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FEMA - Case Laws
Showing 581 to 600 of 1378 Records
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2011 (4) TMI 1435
Provisional order of attachment u/s 5(1) of the Prevention of money Laundering Act, 2002 (PMLA) - notice u/s 8 facts of the case - In connection with the petitioner's activities in forging documents and forging records in the name of non existing companies for the purpose of getting loan from the Bank, criminal cases were registered against the petitioner. The offence committed by the petitioner is covered by PMLA and investigation was undertaken by the second respondent Enforcement Directorate. It was thereafter, the provisional attachment order was made. The complaint u/s 5(5) of PMLA for Provisional Attachment was filed by the second respondent Deputy Director of Enforcement before the first respondent Adjudicating Authority. The first respondent on considering the complaint had issued a show cause notice u/s 8 of PMLA to the petitioner for his appearance before the first respondent calling him to show cause to his source of income, out of which or by means of which the provisionally attached movable properties were acquired. The petitioner instead of appearing before the first respondent has filed the present writ petition challenging the provisional attachment order as well as the case filed against him.
HELD THAT:- In the present case, by attachment of property made by the second respondent, the petitioner is not bound to lose anything and he cannot be said to be prejudiced. On the other hand, by virtue of Section 5(3), every order of attachment made u/s 5(1) of the PMLA will lose its efficacy either after 150 days or after an order passed u/s 8(2) of the PMLA. Therefore, it is only the petitioner instead of approaching the first respondent Adjudicating Authority who had initiated proceedings u/s 8(1), had rushed to this court. Even if the attachment is made final, u/s 26, an appeal lies to the Appellate Tribunal. Therefore, the petitioner must submit his explanation to the Adjudicating Authority and convince it that the amount sought to be attached was not obtained due to any money laundering and that it was the legally earned income. Even if he fails before the first respondent, there is time enough for challenging the same before the judicial appellate Tribunal constituted u/s 26 of the PMLA. When the Act itself provides for an inbuilt remedy, it is not open to the petitioner to rush to this Court at the stage of provisional attachment, which is yet to be confirmed by the Adjudicating Authority.
Therefore, the writ petition filed by the petitioner must necessarily fail.
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2011 (4) TMI 1300
Issues Involved:
1. Interpretation and application of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA).
2. Validity of orders of forfeiture passed under SAFEMA in respect of properties standing in the names of relatives of the detenue/convict.
3. Compliance with legal requirements and principles of natural justice in the issuance of notices under Section 6(1) of SAFEMA.
4. Requirement of establishing a link or nexus between the property sought to be forfeited and the illegally acquired assets of the convict/detenue.
5. Validity of proceedings and orders of forfeiture based on defective notices under Section 6(1) of SAFEMA.
Detailed Analysis:
1. Interpretation and Application of SAFEMA:
SAFEMA was enacted to provide for the forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators. The Act applies to relatives of detenues/convicts and aims to prevent smuggling and clandestine operations by depriving such persons of their illegally acquired properties. The relevant provisions include definitions, prohibition of holding illegally acquired property, notice of forfeiture, burden of proof, and powers of the competent authority and Appellate Tribunal.
2. Validity of Orders of Forfeiture:
The constitutional validity of SAFEMA and its application to relatives and associates of detenues/convicts was upheld by the Supreme Court in Attorney General of India vs. Amratlal Prajivandas. The Court held that the Act's purpose is to reach properties of the detenue/convict, wherever they are held, and not to forfeit independent properties of relatives/associates unless they are linked to the convict's illegal activities.
3. Compliance with Legal Requirements and Principles of Natural Justice:
The issuance of notices under Section 6(1) of SAFEMA must satisfy three conditions: the value of the property, the known sources of income or assets of the person concerned, and any other relevant information. The reasons for issuing the notice must be recorded in writing and should establish a link between the property and the convict's illegal activities. Failure to meet these requirements renders the notice and subsequent proceedings invalid.
4. Requirement of Establishing a Link or Nexus:
The competent authority must establish a link or nexus between the property sought to be forfeited and the illegally acquired assets of the convict/detenue. The burden of proof lies on the relative/associate to disprove the allegation once the link is established. A roving enquiry is not permitted under the Act, and the reasons for belief must be based on materials gathered during the investigation.
5. Validity of Proceedings and Orders Based on Defective Notices:
In the cases examined, the notices issued under Section 6(1) were found to be defective due to non-application of mind, failure to establish the required link or nexus, and lack of specific details about the value of the property and sources of income. The use of printed formats without striking off irrelevant portions indicated non-application of mind. Consequently, the orders of forfeiture based on such defective notices were set aside.
Case Analysis:
W.P.No.26466 of 2001:
The petitioner, a relative of the convict, challenged the forfeiture of properties. The notice under Section 6(1) was a printed format with irrelevant portions not struck off, indicating non-application of mind. The reasons recorded did not establish a link between the properties and the convict's illegal activities. The Court held that the notice did not satisfy the legal requirements and set aside the forfeiture order, allowing the respondents to initiate fresh proceedings if advised.
W.P.No.7609 of 2001:
The petitioner, the wife of the detenue, challenged the forfeiture of properties. The notice under Section 6(1) was found to be defective as it did not establish the required link or nexus. The reasons recorded were insufficient, and the proceedings were held to be vitiated. The Court set aside the forfeiture order, emphasizing the need for scrupulous compliance with statutory requirements.
Conclusion:
The judgments underscore the importance of adhering to legal requirements and principles of natural justice in forfeiture proceedings under SAFEMA. The competent authority must establish a clear link between the properties and the convict's illegal activities, and any defect in the notice under Section 6(1) invalidates subsequent proceedings. The orders of forfeiture were set aside, with liberty to initiate fresh proceedings if done in accordance with the law.
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2011 (4) TMI 489
Whether the Appellate Tribunal constituted under the FEMA, 1999 was right in rejecting a belated appeal filed under Section 19 of FEMA, applying the first proviso to sub-section (2) of Section 52 of Foreign Exchange Regulation Act, 1973 - Held that: the right of appeal under FEMA has already been saved in respect of cause of action which arose under FERA however subject to the proviso to sub-section (2) of Section 19, in the case of belated appeals - Section 49 of FEMA does not seek to withdraw or take away the vested right of appeal in cases where proceedings were initiated prior to repeal of FERA on 1-6-2000 or after - the time limit prescribed under FERA was taken away under the proviso to sub-section (2) of Section 19 and the Tribunal has been conferred with wide powers to condone delay if the appeal is not filed within forty-five days prescribed, provided sufficient cause is shown - Appeal is allowed by way of remand to Tribunal
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2011 (3) TMI 1714
Issues Involved:
1. Non-placement of retractions before the detaining authority.
2. Impact of non-supply of documents on the detenu's right to representation.
3. Reliance on statements made u/s 108 of the Customs Act, 1962.
Summary:
1. Non-placement of retractions before the detaining authority:
The primary issue was that the retractions of statements made by Lokesh Garg on 11.03.2010 and the detenu on 15.06.2010 were not placed before the detaining authority. The court noted that the detaining authority's decision was significantly influenced by the statements of 09.03.2010 and 14.06.2010. The failure to present the retractions, which were critical to the detaining authority's subjective satisfaction, vitiated the detention order. The court emphasized that indirect references in the reply to the bail application could not substitute for direct retractions. Citing precedents like Ashadevi v. K. Shivraj and Deepak Bajaj v. State of Maharashtra, the court held that non-placement of retractions before the detaining authority invalidated the detention order.
2. Impact of non-supply of documents on the detenu's right to representation:
The detenu argued that the non-supply of Lokesh Garg's retraction and other requested documents adversely affected his right to make a representation. The court found merit in this argument, noting that the detenu's ability to challenge the detention was compromised due to the lack of access to crucial documents.
3. Reliance on statements made u/s 108 of the Customs Act, 1962:
The court observed that the detaining authority heavily relied on the statements made u/s 108 of the Customs Act, 1962, particularly the statements dated 09.03.2010 and 14.06.2010. The court highlighted that the retractions of these statements were not considered, which could have influenced the detaining authority's decision. The court rejected the respondents' argument that the subsequent unretracted statement of 23.07.2010 could independently sustain the detention order, noting the interconnected nature of the statements.
Conclusion:
The court quashed the detention order dated 27.08.2010 against the detenu, directing his immediate release unless required in another case. The writ petition was allowed, with no order as to costs.
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2011 (3) TMI 1493
Issues:
1. Imposition of penalties on three appellants by Assistant Director, Enforcement Directorate.
2. Death of one of the appellants and its impact on the appeal.
3. Allegations of outstanding amount of US dollars against the appellants for exporting goods to Hungary.
4. Contention regarding the outstanding amount being less than 5% of the invoice value.
5. Efforts made by the appellants to realize the outstanding amount.
6. RBI instructions regarding unrealized foreign exchange and their applicability in the case.
Analysis:
1. The judgment by the Appellate Tribunal for Foreign Exchange addresses the imposition of penalties on three appellants by the Assistant Director, Enforcement Directorate. The penalties were imposed based on an order dated 18-4-1991, with different amounts levied on each appellant.
2. Following the death of one of the appellants, N.K. Wasan, on 23-6-1998, the issue of abatement arose as no application for bringing his heirs was filed. Consequently, Appeal No. 253/91 was dismissed as abated.
3. The case involved allegations of an outstanding amount of US dollars against the appellants for exporting goods to Hungary. The Show Cause Notice detailed three invoices with outstanding amounts against each, leading to the initiation of the penalty proceedings.
4. A key contention raised by the appellants was that the outstanding amount was less than 5% of the invoice value, which they argued should be considered in light of RBI instructions not to take action for unrealized foreign exchange below this threshold. The appellants highlighted efforts made to recover the amount and pointed out the reduction in price by the Hungary government based on the quality of goods.
5. Efforts made by the appellants to realize the outstanding amount included approaching the RBI for writing off the said amount, sending letters to the Customs Department and Canara Bank, as well as sending fax messages. These actions were presented as evidence of the appellants' attempts to recover the outstanding sum.
6. Considering the argument that the outstanding amount was less than 5% of the invoice value and the efforts made by the appellants, the Appellate Tribunal set aside the impugned order against M/s. Ecco Wasan Shoes (P) Ltd. and Jatinder Wasan. Consequently, Appeal No. 253/91 was abated, while Appeal Nos. 254/91 and 261/91 were allowed based on the findings regarding the outstanding amount and the actions taken by the appellants in this regard.
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2011 (3) TMI 1284
Penalty - Confiscation - contention urged by appellant is that the maximum penalty that could be imposed under Section 13 of the Act cannot exceed Rs. 2,00,000/- and once any penalty is imposed, question of further confiscating the currency involved in contravention of Section 3(a) of the Act is not permissible in law - Held that:- It is open to the Adjudicating Authority to impose any penalty as provided under sub-Section (1) as well as directing confiscation of currency/security/money or property in respect of which the contravention has taken place - Deputy Director was not right in exercising his discretion in ordering release of the seized foreign currency. It is relevant to state that possession of the foreign currency of US $ 20,000 by the appellant was admittedly illegal; he had not traced his possession of the foreign currency to any legitimate source of acquisition - no legal infirmity in the impugned order passed by the Appellate Tribunal to warrant interference - Appeal is dismissed
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2011 (3) TMI 345
Demand - Penalty - Condonation of delay - The validity of section 24 read with Second Schedule to the Act has been assailed on the ground that right to information is a fundamental right and it has to be treated with sanctity and the bar created under the Act is contrary to Article 19(1)(a) of the Constitution of India - Regard being had to the basic principles, which we have stated at the very inception, it is to be seen whether the provision under attack really offends the constitutional principles because of right to seek information under the Act in respect of certain institutions is excluded - As noticed below, Article 19(2) of the Constitution also carves out exception in the matters relating to interests of sovereignty and integrity of India and the security of the State - Article 19(1)(2), which deals with reasonable restriction, mentions a reasonable restriction which pertains to security of the State, integrity of India and public order - the legislature has taken care to see that matters relating to human right violation and corruption are not excluded because they are of paramount concern to any citizen and for the economic growth of the country - we perceive that the provision is not arbitrary and unreasonable to invite the wrath of Article 14 of the Constitution of India - Petition is dismissed
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2011 (2) TMI 1619
Issues involved: Revisional application u/s 482 Cr.P.C. challenging the legality and propriety of criminal proceeding u/s 56 and 68 of the Foreign Exchange Regulation Act, 1973.
Summary:
The High Court of Calcutta, in a revisional application u/s 482 Cr.P.C., addressed the challenge to the criminal proceeding against a company under Sections 56 and 68 of the Foreign Exchange Regulation Act, 1973. The proceeding was initiated based on a complaint alleging international commodity trading transactions without lawful authorities. The petitioner argued that the complaint had lost relevancy as departmental proceedings on identical charges had absolved all involved parties. A comparative chart was presented, showing discrepancies between the petition of complaint and the departmental proceedings. The court noted that the departmental proceeding concluded that the charges were based on presumptions and surmises, not meeting the legal requirements. Consequently, the court found that continuing the criminal proceeding would be an abuse of the legal process, as there was no chance of proving the charges under the Foreign Exchange Regulation Act. The revisional application was allowed, the proceeding was quashed, and the petitioner was discharged.
The Hon'ble Mr. Justice Syamal Kanti Chakrabarti presided over the case. The legal representatives for the petitioner and the opposite party were Mr. Anindya Mitra, Mr. Bhaskar Sen, Mr. Joymalya Bagchi, Mr. Kaushik Gupta, and Mr. Maloy Kumar Singh, respectively. The court heard arguments from both sides before reaching its decision.
An urgent photostat certified copy of the order was directed to be provided to the parties upon application.
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2011 (2) TMI 1533
Issues Involved:
1. Dismissal of appeal Nos. 94/1992 and 95/1992 for want of prosecution.
2. Imposition of penalty for violation of provisions of FERA.
3. Evidence and arguments presented by both parties.
4. Consideration of retracted statements and corroborating evidence.
5. Interpretation of Sections 9(1)(b) and 9(1)(d) of FERA.
6. Impact of judgment in a criminal case on the penalty imposition.
Issue 1: Dismissal of appeal Nos. 94/1992 and 95/1992 for want of prosecution:
The judgment states that appeal Nos. 94/1992 and 95/1992 were pending since 1992, with no representation on behalf of the appellant. Consequently, these appeals were dismissed for want of prosecution, and the focus shifted to the facts of appeal No. 91/1992.
Issue 2: Imposition of penalty for violation of provisions of FERA:
The case involved an appeal against an order imposing penalties under FERA for violations of specific provisions. The penalties were imposed based on actions related to the receipt of instructions from abroad and subsequent financial transactions, leading to searches and seizures at various premises. The Adjudicating Authority found the appellant guilty and levied penalties, which were challenged in the present appeal.
Issue 3: Evidence and arguments presented by both parties:
The appellant's counsel argued that the appellant, acquitted in a criminal case related to the same violations, should not face penalties. They also contested the lack of evidence regarding the alleged non-resident individual involved in the transactions. The respondent's representative, however, supported the penalties based on corroborating evidence from statements and financial recoveries.
Issue 4: Consideration of retracted statements and corroborating evidence:
The judgment highlighted the reliance on retracted statements of involved parties, including the appellant, in imposing penalties. The presence of recovered funds and statements from individuals like Shri K.K. Jamaluddin and the appellant's wife was used to support the penalty imposition.
Issue 5: Interpretation of Sections 9(1)(b) and 9(1)(d) of FERA:
The judgment discussed the provisions of FERA that prohibit certain financial transactions with non-residents. It emphasized the need for evidence to establish violations and the importance of considering the appellant's business records in the context of the alleged transactions.
Issue 6: Impact of judgment in a criminal case on the penalty imposition:
The appellant's counsel argued that the appellant's acquittal in a criminal case related to the same violations should prevent penalty imposition. They also contested the lack of concrete evidence linking the appellant to the alleged transactions. Ultimately, the tribunal allowed the appeal, setting aside the penalty order and dismissing other related appeals.
This detailed analysis covers the dismissal of appeals, penalty imposition, evidence and arguments, consideration of statements and evidence, interpretation of FERA provisions, and the impact of a criminal case judgment on penalty imposition.
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2011 (2) TMI 1532
Issues:
1. Revision petition filed against order exonerating respondents for contravention of FERA sections.
2. Proper appreciation of evidence by Adjudicating Authority.
3. Delay in filing revision petition.
4. Scope of revisional powers and reasonableness of delay.
5. Exoneration of respondents based on lack of evidence except retracted statement.
6. Imposition of penalty for violation of FERA Section 9(1)(a) without show cause notice.
Analysis:
1. The revision petition was filed against an order exonerating the respondents for contravention of Sections 8(2), 9(1)(b), 9(1)(d), and 9(1)(f)(i) of FERA. The case involved the use of NRE accounts for making payments as gifts to unrelated persons, leading to a search and recovery of foreign exchange. The Adjudicating Authority exonerated the respondents based on the evidence presented, which was challenged in the revision.
2. The appellant contended that the Adjudicating Authority did not properly appreciate the evidence on record, especially regarding the violation of Section 9(1)(a) of FERA. However, the respondent argued that the revision petition should be dismissed due to delay and latches. The Tribunal can interfere in revisional powers only in exceptional cases of manifest mistake or error of law, not for re-appreciation of evidence.
3. The delay in filing the revision petition was a crucial issue raised during the proceedings. The respondent highlighted that the revision was filed after approximately 11 months without any explanation for the delay. The Tribunal considered the reasonableness of the delay, citing precedents that emphasize timely administrative actions.
4. The Tribunal analyzed the scope of revisional powers and the reasonableness of the delay in this case. It was noted that revisional powers can only be exercised in cases of manifest error by the Adjudicating Authority. The lack of a prescribed limitation for filing a revision under FERA does not justify an unreasonable delay, as equitable considerations are essential.
5. The Adjudicating Authority exonerated the respondents primarily due to the absence of substantial evidence apart from a retracted statement. Although the Authority found violations of Section 9(1)(a) of FERA, no penalty was imposed as the show cause notice did not specifically include allegations related to that section. The Tribunal upheld the Authority's decision, stating that the absence of relevant charges in the notice precluded the imposition of penalties.
6. The issue of imposing a penalty for the violation of FERA Section 9(1)(a) without a show cause notice specifically addressing that charge was a significant point of contention. The Tribunal concluded that the Adjudicating Authority's decision was not erroneous, as penalties cannot be imposed in the absence of relevant charges in the show cause notice. Therefore, the revision petition was dismissed for lacking merit.
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2011 (2) TMI 1529
Issues:
1. Appeal against imposition of penalty under FERA Act, 1973 for contravention of provisions of Section 8(10) and 8(2).
2. Lack of independent evidence to corroborate retracted statements.
3. Allegations of purchasing foreign exchange without specific details.
4. Discrepancies in names and lack of identification parade.
5. Corroboration of statements by co-accused and legal standards for evidence.
The case involved an appeal against a penalty imposed under the FERA Act, 1973 for contravention of provisions of Section 8(10) and 8(2). The appellant denied allegations of purchasing foreign exchange from a co-accused, Mohamed Omar Mistry, for Rs. 15,00,000. The Adjudicating Authority imposed a penalty of Rs. 3,00,000 based on statements and evidence. The appellant argued that there was no independent evidence to support the retracted statements and that the allegations lacked specificity regarding the nature of the foreign exchange. The appellant's counsel contended that the findings were flawed due to the absence of corroborative evidence.
The respondent supported the Impugned Judgment, asserting that the statements of the appellant and Mohamed Omar Mistry were corroborated by other evidence on record. The Chairperson analyzed the arguments, noting that both statements were retracted. Referring to legal precedent, it was highlighted that retracted statements alone cannot serve as the basis for a penalty under FERA without independent corroborated evidence. Mohamed Omar Mistry's statement lacked specific details about the foreign exchange sold, and discrepancies in names raised doubts about the identification of the appellant.
Citing the Supreme Court's stance on confessional statements by co-accused, the Chairperson emphasized the need for corroboration by independent evidence. The Adjudicating Authority's reliance on the statements of the appellant and Mohamed Omar Mistry, without additional corroboration, was deemed insufficient. The lack of specific details of the foreign exchange and discrepancies in names further weakened the case against the appellant. Consequently, the Chairperson set aside the Impugned Order of penalty, ruling in favor of the appellant due to the absence of substantial evidence and lack of connection between the appellant and the alleged transactions.
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2011 (2) TMI 1302
Violation of the provisions of Section 9(l)(f)(i) of Foreign Exchange Regulation Act, 1973 - Imposition of penalty - Delivery of foreign currency to NRI - Held that:- appellants have not disclosed their relationship with the person who donated each of them 25,000/- US Dollars. It is not probable that the total stranger will donate such a huge amount to the appellants. Even at the time of hearing of this review application a similar question was asked to Shri Madhu M. Patel whether he could disclose his relations with the donor, but Shri Madhu M. Patel could not reply the said question. On the other hand, Shri Niranjan J. Shah in his statement had admitted that he were not knowing the appellants. Thus there is a gift of 25,000/- US Dollars each to the four appellants by total strange person and, therefore, it can be safely presumed that present appellants must have paid a sum equivalent to 25,000/- US Dollars to their donee and, therefore, the violation of 9(l)(f(i) is clearly proved - Decided against Appellant.
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2011 (2) TMI 1300
Violation of the provisions of Section 9(1)(c) - Imposition of Penalty - Held that:- retracted statement cannot be made the sole basis of imposing penalty in the absence of any other independent corroborative evidence. Apart from that, making the admission of liability to third person is not an acknowledgement of debt, the acknowledgement should be in favour of the person who has a right to recover it - admission made by the appellant to the Director of Enforcement will not fall in the category of acknowledgement of debt giving legal and enforceable right to M/s. Tewin Plastics Ltd., UK - penalty imposed by the Adjudicating Authority for violation of provisions of Sections 14(a) and 18(1) against show cause notice no. 2 is solely based on the retracted statement - Therefore, penalty imposed is not sustainable - However, The penalty of Rs. 50,000/-imposed for acknowledging on the date in favour of M/s. Tewin Plastics Ltd., UK is set aside while remaining part of the order is maintainable - Decided partly in favour of appellant.
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2011 (2) TMI 1298
Issues involved:
The judgment involves the challenge to an Adjudication Order u/s 9(1)(a), 9(91)(c), 16(d) of FERA and 16(1)(a) of FER Act, 1973.
Violation of Section 9(1)(a) of FERA:
The appellant challenged the Adjudication Order imposing penalties for various violations. The Adjudicating Authority found some allegations to be true and imposed penalties based on retracted statements without sufficient corroborative evidence.
Violation of Section 9(91)(c) of FERA:
One of the Show Cause Notices alleged unauthorized payments made abroad without RBI permission. The appellant claimed these payments were for rent but later retracted the statement. The Adjudicating Authority relied solely on the retracted statement, contrary to legal principles.
Violation of Section 16(d) of FERA:
Another Show Cause Notice accused the appellant of acknowledging a debt without proper evidence. The only evidence presented was an entry in the appellant's diary, which was deemed insufficient to prove acknowledgment of debt.
Violation of Section 16(1)(a) of FER Act, 1973:
The appellant was charged with receiving payments from a foreign entity without proper authorization. The Adjudicating Authority found the appellant guilty based solely on retracted statements without independent corroborative evidence.
Conclusion:
The Appellate Tribunal found the Adjudication Order unsustainable as it did not adhere to legal principles, especially regarding the reliance on retracted statements without sufficient corroborative evidence. The appeal was allowed, the Impugned Order was set aside, and the penalty amount deposited by the appellant was to be refunded within three months.
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2011 (2) TMI 1297
Issues: Violation of Section 8(1) and 9(1)(a) of FERA, Evidence Relied Upon, Compliance with Administrative Law Principles
In this case, the appellant challenged an order imposing a penalty for violating Section 8(1) and 9(1)(a) of FERA. The appellant allegedly deposited foreign exchange into a bank account without proper authorization. The Adjudicating Authority found the appellant guilty based on certain documents. However, the appellant argued that these documents were not provided during the show cause notice stage, which is a violation of administrative law principles. The appellant contended that the reliance on undisclosed documents was unjust. The appellant highlighted that the Asstt. Director considered evidence from other cases against the appellant, which is not permissible as each case should be decided based on its own evidence. The Tribunal agreed with the appellant, emphasizing that all materials relied upon for imposing a penalty must be provided to the appellant. As the evidence relied upon was not part of the record and not disclosed during the show cause notice, the Tribunal set aside the impugned order, ruling in favor of the appellant.
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2011 (2) TMI 1166
Condonation of delay - appeal beyond the period of 120 days - Held that:- Since the appeals have been filed beyond thirty days from 26-7-2010,day on which the order was made, this Court has no power to condone the delay - Decided against the assessee
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2011 (2) TMI 1146
Non fulfillment of export obligation under EPCG Licence - penalty - as per petitioner there is a clear violation of principles of natural justice as order imposing penalty has been passed without hearing the petitioner on merits - Held that:- Since the order of the second respondent, which resulted in passing of the impugned recovery proceedings by the third respondent Tahsildar, was not communicated, as per law, the petitioner had no knowledge of the proceedings of the second respondent and thereby his valuable rights has been affected. Non-service of the original order of adjudication, imposing penalty ex parte, is good enough reason to set aside the impugned proceedings of the third respondent Tahsildar, as the order adverse to the petitioner has been passed by the second respondent without proper service as contemplated by law. The order for recovery is causing great prejudice due to infraction of law The third respondent’s proceeding to recover the penalty amount from the petitioner will, therefore, be arbitrary and prejudicial to the petitioner only on account of violation of principles of natural justice.
In such view of the matter, the petitioner on receipt of a copy of this order is permitted to file an appeal within the prescribed time limit. In favour of assessee.
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2011 (2) TMI 154
Foreign exchange - Search and seizure - Prosecution and penalty - appellant submits that the standard of proof required to bring home the charge in a criminal case is much higher than in the adjudication proceedings and once the appellant has been exonerated in the adjudication proceedings, his prosecution is an abuse of the process of court. - Held that: - in a statute relating to economic offences, there is no reason to restrict the scope of any provisions of the Act. These provisions ensure that no economic loss is caused by the alleged contravention by the imposition of an appropriate penalty after adjudication under section 51 of the Act and to ensure that the tendency to violate is guarded by imposing appropriate punishment after due transaction in terms of section 56 of the Act. The scheme of the Act makes it clear that the adjudication by the concerned authorities and the prosecution are distinct and separate. No doubt, the conclusion of the adjudication, in the case on hand, the decision of the Special Director dated November 18, 1996, may be a point for the appellant and it is for him to put forth the same before the Magistrate. Inasmuch as the FERA contains certain provisions and features which cannot be equated with the provisions of the Income-tax Act or the Customs Act and in the light of the mandate of section 56 of the FERA, it is the duty of the criminal court to discharge its functions vested with it and give effect to the legislative intention, particularly, in the context of the scope and object of the FERA which was enacted for the economic development of the country and augmentation of revenue. Though the Act has since been repealed and is not available at present, those provisions cannot be lightly interpreted taking note of the object of the Act. - appeal dismissed.
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2011 (2) TMI 127
Waiver of pre-deposit - quantum of pre-deposit - The appellant failed to discharge its export obligation under the licences - The Adjudicating Authority imposing a penalty - The appellant failed to make the pre-deposit of Rs. 5,00,000/- and consequently the appeals were dismissed - The Division Bench of the High Court passed the impugned order allowing the appellant to deposit a sum of Rs. 20,00,000/for each of the appeals - The Division Bench of the High Court should not have passed the impugned order for deposit of Rs. 20,00,000/- for each of the appeals when the Appellate Authority had directed the appellant to make pre-deposit for Rs. 5,00,000/- for both the appeals - Discretion is vested in the Appellate Authority to dispense with a pre-deposit of penalty either unconditionally or subject to such condition as the Appellate Authority may impose - If in exercise of such discretion, the Appellate Authority in the present case dispensed with the pre-deposit penalty of Rs. 1,30,00,000/- in each of the two appeals subject to the appellant depositing a sum of Rs. 5,00,000/- the Division Bench of the Delhi High Court ought not to have enhanced the amount of pre-deposit to Rs. 20,00,000/- for each of the two appeals - Set aside the impugned order of the Division Bench of the High Court of Delhi - Direct that in case the appellant deposits the sum of Rs. 5,00,000/- and the appeal will be heard on merits afresh by the Appellate Authority.
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2011 (1) TMI 1549
Issues involved:
The legality of the show-cause notice issued u/s 13(i) of FEMA for alleged contravention of export realization provisions.
Judgment Details:
Issue 1: Jurisdiction of show-cause notice
- The show-cause notice alleged contravention of Sections 7 & 8 of FEMA regarding export realization.
- The contravention period was during FERA's enforcement, not FEMA's.
- Section 49(3) of FEMA prohibits taking cognizance of FERA offences after two years from FEMA's commencement.
- Offences under FERA continue to be governed by FERA post-repeal.
- The show-cause notice issued after the two-year limit is illegal.
- Citing the Apex Court's interpretation of "cognizance" in a similar case.
- Referring to a Delhi High Court judgment on a similar issue.
- Concluding that the show-cause notice lacks jurisdiction and legality.
Conclusion:
- The writ petition is allowed, quashing the show-cause notice and related proceedings.
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9911796707
