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FEMA - Case Laws
Showing 681 to 700 of 1378 Records
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2009 (8) TMI 1295
Issues:
Violation of section 9(1)(a) of the Foreign Exchange Regulation Act, 1973.
Analysis:
1. The appeal was filed against an Adjudication Order imposing a penalty for contravention of section 9(1)(a) of the FERA, 1973. The appellant had made partial payment of the penalty amount. The main argument was that the payment made was not to a person resident outside India but to a Chartered Accountant, thus falling under a different section of the Act.
2. The Show-Cause Notice alleged that the appellant made a payment to a person resident outside India without permission, which violated section 9(1)(a) of the FERA. The appellant argued that the payment was made to a Chartered Accountant for the original amount, not directly to a foreign resident. It was contended that the offense, if any, should fall under a different section of the Act, not 9(1)(a).
3. Section 9(1)(a) of the FERA, 1973, prohibits making payments to or for the credit of any person resident outside India without permission from the RBI. The statutory scheme under this section is clear that such payments require authorization.
4. The appellant admitted to receiving a demand draft from a foreign resident's NRE account and making a payment through a Chartered Accountant. Statements from the Chartered Accountant and another individual corroborated the appellant's admission. The evidence supported the charge under section 9(1)(a) of the FERA.
5. The appellant retracted his confession, alleging coercion, but failed to provide evidence to support this claim. Legal precedents were cited to establish that a retracted confession can be valid if proven voluntary and corroborated by other evidence, which was the case here.
6. The Tribunal found that the ingredients of section 9(1)(a) were proven, and the appellant was rightly held guilty. However, considering the circumstances, the penalty amount was deemed excessive, and it was reduced to the amount already deposited by the appellant. The appeal was partly allowed, and the pre-deposited amount was to be appropriated towards the penalty.
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2009 (8) TMI 1202
Issues Involved:
1. Validity of the Show Cause Notice.
2. Authorization and Limitation of the Revision Petition.
3. Misreading of the Memorandum and Articles of Association.
Summary:
1. Validity of the Show Cause Notice:
The appellants contended that the Show Cause Notice issued by the Enforcement Directorate was without any cause of action and lacked application of mind. This was admitted by the Directorate in the order dated 8.6.04. The Enforcement Directorate's order supported the appellants' case, stating, "The charge against the notices that they did not take prior permission of the Govt. with respect to the FDI in the equity shares of the Noticee company is not sustainable."
2. Authorization and Limitation of the Revision Petition:
The revision petition was filed by an unauthorized person after more than one and a half years, despite the 45-day limitation period prescribed u/s 35 of FEMA. The Tribunal had previously emphasized the need for proper authorization, as seen in the case of Director, Enforcement Directorate Vs. Starlite Lighting Ltd. The Tribunal noted, "We cannot say that Shri T.K. Gadoo, DLA, bears any authority to file this revision petition." The respondents conceded that no mechanism was formed to address these deficiencies until an order was issued on 23.02.2009 authorizing Deputy Legal Advisers. The appellants cited the Supreme Court judgment in State of Punjab and Ors. Vs. Bhatinda District Cooperative Milk Producers Union Ltd., which held that statutory authority must exercise its jurisdiction within a reasonable period.
3. Misreading of the Memorandum and Articles of Association:
The proceedings were initiated based on a misreading of the appellant company's Memorandum and Articles of Association. The company was engaged in manufacturing, trading, and providing consultancy services related to oil exploration, not in the business of oil exploration itself. The Enforcement Directorate's order stated, "There is nothing on record to show that the company is engaged in the business of oil exploration." The Tribunal's decision to impose a penalty was based on the incorrect assumption that the company was involved in oil exploration.
Conclusion:
The appeal was allowed, and the impugned order was set aside with costs of Rs. 50,000. The judgment highlighted the lack of cause of action, unauthorized filing of the revision petition, and misinterpretation of the company's business activities.
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2009 (8) TMI 1120
Alleged contravention of the provisions of Section 8(1) and 8 (2) of the FERA, 1973 - peanlty imposed
Held that:- The learned counsel appearing on behalf of the respondent though submitted a written note opposing the case of the appellant but has not been able to substantiate the proof of alleged statement of Surinder Kumar Dhawan, which is the basis of the involvement of the present appellant in this case. The voluntariness of the statement of the present appellant has also not been proved. No copy of the statement dated 2-7-1986 has been placed on record. Thus, there is no evidence which may prove the role of the appellant in this case. Further in this case the enquiry is not fair inasmuch as no opportunity has been granted to the appellant to cross-examine the witnesses who recorded the statement of the appellant and of other accused persons or the witnesses to the recovery of the incriminating documents or the witnesses to the recovery of the alleged foreign exchange from Surinder Kumar Dhawan and as such even the lighter burden to prove their case by preponderance of probability has not been discharged by the respondent. Moreso, they have also not been able to lead evidence before the adjudicating authority that the alleged confessional statement, on which reliance has been placed by the respondents, was made voluntarily and was not recorded by using any force upon him as alleged by the appellant in his written communication sent on 14-9-1985.
Thus no ground for imposition of penalty upon the appellant in this case and consequently, the penalty imposed by respondent No. 3 vide order dated 10-4-1991, upheld by respondent No. 2 though by reducing the penalty amount, is not sustained.
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2009 (8) TMI 711
The High Court of Delhi, under the citation 2009 (8) TMI 711, delivered a judgment by Anil Kumar, J., in response to a petition seeking the quashing of an order dated 12-8-2008 from the Appies Tribunal for Foreign Exchange. The order in question, related to Appeal Nos. 335 to 337/2003, directed the petitioner to deposit a penalty amount of Rs. 2 lakhs. The petitioner, Shri S.K. Mittal, had filed an appeal against a penalty of Rs. 6,41,18,065 imposed on him for contravention of sections 8(1), 9(1)(a), and 9(1)(f)(i) of the Foreign Exchange Regulation Act, 1973. The court considered the petitioner's assets, his willingness to deposit further amounts, and the fact that he had already deposited Rs. 5 lakhs with the Adjudicating Officer. As a result, the court granted dispensation with the deposit of the penalty amount, applying this decision to all 178 pending appeals before the Appellate Tribunal. The petitioner, in the present case, had deposited the required amounts by specified dates, leading to the allowance of the writ petition and the disposal of all pending applications. The order of 12-8-2008 was set aside, and the Appellate Tribunal was directed to decide the appeal without insisting on the pre-deposit of the entire penalty amount, in line with previous orders. The parties were left to bear their own costs.
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2009 (8) TMI 708
Issues:
Challenge to order of Appellate Tribunal for Foreign Exchange regarding waiver of penalty deposit.
Analysis:
The petitioner, Aadik Exports, challenged the order of the Appellate Tribunal for Foreign Exchange dated 2-7-2008, which required the petitioner to deposit 50% of the penalty amount of Rs. 3,00,000 within thirty days. The petitioner had supplied garments to a buyer in Finland in 1992, but the consignment was not accepted due to alleged defects. The consignment remained in a bonded warehouse in Finland, and efforts to locate a new buyer were unsuccessful. The petitioner eventually wrote off the outstanding export proceeds. While the Reserve Bank of India approved the waiver/write off for one consignment, no such approval was granted for the other consignment. The petitioner was penalized under the Foreign Exchange Regulation Act, 1973, and was directed to deposit Rs. 1,50,000 by the Appellate Tribunal. An interim order stayed the deposit requirement pending further proceedings.
The petitioner argued that both consignments were exported to the same buyer, and the circumstances were similar for both. The petitioner contended that the legal expenses involved in pursuing the matter further outweighed the marginal value of the consignments, leading to the decision to write off the outstanding amount. The petitioner expressed willingness to provide security for the balance penalty amount to the Enforcement Directorate. Considering the facts presented, the court modified the order of the Appellate Tribunal, directing the petitioner to deposit Rs. 75,000 towards the penalty amount and provide security of Rs. 2,25,000 to the Enforcement Directorate. The petitioner was also required to submit an affidavit disclosing personal assets and those of family members within four weeks. The writ petition was disposed of accordingly, with the petitioner complying with the modified directives.
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2009 (8) TMI 622
Dispensation of pre-deposit-Penalty- the disputes are that the penalty was imposed on the petitioner by Special Director of Enforcement on the allegation that the partner of petitioner Sh. Hardeep Singh @ Babu and another person Sh. Raman B. Gupta, Sh. Sunil Gill and Rajiv Kumar and Sh. Deepak were illegally acquiring and transferring foreign currency out of India to bring into India gold, silver and other dutiable goods. The petitioner seeks setting aside of order dated 31st January, 2008 passed by the Appellate Tribunal for Foreign Exchange directing the appellant to deposit 20% of the penalty amount within 30 days from the date of receipt of the said order. Held that- The petitioner has also produced medical record of his wife to show that he requires considerable amount of money for her treatment. In the circumstances if the petitioner is directed to deposit 25 lakhs of rupees, by any yardstick will cause ‘undue hardship’ to the petitioner. The Tribunal has elaborated what is ‘undue hardship’ but failed to apply the facts of the present case to infer whether ‘undue hardship’ shall be caused to the petitioner or not if the petitioner is directed to deposit the amount, in the present facts and circumstances and considering the prima facie case in favor of petitioner, it still cause irreparable loss to him. Therefore it has to be inferred that the impugned order directing petitioner to deposit rupees 25 lakhs as a condition for hearing his appeal is vitiated and is liable to be set aside. Accordingly, having regard to the facts and circumstances of the case the order dated 31st January, 2008 passed by the Appellate Tribunal for Foreign Exchange in directing the appellant to deposit 20% of the penalty amount within 30 days from the date of receipt of the said order is set aside and the writ petition is allowed.
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2009 (7) TMI 1397
Issues:
- Appeal against Adjudication Order imposing penalty for contravention of Foreign Exchange Regulation Act, 1973
- Failure to make pre-deposit of penalty leading to dismissal of appeals
Analysis:
The Appellate Tribunal for Foreign Exchange, New Delhi, delivered a judgment regarding appeals filed against an Adjudication Order imposing penalties under the Foreign Exchange Regulation Act, 1973. The penalties were imposed due to contravention of provisions related to the repatriation of export proceeds. The appellants failed to take reasonable steps for repatriation after exporting goods, leading to the penalties. The appeals were accompanied by applications for dispensation of pre-deposit, which were decided by the Tribunal. Despite multiple notices and opportunities, the appellants did not appear for hearings. The Tribunal allowed a dispensation of 40% of the penalty amount but directed the appellants to make a pre-deposit of the remaining 60% within 30 days, failing which the appeals would be dismissed solely on this ground.
The Enforcement Directorate, represented by Shri A.C. Singh, argued for the dismissal of the appeals based on the provisions of Section 52(2) of the Foreign Exchange Regulation Act, 1973. This section mandates the pre-deposit of penalties while filing appeals, unless the Tribunal dispenses with it due to undue hardship. The grounds for undue hardship, as per legal precedents, include an ex-facie bad order or financial disability. The Tribunal emphasized that the statutory scheme is clear and unambiguous, and it cannot reinterpret it to avoid harsh consequences. Reference was made to a Supreme Court judgment to support this stance.
Ultimately, the Tribunal concluded that the appeals should be dismissed due to the non-compliance with the order requiring the pre-deposit of the penalty. The impugned order imposing penalties was maintained and sustained. The dismissal of the appeals was based on the failure of the appellants to adhere to the Tribunal's directive regarding the pre-deposit of the penalty amount within the specified timeframe.
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2009 (7) TMI 1328
Issues involved: Challenge to order dismissing writ petition for waiver of pre-deposit u/s Article 226 of the Constitution.
Summary:
The appellant was issued a show cause notice u/s 8(3) and 8(4) of FERA, 1973 for under-valuation of imported marble. The Special Director imposed a penalty of Rs. 20,00,000 u/s 50 of FERA, 1973. The Appellate Tribunal dismissed the appellant's application for dispensation of pre-deposit, leading to the dismissal of the appeal if the penalty was not paid within 30 days. The appellant's writ petition against the Tribunal's order was also dismissed by the Single Judge.
The appellant contended that Sections 8(3) and 8(4) of FERA, 1973 were inapplicable to the case, while the respondent argued that the penalty was imposed due to under-invoicing.
The High Court, considering the case u/s 19 of FEMA, observed that undue hardship and safeguarding penalty realization are crucial. It noted that undue hardship must be disproportionate to the requirement and benefit derived. The Court found no independent finding of under-valuation and doubted the applicability of Sections 8(3) and 8(4) as goods were imported with RBI permission. Due to doubts on the adjudicating order's sustainability and the appellant's financial hardship, the Court granted waiver of pre-deposit, allowing the appeal.
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2009 (7) TMI 1326
Issues involved:
The appellant challenged the order of detention u/s 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, passed by the learned Single Judge. The issues included the jurisdiction of the court, delay in executing the detention order, and the justification for preventive detention.
Jurisdiction of the Court:
The appellant contested the detention order on the grounds of jurisdiction, as it was passed at Gandhinagar, Gujarat, while he anticipated execution in Ludhiana. The Single Judge held that the court had territorial jurisdiction based on the alleged violation of the right to life and liberty within its jurisdiction, citing precedent cases.
Delay in Execution of Detention Order:
The detention order was passed five years prior, for a one-year period, but was never executed. The appellant relied on previous judgments where orders were quashed due to significant delays in execution. The court, considering the lack of execution and the cited precedents, concluded that the order of detention should be quashed.
Justification for Preventive Detention:
The detention order was based on allegations of evasion of customs and central excise duties by the appellant. Statements from individuals implicated the appellant in illegal activities related to duty evasion. However, due to the significant delay in executing the order and lack of satisfactory explanation for the delay, the court decided to quash the order with the possibility of a fresh order if necessary.
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2009 (7) TMI 1193
Whether the High Court/Supreme Court has the power to transfer a suit from a Civil Court to the DRT?
Whether Article 142 is applicable to direct a transfer from a Civil Court to DRT, especially when the DRT Act does not bar the jurisdiction of the Civil Court to entertain a suit against a bank and therefore powers under Article 142 ought not to be exercised to have such an effect or Article 142 is not applicable where a statute occupies the field or Power under Article 142 should be exercised only to prevent injustice and do complete justice between the parties?
Held that:- Having regard to our finding that even Section 24 of the Code of Civil Procedure cannot be taken recourse to, there cannot be any doubt whatsoever that the Punjab and Haryana High Court could not have transferred the suit from the civil court Ludhiana to DRT. Appeal allowed.
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2009 (7) TMI 783
Guilty of contravention of the provisions of sections 8(1), 8(2) and 9(1)(b) of Foreign Exchange Regulation Act, 1973 (FERA) for purchase and sale of foreign exchange unauthorisedly - penalty imposed
Held that:- The confessional statement can be acted upon in spite of the retraction. Therefore, the Authorities below rightly acted upon the confessional statement and held the present appellant guilty of the charges. In view of the facts and circumstances of the case, we do not find that the Authorities below committed any error in drawing the conclusions. There is nothing to show that the findings are perverse in any manner. Therefore, no question of law is involved in the present appeal. Appeal dismissed.
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2009 (6) TMI 1032
Issues:
Violation of provisions of Section 16(1)(a) read with 68 of FER Act, 1973 by appellants for failure to receive balance foreign currency, Contravention of contractual obligations by appellants, Liability of appellants for non-performance under Section 16, Directors' responsibility under Section 68 of FER Act, 1973, Imposition of penalties on the appellants.
Analysis:
The judgment pertains to appeals filed against an Adjudication Order imposing penalties for contravention of FER Act, 1973. The appellants failed to receive the balance foreign currency as per an agreement with a non-resident, leading to alleged violations. The Tribunal allowed dispensation of pre-deposit penalty and proceeded with final disposal on merits.
The agreement between the appellants and the non-resident involved the sale of shares in a hotel project. The appellants contended that due to the non-resident's failure to obtain RBI permission, further payment could not be received, thus denying any contravention of FER Act, 1973. However, the Show Cause Notice highlighted the failure to secure the agreed payment, leading to adjudication proceedings.
The Tribunal found that the appellants did not fulfill the contractual obligations outlined in the agreement, such as obtaining necessary approvals and sanctions. The failure to demand performance or seek damages for breach of contract from the non-resident was noted. The appellants' inaction in ensuring compliance with the agreement's clauses led to non-receipt of the payment, violating Section 16 of FER Act, 1973.
Additionally, the appellants, being Directors of the company, were held responsible under Section 68 of FER Act, 1973 for the company's actions. The judgment emphasized that the Board of Directors is liable for company actions, and the penalty imposed was deemed appropriate considering the circumstances. The Tribunal dismissed the appeals, affirming the impugned order and directing the appellants to deposit the penalties within a specified timeframe.
In conclusion, the judgment underscores the importance of fulfilling contractual obligations, directors' responsibilities, and adherence to regulatory provisions. The appellants' failure to ensure compliance and demand performance resulted in penalties for violations of FER Act, 1973, ultimately leading to the dismissal of the appeals.
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2009 (6) TMI 1031
Issues Involved:
1. Admissibility of recovered loose chits as evidence.
2. Validity of admissional statements recorded under alleged threat and coercion.
3. Legitimacy of the recovered Indian currency claimed to be from a cassette business.
4. Burden of proof regarding the involvement in contraventions under the FER Act.
Issue-wise Detailed Analysis:
1. Admissibility of Recovered Loose Chits as Evidence:
The appellant argued that the recovered loose chits could not be taken into evidence and that the seized Indian currency of Rs. 6,70,000/- was not involved in the contravention of the FER Act. The Tribunal noted that while the recovery of loose chits was questioned, it was not outrightly denied. The Tribunal emphasized that the writings in the chits, although not amounting to an account book under Section 34 of the Indian Evidence Act, still constituted a valid piece of evidence. The Tribunal clarified that the Indian Evidence Act's provisions are not directly applicable to FERA proceedings, thus the chits could not be disregarded without proper examination.
2. Validity of Admissional Statements Recorded Under Alleged Threat and Coercion:
The appellant contended that his admissional statements were recorded under threat and coercion, citing judgments in Vinod Solanki v. Union of India and Mohtesham Mohd. Ismail v. Special Directorate, Enforcement Directorate. However, the Tribunal found that the appellant's description of threat and coercion was delayed and coincided with his bail application. The Tribunal concluded that admissional statements, even if retracted, could still be accepted as evidence if corroborated by other facts, referencing K.I. Pavunny v. Assistant Collector (HQ), Central Excise Collectorate, Cochin. The Tribunal found corroboration in the recovered chits and the admissional statement of the co-noticee.
3. Legitimacy of the Recovered Indian Currency Claimed to be from a Cassette Business:
The appellant claimed that the recovered Indian currency was related to his cassette business and that the writings on the chits were descriptions of this business. The Tribunal rejected this argument, noting that business records are typically maintained in a more permanent form rather than on loose chits. The Tribunal found the appellant's explanation unconvincing and unsupported by the nature of typical business record-keeping practices.
4. Burden of Proof Regarding the Involvement in Contraventions Under the FER Act:
The Tribunal discussed the burden of proof in quasi-criminal proceedings, referencing the principle that the prosecution need not prove its case with absolute certainty but must establish a degree of probability sufficient for a prudent person to believe in the existence of the fact in issue. The Tribunal cited Collector of Customs, Madras & Ors. v. D. Bhoormull and other cases to emphasize that the burden of proof can be lightened by the presumption of fact arising from the evidence presented. The Tribunal found that the statements of various individuals corroborated the appellant's involvement in contraventions under sections 9(1)(b), 9(1)(d), and 9(1)(f)(1) of the FER Act.
Conclusion:
The Tribunal dismissed the appeal, affirming the impugned order. It concluded that the admissional statement, corroborated by the recovered chits and statements of other individuals, supported the allegations against the appellant. The Tribunal directed that the pre-deposited amount of 50% penalty be appropriated towards the penalty and allowed the appellant to deposit the remaining amount within a week, failing which the Enforcement Directorate could recover the same in accordance with the law.
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2009 (6) TMI 1030
Issues Involved:
1. Contravention of Section 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973.
2. Abetment under Section 64(2) of the Foreign Exchange Regulation Act, 1973.
3. Compliance with conditions of permissions granted by the RBI as per Section 49(1)(a) of the Foreign Exchange Regulation Act, 1973.
4. Validity and enforcement of the penalty imposed by the Special Director, Enforcement Directorate.
Issue-wise Detailed Analysis:
1. Contravention of Section 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973:
The Tribunal examined the provisions of Section 9, which restricts payments to and from non-residents without RBI permission. The appellants, M/s. STAR, M/s. News Television, and M/s. Credit, were found to have violated these provisions. Specifically, M/s. STAR, a non-resident, transferred Rs. 81026331 to M/s. News Television, which was used to pay advertising agents in India. The Tribunal emphasized that Section 9 applies to any person in India or resident in India, including non-residents if the violation occurs within Indian territory. Consequently, the appellants' actions were deemed to contravene Section 9(1)(b) and 9(1)(d).
2. Abetment under Section 64(2) of the Foreign Exchange Regulation Act, 1973:
The Tribunal addressed the issue of abetment, noting that M/s. Credit, as a banker, facilitated the opening of the NRO account and transferred funds to M/s. News Television. The Tribunal referred to the definition of abetment under Section 107 of the Indian Penal Code, highlighting intentional aiding or instigation. It concluded that M/s. Credit's actions amounted to intentional aiding, thus constituting abetment under Section 64(2) of the Foreign Exchange Regulation Act, 1973.
3. Compliance with conditions of permissions granted by the RBI as per Section 49(1)(a) of the Foreign Exchange Regulation Act, 1973:
The Tribunal analyzed the conditions set by the RBI in its permission letters dated 15.12.1993 and 25.2.1994. M/s. STAR and M/s. Credit were found to have violated these conditions by transferring funds without specific RBI permission. The Tribunal applied Section 49(1)(a), which deems failure to comply with conditions of permissions as a contravention of the Act. It concluded that the appellants' actions violated the conditions of the RBI's permissions, thus contravening Section 9 of the Foreign Exchange Regulation Act, 1973.
4. Validity and enforcement of the penalty imposed by the Special Director, Enforcement Directorate:
The Tribunal upheld the penalties imposed by the Special Director, Enforcement Directorate, considering them neither excessive nor harsh. It rejected the appellants' arguments based on the absence of contumacious conduct, referring to the Supreme Court's judgment in Chairman, SEBI v. Sriram Mutual Fund, which emphasized mandatory penalties for contraventions of regulatory statutes. The Tribunal adopted a purposive approach to interpretation, aiming to fulfill the true purpose of the legislation. It concluded that the penalties were justified and directed the appellants to deposit their respective penalties within 7 days, failing which the Enforcement Directorate could recover the amounts, including through encashment of the unconditional bank guarantees.
Conclusion:
The Tribunal dismissed the appeals, affirming the penalties imposed by the Special Director, Enforcement Directorate, and emphasizing the importance of strict compliance with the Foreign Exchange Regulation Act, 1973, and the conditions of permissions granted by the RBI. The judgment underscores the applicability of Section 9 to both residents and non-residents within Indian territory and the significance of intentional aiding in constituting abetment under the Act.
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2009 (6) TMI 1029
Delay in issuing the show-cause notice - Non -maintenance of old records after expiry of 8 years as per provisions of Banking Regulations Act, 1949, and Rules - Requirement of Currency Declaration Forms (CDFs) - guilty on not taking reasonable care while depositing foreign currency in an NRE account - Validity of adjudication proceedings - deposits on overlapping dates coupled with high number of deposits - word 'abetment' - HELD THAT:- The appellant-bank has allowed 9 different deposits of foreign currency totalling to US dollars 72,800 within 9 days. This act of overlap-ping deposits in continuation is nothing less than aiding and abetting the second appellant in contravention of section 8(1) of FER Act, 1973. This is more so when CDF is not called for by the appellant-bank from second appellant. As FER Act, 1973, has not defined the word 'abetment', so we are required to go to the definition contained in Indian Penal Code where section 107 has stated.
It is well-settled that in order to constitute the offence of abetment the abettor must be shown to have done acts or omissions of (1) intentional aiding or (2) instigating someone to do prohibited acts or (3) engaging in a conspiracy in the commission of the crime. Mere association or general advice or mere advancing of loans is not insufficient.
The second appellant has taken a plea that SCN or notice of hearing is served on him by affixation under rule 10(c), Adjudication Proceedings and Appeal Rules, 1974, and he has brought the deposited foreign currency in a lawful manner from USA where he is residing. Firstly, the SCN is required to be served and there is no illegality if the same is served by affixation when appellant is not ready to face the adjudication. His address given of C-108, South Extension, Part II, New Delhi, is served by affixation which is permitted under the Adjudication Proceedings and Appeal Rules, 1974. Moreover, he has not brought out any CDF through which he has brought the deposited foreign currency in India. The burden under section 71, FER Act, 1973, lies on him. Moreover, the factum of bringing foreign currency into India through CDF is within his special knowledge. This fact also casts a burden on second appellant to prove by logical evidence, i.e., production of CDF, that he has brought foreign currency in India in a lawful manner. As the burden under section 106, Indian Evidence Act, 1882, has not been discharged so he has been correctly held guilty and the impugned order cannot be termed as bad in law. Nor the impugned order contains any other error so is required to be affirmed. This Appeal No. 1109/2004 contains no merit so is required to be dismissed.
Therefore, these appeals do not contain any merit and are required to be dismissed. The appellant-bank has not performed the expected duty of due care and attention while making 9 different deposits in NRE account of same person on overlapping dates within a short period of 9 days. There is no other error pointed out in the impugned order which is required to be affirmed.
Thus, these appeals are dismissed having no merits. The impugned order is sustained and maintained. An order is passed accordingly.
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2009 (6) TMI 1020
Issues involved: Coercive steps under Revenue Recovery Act pursued during pendency of statutory appeal.
Summary:
The petitioner approached the High Court due to coercive steps taken by the respondents under the Revenue Recovery Act, despite a pending statutory appeal. The petitioner had filed a memorandum of appeal challenging the order imposing a penalty. The petitioner received a notice for the appeal hearing scheduled on a specific date. The Court, after hearing both parties, decided not to delve into the merits of the case considering the appeal was already set for hearing. The Court directed the second respondent to consider the appeal in accordance with the law and provide a hearing, while keeping all coercive proceedings against the petitioner on hold until a final decision is made on the appeal. The Writ Petition was disposed of accordingly.
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2009 (5) TMI 1024
Issues Involved:
1. Validity of the appellant's admissional statements.
2. Involvement of the appellant in the hawala transactions.
3. Allegations of coercion and ill-treatment by the Enforcement Officers.
4. Denial of cross-examination of witnesses.
5. Proof of abetment by the appellant.
6. Requirement of proving mens rea (guilty mind) for the contravention.
Issue-wise Detailed Analysis:
1. Validity of the appellant's admissional statements:
The Tribunal examined whether the admissional statements made by the appellant were voluntary and truthful. It was established that the statements were made in an atmosphere free from fear and duress. The Tribunal referred to the Supreme Court's ruling in Kanhaiyalal v. Union of India, which held that statements recorded by enforcement officers are admissible if made voluntarily. The Tribunal concluded that the appellant's statements were voluntary and corroborated by other evidence, including the statement of co-noticee Punjabhai Shah.
2. Involvement of the appellant in the hawala transactions:
The Tribunal found that the appellant, Jayanti P. Shah, was closely associated with Punjabhai H. Shah in the hawala transactions. The appellant admitted in his statement that he assisted Punjabhai H. Shah in receiving and making payments on instructions from persons resident outside India. The recovery of a note pad from the appellant's residence and the corroboration of his statements by Punjabhai Shah's statements further established his involvement.
3. Allegations of coercion and ill-treatment by the Enforcement Officers:
The appellant alleged that his statements were obtained under coercion and threat. However, the Tribunal found no evidence to support these allegations. The remand order of the Magistrate did not indicate any injuries or force used by the Enforcement Officers. The Tribunal concluded that the allegations of coercion were bald assertions without any supporting evidence.
4. Denial of cross-examination of witnesses:
The appellant argued that the adjudication order was passed without giving him an opportunity to cross-examine the witnesses. The Tribunal held that cross-examination cannot be permitted merely on demand without establishing certain reasons and circumstances. The refusal of cross-examination was not considered a violation of natural justice, as the appellant failed to provide sufficient reasons for the same.
5. Proof of abetment by the appellant:
The Tribunal examined whether the appellant abetted Punjabhai H. Shah in the hawala transactions. It referred to the definition of abetment under Section 107 of the Indian Penal Code, which includes instigation, conspiracy, and intentional aiding. The Tribunal found that the appellant's close association with Punjabhai H. Shah and his active complicity in the transactions established the charge of abetment. The appellant's actions facilitated the commission of the contraventions, proving his role as an abettor.
6. Requirement of proving mens rea for the contravention:
The appellant argued that the prosecution failed to prove the culpable mental state (mens rea) required for the contravention. The Tribunal referred to the Supreme Court's ruling in The Chairman, SEBI v. Shriram Mutual Fund, which held that the intention of the parties committing the violation is irrelevant once the contravention is established. The Tribunal concluded that the appellant's contravention of the statutory obligations under FERA was established, and the penalty was justified irrespective of the presence of mens rea.
Conclusion:
The Tribunal dismissed the appeal, upholding the penalty imposed on the appellant for contravention of Section 9(1)(b) and 9(1)(d) read with Section 64(2) of the Foreign Exchange Regulation Act, 1973. The Tribunal directed the appellant to deposit the balance amount of the penalty within 15 days, failing which the amount may be recovered by the respondent in accordance with the law.
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2009 (5) TMI 764
The petitioners herein are appellants who have filed appeals before the Appellate Tribunal for Foreign Exchange. These appeals are against penalty orders passed under the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as FERA, for short) but were preferred after the repeal of the aforesaid Act by Foreign Exchange Management Act, 1999 (hereinafter referred to as FEMA, for short) with effect from 1st June, 2000. As per FERA read with Adjudication Proceedings and Appeal Rules, 1974, the Court fees payable on an appeal depends upon the quantum of fine and is subject to maximum Court fees of Rs.2,000/-. As per FEMA read with Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000, the Court fees payable on an appeal before the Foreign Exchange Appellate Tribunal is Rs.10,000/-.
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2009 (5) TMI 530
Whether the conviction of the appellant could have been based solely on the basis of retracted confession without there being any other corroborating evidence?
Once the retraction of a confessional statement takes place then who is to prove that the confession recorded was voluntary?
Whether the revision petition filed in this case was not within limitation?
Whether the penalty imposed upon the appellant is justified?
Held that:- In view of the judgment delivered by the Apex Court in Vinod Solanki’s case (2008 (12) TMI 31 - SUPREME COURT) and Noor Aga’s case (2008 (7) TMI 853 - SUPREME COURT) and admission of the respondents that the statement made under section 40 of the Act was retracted by the appellant, the conviction of the appellant cannot be sustained.
Once the retraction of a confessional statement takes place the burden to prove that the statement was voluntary is on the prosecution which burden has not been discharged.
A revision petition can be filed by the Department in view of section 52(4) of the Act and for which no limitation is prescribed.
Since the impugned order is not sustainable, in view of answer to the first question the penalty imposed upon the appellant is certainly unjustified and is illegal. Appeal allowed.
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2009 (5) TMI 399
Penalty- The appellant aggrieved from the passed by the Assistant Director, Enforcement Directorate, Agra, whereby a penalty was imposed upon the petitioner on account of not taking adequate steps to recover the money from a foreign buyer. The Assistant Director imposed a penalty of Rs.90,000/- which was reduced to Rs.60,000/- by the first Appellate Authority. Held that- as (i) No documents relating to liquidation of foreign buyer company has been filed by the appellant (ii) When RBI asked the appellant to obtain the confirmation from Indian High Commission to the effect that foreign buyer was no more in business, this requirement was also not complied with by the appellant. (iii) Even the requirement of the authorized banker to approach RBI for extension of time was not comply with by the appellant so as to take time for realization of export proceeds.
(iv) Regarding correspondence between SBI and Barclays Bank the Appellate Board has also goes to show that the payments were made not by the foreign buyer because the goods were found to be faulty and further it also became clear that the matter was settled amicably by the appellant with the foreign buyer. In these circumstances, the Appellate Authority has rightly held the appellant guilty of the provisions contained under Sections 18(2) and 18(3) of the Foreign Exchange Regulation Act, 1973 and has rightly punished the appellant though by reducing the amount of penalty. No infirmity is found. The appeal is accordingly dismissed.
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