT OF INDIA] if the ordinary law of the land (the Penal Code and other penal statutes) can deal with a situation, recourse to a preventive detention law will be illegal. Principle emanating from the frame work of the Constitution of India assuring personal liberty and giving fundamental rights to each citizen of India is that the order of the preventive detention being exceptional measure by way of social defence ought to be used with great deal of care and circumspection.
Applying the principle to the case on hand it is concluded that the impugned order of preventive detention passed in the present case is faulty, caution less and unsustainable Preventive detention orders quashed.
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2013 (2) TMI 39
Breach of principles of natural justice - non providing of cross-examine of the persons whose statements have been supplied - petitioners were charged with contravention of the provisions of Section 42 of the FEMA - Held that:- Neither the provisions of FEMA i.e., Section 16 which requires a reasonable opportunity to be given to the party against whom a complaint is instituted or the Adjudication Rules, in particular Rule 4 (5), oblige the adjudicating authority to grant as of right the opportunity to the noticees to cross-examine the persons who may have given statements explaining a transaction. The provisions of Section 16 of the FEMA and Rule 4 of the Adjudication Rules do not explicitly advert to this aspect, therefore, much would depend on the discretion of the adjudicating authority as he progress with the enquiry. See M/s. Kanungo and Company Vs. Collector of Customs and Others [1972 (2) TMI 35 - SUPREME COURT OF INDIA]
On a fair reading of the statute and the Rules suggests that there is no duty of disclosure of all the documents in possession of the Adjudicating Authority before forming an opinion that an inquiry is required to be held into the alleged contraventions by a noticee. Even the principles of natural justice and concept of fairness do not require the statute and the Rules to be so read. Any other interpretation may result in defeat of the very object of the Act. Concept of fairness is not a one way street. The principles of natural justice are not intended to operate as roadblocks to obstruct statutory inquiries. Duty of adequate disclosure is only an additional procedural safeguard in order to ensure the attainment of the fairness and it has its own limitations. The extent of its applicability depends upon the statutory framework.Thus at this stage, it cannot be stated that mere denial of the request for cross-examination has led to breach of principles of natural justice and thus, warranting an intercession by this court under Article 226 of the Constitution of India.
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2013 (1) TMI 776
Issues involved: Disposal of writ petition, examination of prayer, status report submission, irregularities found, criminal investigation necessity, use of fund in political activity, closure of the matter.
Disposal of writ petition: The writ petition was disposed of by directing the examination of the prayer made in the petition by respondent No. 1, with a suitable decision to be taken thereafter. A subsequent direction was sought to call the Status Report from the respondent, which was filed in compliance with the court's order. The petitioner, an Advocate, failed to appear on multiple occasions despite adjournments, leading to the court deeming it inappropriate to further adjourn the matter.
Status Report and Irregularities: The Status Report filed by the respondent revealed that only a few irregularities were found, which were not deemed serious enough at that stage to warrant a criminal investigation. It was noted that no documentary proof in the record of the Association was found to indicate the use of the fund in any political activity or movement. Given that the writ petition had already been disposed of and a Status Report had been submitted, the court found no reason to keep the matter pending.
Closure of the Matter: After perusing the Status Report and considering the lack of serious irregularities warranting criminal investigation, the court decided to close the matter, concluding that there was no justification for further prolonging the case.
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2013 (1) TMI 392
Failure to comply with the summons issued u/s 37 - investigations being carried out against him for violation of the provisions section 13 of the FEMA - action of revocation of passport of the petitioner under section 10(3)(c) of the Passports Act, 1967 - Held that:- The DOE investigation had revealed that the petitioner as the Chairman of the Governing Council of the IPL of the Board of Control for Cricket in India (in short BCCI), had committed gross irregularities in the conduct of the IPL tournaments, leading to fraudulent activities in violation of FEMA, had led to the siphoning of funds to the extent of hundreds of crores of rupees, which apparently he was suspected to have parked outside India.
In response to the first summon, issued on 02.08.2010, as replied by petitioner vide communication dated 07.08.2010, delivered on 09.08.2010, that there was an apprehension of threat to the petitioner's life. The concerned authority not being convinced, sought further details, from the petitioner vide communication dated 13.08.2010. It is at this stage that the petitioner referred to the threat assessment made by the Mumbai Police, with regard to the petitioner's safety, and the provision made for his security, while he was in Mumbai. The concerned authority, not being persuaded, by the material supplied and the reasons put forth, issued a second summon to the petitioner under Section 37 on 24.08.2010, requiring the petitioner to appear before him, on 07.09.2010. Admittedly, the petitioner did not appear before the concerned authority, and trotted out the same reasons, i.e., threat to his life. It is at this stage that a complaint under Section 16(3) of the FEMA was filed, on 16.09.2010. Notice in this complaint was issued on 20.09.2010.
The DOE, in the background issued a communication to the APO as received by him on 05.10.2010, to take action for revocation of the petitioner's passport under Section 10(3)(c) of the Passports Act who in turn sought an explanation as to why, action ought not to be initiated under Section 10(3)(c) of the Passports Act. Admittedly, the petitioner did not present himself either in response to the summons issued by the DOE nor in response to the show cause notice dated 15.10.2010. Replies were filed, however, on behalf of the petitioner on 12.10.2010, followed by several other communications demanding the material on the basis on which the passport authorities were proceeding to take action in the matter.
Thus by virtue of the impugned order, the passport authority, came to the conclusion that the reply did not answer the main charge made against the petitioner, which is, his failure to present himself in person, in response to the summons issued under Section 37 of FEMA. The copies of the summons issued under Section 37 of FEMA, and the complaint filed under Section 16(1) of FEMA were admittedly available with the petitioner. Therefore, the action of the RPO under the Passport Act, which invested upon him, amongst others, the power to impound/ revoke the passport, was clearly within the scope of the show cause notice dated 15.10.2010.
Briefly perusing the provisions of clauses (a) to (h) of Sub-Section 3 of Section 10 of the Passport Act provides for various eventualities under which a passport authority has been invested with the power to impound or cause to be impounded or revoke a passport or a travel document. Some of these powers pertain to circumstances which require either direct determination by the passport authorities of the fact situation and / or require the passport authority to seek or receive inputs from other statutory authorities with regard to the eventuality referred to the clause in issue. Therefore, having regard to the fact that the APO received information on 04.10.2010, which was actionable, provided the necessary jurisdictional facts to exercise power under Section 10(3)(c) of the Passports Act.
Section 131 of the Income Tax Act, which is a precursor to Section 132 of the Income Tax Act, empowers an Income Tax Officer, and thus by implication an officer of the DOE, to enforce the attendance of the persons who have violated the provisions of the Income Tax Act, and by necessary implication the provisions of FEMA, and are therefore necessarily the noticees in the said proceedings. The statute quite clearly, thus empowers the officers of the DOE exercising powers under Section 37 to take recourse to the provisions of Section 32 of the CPC, even against the noticee, like the petitioner, and not just the witnesses - The right to have interminable hearings, as demanded by the petitioner, cannot be a ground to lay challenge to the impugned order on the ground of breach of principles of natural justice.
Argument that show cause notice was issued by one authority i.e., the APO while the impugned order dated 03.03.2011 was passed by the another i.e., the RPO hence breached the principles of natural justice is misconceived as it is seen that against item no. 7A(a) of Schedule I the RPO (Mumbai) is also described as a passport authority alongwith the APO. Therefore, it is not as if the RPO does not have the necessary power invested in him in Section 10(3)(c) of the Act. This is not a case where a hearing was held by the APO and the impugned order was passed by the RPO. This is a case where show cause notices were issued by the APO, while hearing in the matter was held by a superior officer, i.e., the RPO. Therefore, this argument is also not tenable.
Argument that the relevant material which formed the basis for issuing the show cause notice was not supplied is also not quite correct as APO vide letter dated 01.11.2010, admittedly had given extracts of the material, which was supplied by the DOE to him. The receipt of the said letter is not denied by the petitioner. It is also not denied by the petitioner that he was made available the complaint filed by the DOE under Section 16(3) of FEMA. The petitioner was well aware of the charge against him and the material which formed the basis of the charge, and therefore, cannot be heard to plead that he had not been supplied with the requisite material to answer the charge.
Argument of no right was given to cross-examine officers of DOE, is also untenable as that there is no inalienable right to cross-examine, it is not unknown to law that proceedings can be decided based on documents, especially documents which form the basis of the decision are not in dispute. And while the petitioner chooses to keep himself from his investigators, he seeks to subject his investigators to cross-examination, a request if granted would really turn the situation on its head.
Thus as the petitioner has refused to surrender the passport, therefore, in the absence of the passport being available with the authorities concerned, the only order which could have been passed in the given circumstances was of revocation. For the reasons given hereinabove, no merit in the petition - Writ dismissed.
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2013 (1) TMI 374
Penalty imposed upon the partners of firm - Whether Tribunal was justified in deleting the penalty imposed upon the partners of the firm on the ground that the penalty against the firm has been confirmed - Held that:- Following the decision in case of Overseas Textiles Corporation (2012 (9) TMI 388 - BOMBAY HIGH COURT) that in absence of lapses/negligence/mala fides on the partners of the firm in realizing the export proceeds, imposition of penalty, against the partners is unjustified especially when the penalty imposed against the firm has been confirmed - In favour of assessee
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2013 (1) TMI 128
Condonation of delay 166 days - Period of limitation - Section 35 Foreign Exchange Management Act, 1999 - Section 5 of the Limitation Act Order VIII Rule 1 CPC - Appellant is a resident outside Delhi and has limited means - Arrange necessary funds for the purpose of filing the appeal - Due to shifting of the Advocates office, the file of the writ petition could not be traced - Some delay in tracing out the file - Held that:- Following the decision in case of Kailash Versus Nanhku & Ors.(2005 (4) TMI 542 - SUPREME COURT) that the right of appeal is a substantive right whereas the law of limitation is a procedural law and thus the procedural law cannot override the substantive right. If there is sufficient cause for condoning the delay, this Court will exercise its powers and ensure that substantive justice is assured to the parties.
The grounds taken for condonation of delay are that after the dismissal of the writ petition, the Petitioner had to arrange for funds and thereafter file of the writ petition got misplaced in the office of the counsel. It may be noted that the Appellant was pursuing his remedies with due diligence as immediately after the order of the Tribunal dated 2nd February, 2007 he filed a writ petition before the High Court of Gujarat in May, 2007 and on the return of the said petition for want of territorial jurisdiction a writ petition was filed before this Court on 29th September, 2007. Thus, a party who has been all through pursuing his remedies cannot be non-suited on the count that the period of limitation prescribed under Section 35 of the FEMA is mandatory. Hence delay condoned. In favour of assessee
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2013 (1) TMI 58
Whether High Court, exercising the power u/s 407 of Cr.P.C. read with Article 227 and 235 of the Constitution of India is competent to take decision that cases under FERA/FEMA shall be tried by a Special Judge Whether State Government has absolutely jurisdiction to authorize Special Judge to try cases under FERA Act 1973 - Petitioner argued that there was no necessity to transfer the case, filed under FERA before C.J.M., to the Special Judge
Held that:- Having perused Section 407 Cr.P.C. and Article 227 and 235, I have no hesitation to hold that this Court either in the administration side or in the judicial side has absolute jurisdiction to transfer any criminal cases pending before the one competent court to be heard and decide by another court within the jurisdiction of this Court.
This Court has absolute jurisdiction in administration side as well as in judicial side to transfer any pending criminal case from one competent court to another competent court, therefore, merely because impugned notification dated 17.05.2002 got to be issued pursuant to the decision of Full court dated 25.04.2002 shall have no adverse effect on the jurisdiction of Special Judge hearing the Fodder Scam cases to try the present criminal complaint under the FERA. In favour of respondent
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2012 (12) TMI 1176
Issues Involved:
1. Challenge to the order of detention dated 11.06.1976 under COFEPOSA.
2. Application of res judicata due to withdrawal of earlier petitions.
3. Legality of proceedings under SAFEMA initiated based on the detention order.
Summary:
1. Challenge to the Order of Detention:
The appellant challenged the dismissal of their Special Civil Application No. 3716 of 1995, which sought to quash the detention order dated 11.06.1976 under COFEPOSA and subsequent proceedings under SAFEMA. The detention order was initially revoked after the emergency was lifted on 21.03.1977, and no challenge was made during its subsistence. The Supreme Court's decision in Attorney General For India vs. Amratlal Prajivandas (1994) 5 SCC 54 was pivotal, stating that if the order of detention was not challenged during its subsistence, it could not be challenged later during SAFEMA proceedings. The High Court upheld this view, emphasizing that the legality and validity of the detention order could not be contested post-revocation if not challenged during its operative period.
2. Application of Res Judicata:
The learned single Judge ruled that the withdrawal of Special Civil Application No. 1276 of 1977 did not bar subsequent petitions on the ground of res judicata. However, the core issue was whether the detention order could be challenged after its revocation. The Court held that since the order was not contested during its effective period, subsequent challenges were impermissible, aligning with the Supreme Court's interpretation in the Attorney General For India case.
3. Legality of Proceedings under SAFEMA:
The appellants argued that the detention order's legality should be assessed on merits during SAFEMA proceedings. They cited various Supreme Court cases, including Competent Authority, Ahmedabad vs. Amritlal Chandmal Jain (1998) 5 SCC 615, which allowed for such challenges if the detention order was not previously adjudicated on merits. However, the Court distinguished these cases, noting that in those instances, the detention orders were challenged during their validity but were later dismissed as infructuous. Since the appellants did not challenge the detention order during its validity, they could not contest it during SAFEMA proceedings.
Conclusion:
The High Court dismissed the Letters Patent Appeal, reinforcing that the detention order dated 11.06.1976 could not be challenged post-revocation as it was not contested during its operative period. The Court imposed exemplary costs of Rs. 25,000 on the appellants for repeatedly delaying proceedings.
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2012 (12) TMI 590
Remittance out of India without having imported any goods on the basis of the forged bogus documents. - allegation based on statement - held that:- the Adjudicating authority has in her order very clearly rerecorded as a fact that there is no retraction on record. In case, there has been any retraction the appellant would have challenged the same and produced the retraction before the Tribunal or called upon the respondents to produce the retraction which according to him was in possession of the respondent. However, no such exercise or even an attempt to the same appears to have been carried out before the Tribunal.
Order of tribunal directing the appellant to pre deposit 50% of the penalty amount i.e. Rs. 25 lacs out of Rs. 50 lacs imposed by the Adjudicating authority sustained.
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2012 (12) TMI 557
Whether the Tribunal was justified in directing the appellant to deposit 50% of the penalty Rs. 35 lacs imposed by the Adjudicating Authority for the purposes of hearing the appellant's appeal under the Foreign Exchange Regulation 1973 ('FERA 1973') on merits? - held that:- The emphasis before the Tribunal on the part of the appellant appears to have been financial hardship and for that purpose had filed an affidavit contending that he is in no position to deposit the penalty amount and in support thereof contends that he is even not an Income Tax assesee. This is difficult to accept in the light of the appellant's contention that he was an independent person and was carrying on import business on his own and in that regard had remitted and amount of US$ 29,91,100/- during the period January to April 1991 on his own.
The order of the Tribunal dated 25/1/2008 directing the appellant to deposit 50% of the penalty amount i.e. Rs.17.50lacs out of Rs.35lacs imposed upon him is reasonable.
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2012 (12) TMI 396
Master Circular on Wilful Defaulters - dis-closer of information by the Bank to RBI - Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 - held that:- no force in the submission that any information relating to a party who has defaulted in payment of its dues under derivative transactions cannot be disclosed by a bank to the RBI or any other bank because of an implied contract between the bank and its customer or by Section 45E of the 1934 Act. Sections 45C and 45E of the 1934 Act.
Information relating to a party who has defaulted in payment of its dues under derivative transactions to the bank is credit information within the meaning of Section 45A(c)(v) of the 1934 Act. Sub- section (1) of Section 45C of the 1934 Act provides that the RBI may at any time direct any banking company to submit to it such statements relating to such credit information and in such form and within such time as may be specified by the RBI from time to time. Hence, information relating to a party, who has defaulted in payment of its dues under derivative transactions being credit information may be called for from the banking company by the RBI under sub-section (1) of Section 45C of the 1934 Act.
No force in the submission that the Master Circular has penal consequences and, therefore, has to be literally and strictly construed.
Constitutional right of a person under Article 19(1)(g) - held that: - No challenge was made by the writ petitioners before the Bombay High Court to the constitutionality of the Master Circular and the challenge by the writ petitioners before the Calcutta High Court was to the constitutionality of only Paragraph 3 of the Master Circular relating to the Grievance Redressal Mechanism. Hence, we are not called upon to decide in these appeals whether the Master Circular violates the right of a person under Article 19(1)(g) of the Constitution of India.
Master Circular covers not only wilful defaults of dues by a borrower to the bank but also covers wilful defaults of dues by a client of the bank under other banking transactions such as bank guarantees and derivative transactions.
Wilful defaults of parties of dues under a derivative transaction with a bank are covered by the Master Circular and this we hold not because the RBI wants us to take this view, because this is our judicial interpretation of the Master Circular.
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2012 (11) TMI 971
Whether appeals before the Tribunal against the order of the adjudicating authority had to be treated by the Tribunal under the provisions of FERA or FEMA Held that:- Order has been passed in the adjudication proceeding on 11th October, 2007 under the FERA after cognizance had been taken under the provisions of FERA. In view of this, the correctness, legality and proprietary of the order passed by the adjudicating authority has to be challenged in continuation of the proceeding under the FERA and has to be adjudicated under the provisions of FERA - cognizance having been taken within the sunset period and the adjudication proceeding carried out under the provisions of FERA, substantive provisions of FERA would alone be applicable - appeal filed before it was to be governed under the provisions of FERA
Whether Tribunal has power to condone the delay beyond the period of 90 days - provisions of Section 35 of the Central Excise Act - Held that:- Provision of law stipulates a period of 60 days for filing an appeal; under the proviso another 30 days can be added to this period; the delay in filing the appeal can be condoned after the expiry of the 60 days yet the period of delay could not be condoned beyond 90 days - there is a complete exclusion of Section 5 of the Limitation Act - Tribunal has no power to condone the delay beyond the period of 90 days while dealing appeals under the FERA - appeals are dismissed
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2012 (11) TMI 921
Writ petition maintainability of appeal penalty under Section 13 (1) of the FEMA - contravention of the provisions under Section 6 (3)(j) of the Act alleged that petitioners offered personal guarantee for a loan amount of US$ 13.5 Million to a resident outside India without obtaining prior permission from the Reserve Bank of India Held that:- Liability of the appellant is not created under any common law principle but, it is clearly a statutory liability and for which the statutory remedy is an appeal under Section 35 of FEMA, subject to the limitations contained therein - writ jurisdiction under Article 226 should not have been invoked without availing the alternative remedy provided under Section 128 and 129A of the Customs Act for the reason that the appellate authority under the statute is vested with the power to appreciate the factual aspects and the petitioner can very well establish his right before the said authority - in fiscal matters, there should not be short-circuiting of the statutory remedies- writ petition is not maintainable and accordingly, the same is dismissed
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2012 (11) TMI 879
Waiver of pre-deposit undue hardship alleged that said to have received an amount from persons working in Kuwait in contravention of Section 9(1)(b) and are also said to have made payments in contravention of Section 9(1)(d) of Foreign Exchange Regulation Act, 1973 Held that:- For a hardship to be undue it must be shown that the particular burden to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it. - The word undue adds something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant.
The other aspect relates to imposition of conditions to safeguard the realisation of penalty. This is an aspect which the Tribunal has to bring into focus. It is for the Tribunal to impose such conditions as are deemed proper to safeguard the realisation of penalty. Therefore, the Tribunal while dealing with the application has to consider materials to be placed by the assessee relating to undue hardship and also to stipulate conditions as required to safeguard the realisation of penalty.
Undue hardship As per Section 50 of FERA, the penalty shall be upto five times of the alleged violation.
Even though the alleged contravention by the appellant is to the extent of more than Rs.5 Crores, the adjudicating authority/Additional Commissioner imposed only a penalty of Rs.1.25 Crores. The Appellate Tribunal has directed the appellant to deposit 5% of the penalty amount - there is no improper exercise of discretion to entertain this appeal. It cannot be said that the impugned order has caused undue hardship to the appellant warranting interference with the order
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2012 (11) TMI 831
Pre-arrest bail Purchase of land by Non resident - Violation of provisions of FEMA (Foreign Exchange Management Act) - William Singh Sandhu is a citizen of United States of America and is not an Indian citizen. There are restrictions in law on his right to purchase agricultural land in India. He has purchased agricultural land in India by giving the address of Gurvinder Singh as his address. William Singh Sandhu has already been arrested in the case and is said to have been released on regular bail. - While Gurvinder Singh is the attorney of the vendor who has no grouse in the matter, the other petitioner is the attesting witness of the sale deed - custodial interrogation of the petitioners is required in this case - case is based on documentary evidence for its proof. When William Singh Sandhu, the main accused has already been arrested and released on bail, the petitioners appear to be entitled to pre-arrest bail - interim anticipatory bail to petitioner allowed
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2012 (11) TMI 784
Money transactions - whether offence under FEMA is made out or not Held that:- Investigation is still at the initial stage, the FIR cannot be quashed at the threshold - allegations in the FIR itself are to the effect that the petitioner is indulging in hawala money transactions remitting the money from foreign country through illegal channels - Court cannot comment on the merits of the case at this stage without there being any clarification and the evidence on of record - no ground is made out at this stage for quashing of the impugned FIR.
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2012 (10) TMI 1186
Issues involved: Challenge to penalty imposed under FERA Act, delay in communication of order, applicability of FEMA Act, limitation period under Section 49(3) of FEMA Act.
The writ petition challenges a penalty imposed on the petitioner under the Foreign Exchange Regulation Act, 1973 (FERA Act) due to a delay in communication of the order. The main contention is the applicability of the Foreign Exchange Management Act, 1999 (FEMA Act) and the limitation period under Section 49(3) of the FEMA Act.
Challenge to Penalty under FERA Act:
The petitioner was penalized for obtaining foreign exchange for import of goods but failing to provide evidence of actual imports and not complying with regulations under FERA Act. The order imposing the penalty was communicated after a significant delay, raising concerns about procedural fairness.
Applicability of FEMA Act and Limitation Period:
The challenge is based on the repeal of FERA Act and the enforcement of FEMA Act, which requires contraventions under FERA Act to be addressed within two years from the commencement of FEMA Act. The petitioner argues that since no notice of contravention was served before the impugned order, the proceedings are invalid. However, the court notes that the alleged contravention was taken notice of before the expiry of the limitation period specified in Section 49(3) of the FEMA Act.
Court Decision:
The High Court dismisses the writ petition, directing the petitioner to pursue the available appellate remedy before the Appellate Tribunal under Section 19 of the FEMA Act. The court refrains from making a conclusive decision on the limitation issue, emphasizing the need for the petitioner to exhaust statutory remedies.
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2012 (10) TMI 506
SAFEMA - notice in respect of illegal flat to assessee and his wife holding 50 per cent share in the subject property - whether appellants who purchased the subject flat during pendency of forfeiture proceedings are entitled to an opportunity to prove that they are transferees in good faith for adequate consideration ? - Held that:- Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) came into effect from 05.11.1975 provides for forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators. Where the competent authority is satisfied that some of the properties referred to in the show-cause notice are illegally acquired it shall declare that such property shall, subject to the provisions of this Act, stand forfeited to the Central Government free from all encumbrances. Section 8 provides that burden of proving that property specified in the notice served under Section 6 is not illegally acquired property shall be on the person affected.
Admittedly, SAFEMA was applicable to both vendors here. One of the vendors, a detenu, who was covered by Section 2(2)(b), was issued notice way back on 8.12.2003 under Section 6(1) of SAFEMA. The other vendor, wife of the detenu, was also issued notice under Section 6(1) in 2004 once it transpired that she held 50% share in the said flat. Both vendors were served with notices under Section 6(1) before transaction of sale in favour of the appellants. After the issuance of notices under Section 6(1) of SAFEMA to the vendors, the transaction of sale in favour of the appellants has to be ignored by virtue of Section 11 and on passing of the order of forfeiture under Section 7, the sale in favour of the appellants had become null and void. The order of forfeiture dated 23.06.2005 under Section 7 of SAFEMA relates back to the issuance of first notice under Section 6(1) to one of the vendors.
In respect of a transfer after issuance of notice under Section 6, the property referred to therein, the holder cannot set up plea that he is a transferee in good faith or a bona fide purchaser for adequate consideration. Such plea is not available to a transferee who has purchased the property during pendency of forfeiture proceedings - the protection given to a bona fide sale under Section 2(2)(e) would not extend to a sale made subsequent to the issuance of notice under Section 6 and in violation of Section 11 of SAFEMA. The title in the subject flat is deemed to have vested in the Central Government on or about 08.12.2003 when the first notice under Section 6(1) was issued and served on one of the vendors. The vendors ceased to have any title in the subject flat on the date of transfer i.e. 10.02.2005. They had no transferable right. The appellants cannot claim any right in the flat.
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