|
Advanced Search Options
FEMA - Case Laws
Showing 721 to 740 of 1378 Records
-
2008 (12) TMI 850
Issues: Appeal against penalty imposed for contravention of FERA provisions.
Analysis:
1. Background: The appeal was filed against an Adjudication Order imposing a penalty for contravention of FERA provisions regarding receipt and payment of foreign currency without RBI permission. The appellant had pre-deposited a sum as per High Court's order.
2. Investigation: The case originated from the search of a business premises leading to seizure of foreign currencies and documents indicating hawala payments. Payments between the appellant and another individual were made under instructions from a person outside India.
3. Appellant's Argument: The appellant, a broker in gold and silver trade, denied involvement in hawala transactions and claimed his association with the other party was limited to gold transactions. The appellant challenged the lack of independent evidence and argued against the impugned order.
4. Legal Provisions: Section 9 of FERA prohibits individuals in India from receiving or making payments on behalf of persons outside India without authorization. The appellant's defense focused on the nature of transactions related to gold dealings.
5. Decision: The tribunal rejected the appellant's contentions, noting the lack of evidence supporting his claims. The statements and documents seized from the other party implicated the appellant in hawala transactions, despite his denial of knowing the person from the USA.
6. Burden of Proof: The tribunal highlighted the burden of proof on the prosecution and cited legal principles regarding establishing guilt in quasi-criminal proceedings. The tribunal found the appellant guilty of contravening FERA provisions.
7. Penalty Imposition: While upholding the guilt, the tribunal reduced the penalty amount considering the commonality of the amounts involved in the transactions. The penalty was reduced from Rs. 3,74,500 to Rs. 2,00,000, with directions for payment within a specified timeframe.
In conclusion, the tribunal partly allowed the appeal, reducing the penalty amount and directing the appellant to pay the revised penalty within a stipulated period. The decision was based on the evidence, legal provisions, and the appellant's failure to substantiate his defense against the charges of contravening FERA regulations.
-
2008 (12) TMI 849
Issues:
1. Penalty imposed for contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973.
2. Validity of the confessional statement obtained during investigation.
3. Application of retracted confessional statement as evidence.
4. Compliance with statutory regulations and imposition of penalty.
Analysis:
1. The judgment by the Appellate Tribunal for Foreign Exchange addressed an appeal against a penalty imposed for contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973. The appellant, E. Fathima Beevi, received an amount of Rs. 1,00,000 on instructions of her husband, a person resident outside India, without permission from the Reserve Bank of India. The penalty of Rs. 35,000 was adjusted from the blocked amount in the appellant's account. The appellant did not appear, and the appeal was decided based on available facts and evidence.
2. The confessional statement obtained during the investigation was a key point of contention. The appellant claimed the statement was retracted and obtained under coercion. However, the Tribunal found the retraction unsubstantiated and referred to legal precedents emphasizing the voluntary nature of statements obtained by enforcement authorities. The burden of proof lay with the appellant to demonstrate coercion, which was not established.
3. The judgment discussed the admissibility of retracted confessional statements as evidence. Citing legal principles, the Tribunal highlighted that a retracted confession could be relied upon if corroborated sufficiently. In this case, the physical seizure of incriminating documents and circumstantial evidence corroborated the appellant's statement, indicating the truthfulness of the confession.
4. The Tribunal emphasized the importance of compliance with statutory regulations, noting that technical violations did not absolve individuals from liability. Referring to Supreme Court decisions, the Tribunal held that penalties were applicable upon contravention of statutory obligations, irrespective of intent. The appellant's argument of good faith was dismissed, and the penalty was upheld, considering the seriousness of regulatory contraventions.
5. Ultimately, the Tribunal partially allowed the appeal, considering the appellant's circumstances as a housewife who utilized the received amount for legitimate purposes. The penalty was reduced to the amount already adjusted from the blocked sum, taking into account the lengthy pendency of the case and the appellant's suffering. The pre-deposited amount was to be appropriated towards the reduced penalty, ensuring justice in the matter.
-
2008 (12) TMI 848
Issues Involved:
1. Legality of the adjudication order passed by the Special Director, Enforcement Directorate.
2. Maintainability of the revision petitions filed by the Enforcement Directorate.
3. Jurisdiction of the Appellate Tribunal for Foreign Exchange (ATFE) to entertain revision petitions after the repeal of the Foreign Exchange Regulation Act, 1973 (FERA).
4. Authorization of Dr. Shamsuddin, DLA, to file the revision petitions.
5. Delay in filing the revision petitions.
6. Examination of the evidence and the role of respondents as clearing agents in the alleged contravention.
Detailed Analysis:
1. Legality of the Adjudication Order:
The Enforcement Directorate challenged the Adjudication Order No. ADJ/90 to 96/B/SDE/PKA/2000 dated 11th May, 2000, which dropped allegations of contravention of Sections 8(3), 8(4), 64(2), 9(1)(b), 9(1)(d), and 8(1) read with Section 9(1)(f)(i) of the FER Act, 1973, against the respondents. The respondents were alleged to have worked as clearing agents for over-invoiced imported books managed by Naresh T. Mehra. Despite the admissional statement of respondent Mahendra M. Ruparel, the adjudicating officer exonerated the respondents without proper consideration of their involvement.
2. Maintainability of the Revision Petitions:
The Tribunal addressed the maintainability of the revision petitions filed by the Enforcement Directorate under Section 52(4) of the FER Act, 1973. The Tribunal concluded that the revision petitions are maintainable even after the repeal of the FER Act, 1973, by the Foreign Exchange Management Act, 1999 (FEM Act, 1999). The Tribunal emphasized that the provisions of the repealed Act are saved by Section 49(4) of the FEM Act, 1999, and the remedy under the old Act remains available.
3. Jurisdiction of the ATFE:
The Tribunal examined whether it had jurisdiction to entertain revision petitions after the dissolution of the FERA Board. It concluded that the ATFE, as the successor to the FERA Board, has the jurisdiction to entertain revision petitions under Section 52(4) of the FER Act, 1973. The Tribunal held that the legislative scheme and the provisions of the General Clauses Act, 1897, support the continuation of legal proceedings under the repealed Act.
4. Authorization of Dr. Shamsuddin, DLA:
The Tribunal scrutinized the authorization of Dr. Shamsuddin, DLA, to file the revision petitions. The Tribunal noted that the Directorate of Enforcement is not a corporate body, and the revision petitions were not filed by the adjudicating officer involved in passing the impugned order. The Tribunal accepted that Dr. Shamsuddin, DLA, who presented arguments on behalf of the Directorate, was authorized to file the revision petitions.
5. Delay in Filing the Revision Petitions:
The Tribunal addressed the issue of delay in filing the revision petitions, which were filed 1 year, 3 months, and 25 days after the adjudication order. The Tribunal emphasized that while Section 52(4) does not prescribe a limitation period, revision petitions should be filed within a reasonable period. The Tribunal referred to the judgment in E.S.I. Corporation v. C.C. Santhakumar, which highlighted that reasonable time depends on the factual circumstances of each case. The Tribunal found no satisfactory explanation for the delay but held that the revision petitions are maintainable as there was no proof of waiver or acquiescence.
6. Examination of Evidence and Role of Respondents:
The Tribunal noted that the adjudication order lacked a proper discussion on the role of the respondents as clearing agents in the alleged contravention. The Tribunal emphasized that abetment could be committed through intentional aiding, instigating, or engaging in conspiracy, even as a commission agent. The Tribunal referred to the Supreme Court's observations in Collector of Customs, Madras v. D. Bhoormull, which highlighted the burden of proof in quasi-criminal proceedings. The Tribunal found that the adjudication order only discussed the low commission received by the respondents and did not adequately consider their association with Naresh T. Mehra.
Conclusion:
The Tribunal held that the revision petitions are maintainable and quashed the impugned adjudication order concerning the two respondents. The matter was remanded for fresh adjudication by the Adjudicating Officer, who was directed to consider the evidence in detail and decide the matter within four months from 22nd January, 2009.
-
2008 (12) TMI 847
Issues:
1. Appeal against Adjudication Order imposing penalty for contravention of Foreign Exchange Regulation Act.
2. Allegations of contravention of FER Act against the appellant.
3. Retraction of confessional statements by the appellant and co-noticee.
4. Consideration of voluntariness of confessional statements.
5. Corroboration of confessional statements and circumstantial evidence.
6. Reliance on co-noticee's statement as substantive evidence.
7. Burden of proof on the Department in quasi-judicial proceedings.
8. Proof of guilt under sections 8(1) and 8(2) of FER Act.
9. Quantum of penalty imposed and reduction of the same.
Analysis:
The appeal was filed against an Adjudication Order penalizing the appellant for contravening the provisions of the Foreign Exchange Regulation Act (FER Act). The appellant was charged with contraventions related to the purchase and sale of foreign currency. The case involved the appellant, Munilal H. Shah, and his association with individuals engaged in illegal foreign exchange activities. The Enforcement Officers seized Indian currency and documents from the appellant's residence, leading to allegations of unlawful transactions. The appellant's confessional statements, later retracted, were a crucial aspect of the case.
The Tribunal examined the voluntariness of the confessional statements and the appellant's claim of coercion during their recording. The appellant failed to provide substantial evidence supporting the retraction due to alleged physical assault. The Tribunal cited legal precedents emphasizing the importance of voluntary statements and the need for corroboration to rely on retracted confessions. The appellant's inability to explain the seized amount and his association with co-noticee further incriminated him.
The Tribunal considered the co-noticee's statement as substantive evidence against the appellant, rejecting the retraction as an afterthought. It highlighted the burden of proof on the Department in quasi-judicial proceedings and the standard of proof required under the FER Act. The Tribunal referenced legal principles to establish guilt under the Act and emphasized the need for a degree of probability rather than absolute certainty in proving charges.
Ultimately, the Tribunal upheld the appellant's guilt under sections 8(1) and 8(2) of the FER Act. However, it deemed the penalty imposed excessive and reduced it to the amount already pre-deposited by the appellant. The decision aimed to achieve the ends of justice by adjusting the penalty amount. The appeal was partly allowed, and the pre-deposited penalty amount was to be appropriated accordingly.
-
2008 (12) TMI 846
Issues:
1. Contravention of provisions of Section 9(1)(b) of the Foreign Exchange Regulation Act, 1973.
2. Cross-examination of witnesses and its relevance in the case.
3. Burden of proof in economic offenses under FERA, 1973.
Analysis:
1. The appeal was filed against an Adjudication Order imposing a penalty for contravention of Section 9(1)(b) of FERA, 1973. The appellant received a payment from a person resident outside India, as revealed during investigations following a seizure of documents from another individual, Mohanlal. The appellant denied receiving any payment and argued lack of evidence against him. However, the tribunal found a clear link between Mohanlal and the appellant based on seized documents and the appellant's association with the firm mentioned in the documents. The tribunal upheld the guilt of the appellant under Section 9(1)(b) due to the established link and lack of explanation for the association.
2. The appellant raised the issue of not being allowed to cross-examine witnesses, specifically Mohanlal. However, it was noted that the appellant did not make a separate application for cross-examination of witnesses, including Mohanlal, before the Adjudicating Officer. Citing a Supreme Court ruling, the tribunal emphasized that the denial of cross-examination without sufficient reason does not violate principles of natural justice. The tribunal found no merit in the appellant's argument regarding the denial of cross-examination, as there was no specific request made for Mohanlal's cross-examination and no valid reason provided for the same.
3. The tribunal discussed the burden of proof in economic offenses under FERA, 1973, emphasizing that the prosecution is not required to prove its case with mathematical precision. Referring to a Supreme Court case, it was highlighted that legal proof does not require absolute certainty but a degree of probability that a prudent person may believe in the existence of the fact in issue. The tribunal concluded that the impugned order correctly established the guilt of the appellant under Section 9(1)(b) and the penalty imposed was commensurate with the violations. The appeal was dismissed, affirming the impugned order and appropriating the pre-deposited amount towards the penalty.
-
2008 (12) TMI 845
Issues Involved:
1. Contravention of Section 8(1) of the Foreign Exchange Regulation Act, 1973.
2. Non-compliance with pre-deposit order dated 5-8-2005.
3. Dismissal of appeals for non-compliance.
Detailed Analysis:
Issue 1: Contravention of Section 8(1) of the Foreign Exchange Regulation Act, 1973
The appeals were filed against various adjudication orders for contravention of Section 8(1) of the Foreign Exchange Regulation Act, 1973. The appellant was penalized for unauthorizedly acquiring and transferring foreign currency, which was used for the purchase and payment of second-hand cars imported from Dubai. The penalties imposed ranged from Rs. 3,000 to Rs. 65,000, as detailed in the appeals listed from Appeal No. 40/1997 to Appeal No. 210/1997.
Issue 2: Non-compliance with Pre-deposit Order Dated 5-8-2005
Despite multiple notices, the appellant failed to appear or be represented in the proceedings. The Tribunal had previously allowed the appellant to make a pre-deposit of 10% of the penalty while dispensing with 90% of the penalty. However, the appellant did not comply with this order. The Tribunal noted that the appellant has "miserably failed to comply with this Tribunal's order dated 5-8-2005," making the appeals non-maintainable under Section 52(2) of the Foreign Exchange Regulation Act, 1973.
Issue 3: Dismissal of Appeals for Non-compliance
The Tribunal highlighted the legal provisions under Section 52(2) of the Foreign Exchange Regulation Act, 1973, which mandate the deposit of the penalty amount as a prerequisite for filing an appeal. The Tribunal emphasized that the language of the Second Proviso to Section 52(2) is "plain and unambiguous," and does not allow for reinterpretation due to harsh consequences. The Tribunal referred to the Apex Court judgment in Nasiruddin v. Sita Ram Agarwal [2003] 2 SCC 577 to support this interpretation.
The Tribunal concluded that the appellant failed to make the required pre-deposit of even 10% of the penalty within the allowed period, showing a lack of bona fides. Consequently, the appeals were dismissed for non-compliance with the pre-deposit order dated 5-8-2005. The Tribunal directed the appellant to deposit the penalty amount within a week from the date of receipt of the order, failing which the Enforcement Directorate may recover the same in accordance with the law.
Conclusion
The appeals were dismissed due to the appellant's failure to comply with the pre-deposit order, and the appellant was directed to deposit the penalty amount within a specified timeframe. The Tribunal's decision was based on the clear statutory requirements under Section 52(2) of the Foreign Exchange Regulation Act, 1973, and reinforced by relevant judicial precedents.
-
2008 (12) TMI 844
Issues:
1. Penalty imposed for contravention of sections 9(1)(a) and 9(1)(d) of FER Act.
2. Receipt of gift cheques from NRE account without permission.
3. Burden of proof on appellants regarding love and affection with donor.
4. Application of statutory provisions in the case.
5. Rejection of arguments based on the Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunity and Exemption) Act, 1991.
Analysis:
1. The judgment involves five appeals against an Adjudication Order imposing penalties for contravention of sections 9(1)(a) and 9(1)(d) of the FER Act. The appellants received gift cheques from an NRE account without proper permission, leading to the penalties. The appeals were taken up for final disposal on merits.
2. The arguments presented by the appellants included the contention that the receipt of gift cheques from an NRE account was allowed under the Remittances of Foreign Exchange and Investment Act, 1991. They claimed that no outflow of foreign currency occurred, and thus, the penalties were unjustified. However, the tribunal found the arguments unconvincing and raised questions about the nature of the relationship between the donors and appellants.
3. The burden of proof regarding the love and affection between the donors and appellants was a crucial aspect of the judgment. The tribunal highlighted that the appellants failed to provide sufficient explanation for the high-value gifts received. The judgment emphasized the need for a natural connection between individuals for such gifts, which was lacking in this case. The tribunal applied legal principles regarding burden of proof and presumption of facts to analyze the situation.
4. The judgment also discussed the application of statutory provisions, noting that the Remittances of Foreign Exchange and Investment Act, 1991, did not exempt the appellants from the provisions of the FER Act. The tribunal rejected arguments based on statutory protection and reaffirmed the applicability of sections 9(1)(a) and 9(1)(d) of the FER Act in the case.
5. Finally, the tribunal upheld the impugned order, dismissing the appeals for lack of merit. It concluded that the penalties imposed were reasonable and correct, considering the contravention of the FER Act. The judgment emphasized the need for appellants to provide adequate explanations and evidence in such cases to avoid adverse presumptions. The arguments based on statutory provisions were rejected, leading to the dismissal of the appeals.
-
2008 (12) TMI 843
Issues Involved:
1. Contravention of Section 9(1)(d) and Section 8(1) r/w Section 68 of the Foreign Exchange Regulation Act, 1973.
2. Allegations of unauthorized transfer of US dollars 40,000/-.
3. Applicability of RBI's Circular No. AD (MA) Circular No. 13 dated 12.3.1992.
4. Quantum of penalty imposed.
Detailed Analysis:
1. Contravention of Section 9(1)(d) and Section 8(1) r/w Section 68 of the Foreign Exchange Regulation Act, 1973:
The appellants were penalized for making expenses and payments on behalf of their wholly-owned subsidiary in the USA, M/s. Leela Industries Ltd. The Tribunal noted that the RBI's approval letter dated 14.7.1994 imposed a condition that expenses for representatives visiting abroad for the subsidiary's business should be borne by the subsidiary itself. The appellant Veenu Krishnan's visits to the USA, during which he attended to the subsidiary's work, were funded by the appellant company, violating this condition. The Tribunal concluded that this constituted a contravention of Section 9(1)(d) of the FER Act, 1973, as the expenses were not borne by the subsidiary but by the appellant company.
2. Allegations of Unauthorized Transfer of US dollars 40,000/-:
The Tribunal examined the transfer of US dollars 40,000/- to the USA between February and May 1994, before the subsidiary's incorporation on 19.7.1994. It was argued that these funds were for the Liaison Office, not the subsidiary. However, the Tribunal found that these transfers were closely linked to the establishment of the subsidiary and were taken over by it, thus requiring RBI's permission, which was not obtained. This constituted a violation of Section 8(1) of the FER Act, 1973.
3. Applicability of RBI's Circular No. AD (MA) Circular No. 13 dated 12.3.1992:
The appellants contended that the RBI's Circular No. AD (MA) Circular No. 13 dated 12.3.1992 permitted the remittance. However, the Tribunal found that this circular was not applicable to the transaction involving the transfer of US dollars 40,000/- to the USA for the benefit of the wholly-owned subsidiary established immediately after the transfer. The breach of Condition No. 5 of the RBI's approval letter was evident, and the appellants' argument was rejected.
4. Quantum of Penalty Imposed:
The Tribunal upheld the penalties imposed by the adjudicating officer, finding them not excessive given the amounts involved. The Tribunal referred to the Supreme Court's observations in The Chairman, SEBI v. Sriram Mutual Fund & Anr., emphasizing that penalties under regulatory statutes must be imposed strictly to ensure compliance. The appellants' conduct was deemed contumacious and likely to cause serious economic damage, justifying the penalties.
Conclusion:
The appeals were dismissed, and the penalties imposed by the adjudicating officer were affirmed. The Enforcement Directorate was directed to appropriate the pre-deposited amounts towards the penalties, and the appellants were ordered to deposit the remaining penalty amounts within seven days. The judgment emphasized the seriousness of regulatory compliance under the FER Act, 1973.
-
2008 (12) TMI 842
Issues:
- Penalty imposed for contravention of Section 9(1)(e) FER Act
- Acceptance of fixed deposits from NRIs
- Compliance with RBI guidelines
- Delay in adjudication proceedings
- Violation of principles of natural justice
- Confiscation of deposited amount
- Registration requirement for non-banking finance company
- Role of power of attorney holder in making deposits
- Legality of impugned order
Analysis:
1. Penalty Imposed for Contravention of Section 9(1)(e) FER Act:
The judgment involves appeals against a penalty imposed by the Enforcement Directorate for contravention of Section 9(1)(e) of the Foreign Exchange Regulation Act (FER Act) on the basis of fixed deposits accepted from NRIs.
2. Acceptance of Fixed Deposits from NRIs:
The appellant firm accepted fixed deposits totaling Rs. 1,05,70,000 from 7 NRIs, leading to allegations of placing sums to the credit of non-resident persons in violation of the FER Act. The Enforcement Directorate contended that the deposits were arranged by individuals holding Power of Attorney on behalf of NRIs.
3. Compliance with RBI Guidelines:
The appellants argued that they operated within the guidelines of the RBI, as deposits from NRIs with maturity periods not exceeding 3 years were permissible. They also highlighted a request made to the RBI seeking permission for 5-year deposits, which was responded to with a 3-year limit on non-repatriation basis.
4. Delay in Adjudication Proceedings and Natural Justice Violation:
The appellants raised concerns regarding the excessive delay in adjudication proceedings, spanning about 7 years, and the failure to provide relied-upon documents despite repeated requests. They argued that the impugned order was tainted by these delays and procedural violations.
5. Confiscation of Deposited Amount and Registration Requirement:
The Enforcement Directorate contended that the appellant firm, being a non-banking finance company, could only accept deposits from NRIs after obtaining registration with the RBI. They argued that the general permission under RBI guidelines did not apply without such registration.
6. Role of Power of Attorney Holder and Legality of Impugned Order:
The Tribunal considered whether a Power of Attorney holder could make fixed deposits on behalf of NRIs or if the depositors themselves had to make the deposits. It was concluded that the impugned order did not withstand legal scrutiny, as there was no restriction in the FER Act against activities performed through a Power of Attorney holder.
7. Conclusion and Decision:
Based on the analysis, the Tribunal found merit in the appeals and quashed the impugned order, directing the return of the confiscated amount and the pre-deposit amount of Rs. 6 lakhs to the appellant firm within 2 weeks. The judgment emphasized the legality of activities conducted through a Power of Attorney holder and the need for compliance with RBI guidelines for accepting deposits from NRIs.
-
2008 (12) TMI 841
Issues Involved:
1. Challenge to the common Adjudication Order imposing penalties.
2. Compliance with pre-deposit order.
3. Allegations of non-recovery of export proceeds.
4. Reasonableness of steps taken for recovery.
5. Jurisdiction and authority of the Special Director as Adjudicating Officer.
Detailed Analysis:
1. Challenge to the common Adjudication Order imposing penalties:
The appellants challenged the Adjudication Order No. ADJ/63/B/SDE/AKB/2001, dated 18-12-2001, which imposed a penalty of Rs. 15 lakhs against the appellant company and Rs. 15 lakhs against each of the other appellants for contravening section 18(2) read with sections 18(3) and 68 of the Foreign Exchange Regulation Act, 1973. The penalties were imposed due to the failure to take reasonable steps to recover the outstanding price of US dollars 7,20,000 after exporting goods to M/s. Prism Jewellers, Dubai.
2. Compliance with pre-deposit order:
The Tribunal initially rejected the applications for dispensation of pre-deposit of the penalty but allowed the appellants to make the pre-deposit within 30 days. The appellants challenged this order before the Bombay High Court, which modified the pre-deposit requirement to 50% of the penalty. The appellants complied with this modified order. The Tribunal had dismissed the appeals for non-compliance with the original pre-deposit order but restored them after the High Court's intervention.
3. Allegations of non-recovery of export proceeds:
The appellants argued that the unrecovered price was only US dollars 7,20,000, not US dollars 10,01,205 as alleged. They claimed to have written letters to the foreign buyer, who cited financial constraints, and sought an extension from the authorized dealer, which was not granted. They also filed a suit in the Bombay High Court in 1999 against the foreign buyer, who had disappeared, making recovery impossible.
4. Reasonableness of steps taken for recovery:
The Tribunal noted that exporters are obliged to take reasonable steps for repatriation of export proceeds. The term "reasonable" was analyzed, and it was concluded that merely writing letters within six months did not meet this standard. The filing of a suit two years later did not displace the adverse presumption under section 18(3). The appellants failed to prove that they surrendered proportionate export incentives or met the conditions for waiver outlined in the RBI's Master Circular.
5. Jurisdiction and authority of the Special Director as Adjudicating Officer:
The appellants contended that the Special Director, who passed the impugned order, fell below the rank of Assistant Director and thus lacked jurisdiction. The Tribunal rejected this argument, stating that the hierarchical order described in section 3 of the FER Act, 1973, did not imply a fixed rank for adjudicating officers. It was also noted that the Central Government could entrust functions to any officer under section 5 of the Act, and the Special Director could be appointed from other departments like Customs or Excise.
Conclusion:
The Tribunal found no merit in the appeals and affirmed the impugned order. The appellants were directed to deposit the remaining penalty within a week, failing which the respondent could recover it in accordance with the law. The Enforcement Directorate was allowed to appropriate the pre-deposit amount towards the penalty.
-
2008 (12) TMI 840
Issues Involved:
1. Contravention of Sections 9(1)(b) and 16(1)(a) of the Foreign Exchange Regulation Act (FERA), 1973.
2. Validity of confessional statements.
3. Quantum of penalty imposed.
4. Applicability of Section 72 of the FERA.
5. Liability of partnership firm versus individual partner.
Issue-wise Detailed Analysis:
1. Contravention of Sections 9(1)(b) and 16(1)(a) of the FERA, 1973:
The appellants were charged with receiving payments from Paris on behalf of a person resident outside India without the permission of the Reserve Bank of India (RBI), as per Section 9(1)(b) of the FERA. Additionally, they were charged under Section 16(1)(a) for failing to receive payments amounting to Rs. 5,62,392 from abroad. The evidence revealed that M/s. Anbu Textiles exported goods to Paris, under-invoiced the goods, and received the differential amount through unauthorized channels. The appellants were found guilty by the Adjudicating Officer for these contraventions.
2. Validity of Confessional Statements:
The appellants argued that their confessional statements were obtained under threat and coercion and should not be considered. However, the Tribunal noted that the burden of proving coercion was on the appellants, which they failed to discharge. The statements were detailed and corroborated by other evidence, including the statements of K. Thirugnanasambandam and the seized documents. The Tribunal cited Supreme Court rulings, emphasizing that retracted confessional statements could still be valid if corroborated by other evidence.
3. Quantum of Penalty Imposed:
The penalties imposed were Rs. 1,00,000 against M/s. Anbu Textiles, Rs. 50,000 against K. Sadasivam, Rs. 1,00,000 against Mohan, and Rs. 2,50,000 against K. Sadasivam for various contraventions. The Tribunal found the penalties to be commensurate with the violations and not excessive. The pre-deposited amounts were to be appropriated towards the penalties, and the appellants were directed to pay the balance within 15 days.
4. Applicability of Section 72 of the FERA:
Section 72 of the FERA allows the court to presume the contents of seized documents as true. The Tribunal found that the documents seized from M/s. Shamina Deluxe Theatre and explained by K. Thirugnanasambandam were sufficient to prove the charges against the appellants. The nexus between the appellants and the seized documents was established, and the Tribunal rejected the argument that the documents could not be read against the appellants.
5. Liability of Partnership Firm versus Individual Partner:
The Tribunal referred to the ruling of the Hon'ble High Court of Kolkata in Tarak Nath Sen v. Union of India, which stated that a partnership firm is a compendium name of its partners, and both cannot be held guilty for the same contravention simultaneously. Therefore, the Tribunal decided to absolve M/s. Anbu Textiles from any penalty for the charges and to realize the penalty amount only from the partner, K. Sadasivam.
Conclusion:
The appeals were partly allowed concerning the penalty against M/s. Anbu Textiles, but the other penalties were upheld. The Tribunal directed the appellants to deposit the balance amount of the penalty within 15 days, failing which recovery would be initiated as per the law. The Tribunal found no error in the impugned order and sustained it, emphasizing the gravity of the offenses and the sufficiency of the evidence against the appellants.
-
2008 (12) TMI 839
Issues:
1. Confirmation of penalty against two companies and their directors for contravention of FEM Act.
2. Dispute regarding the nature, quality, and value of goods imported compared to declarations.
3. Jurisdiction of Adjudicating Authority in the matter.
4. Arguments regarding the confirmation of penalty by Special Director (Appeals).
5. Violation of FEM Act by not using remitted foreign exchange for declared purpose.
6. Evidence presented by National Metallurgical Laboratory.
7. Independence of proceedings under FEM Act from other enactments.
8. Interpretation of FEM Act and regulatory offenses.
9. Quantum of penalty imposed and its justification.
Analysis:
The judgment by the Appellate Tribunal for Foreign Exchange, New Delhi involved two appeals against penalties imposed for contravention of the FEM Act. The penalties were confirmed against two companies and their directors for misusing foreign exchange remitted abroad for import of goods, which were found to be different in nature, weight, and value from declarations made. The Adjudicating Authority's orders were upheld by the Special Director (Appeals), leading to the appeals before the Tribunal. The investigations revealed discrepancies in the goods imported by the companies, leading to the charges against them.
The appellants argued that the Adjudicating Authority lacked jurisdiction as the matter was subjudice before the CESTAT. They disputed the findings of the National Metallurgical Laboratory and claimed that no conclusive basis existed for the charges against them. On the other hand, the respondent contended that the appellants violated the FEM Act by not using the remitted foreign exchange for the declared purpose of importing goods. The evidence presented, including statements from company officials and laboratory reports, supported the charges against the appellants.
The Tribunal examined the statutory provisions of the FEM Act, emphasizing the obligation of importers to use remitted foreign exchange for the intended purpose. It concluded that the appellants had indeed misdeclared the goods imported, as evidenced by the investigations and statements provided. The Tribunal rejected the argument that the proceedings should be stayed pending other enactments, emphasizing the independence of proceedings under the FEM Act. The judgment highlighted the regulatory nature of offenses under the Act and the legislative intent to protect the country's economic interests.
Regarding the quantum of penalty, the Tribunal found it commensurate with the violations committed by the appellants. It upheld the penalties imposed, considering the gravity of the offense. However, in one appeal involving a partner of a firm, the Tribunal followed a ruling absolving the partner from penalties imposed on the firm. The judgment directed the appellants to deposit the balance of the penalties within a specified timeframe, failing which recovery would be pursued by the respondent in accordance with the law.
-
2008 (12) TMI 838
Issues:
1. Imposition of penalty for contravention of FERA, 1973.
2. Compliance with pre-deposit requirement.
3. Failure to appear during hearings.
4. Contention regarding lack of legally admissible evidence.
5. Consideration of confessional statement.
6. Reliance on show-cause notice and supporting documents.
7. Legal analysis of the confessional statement.
8. Admissibility of fax message as evidence.
9. Upholding of the impugned order and penalty imposition.
Analysis:
1. The judgment pertains to an appeal against the imposition of a penalty under FERA, 1973 for acquiring foreign exchange and making payments in contravention of specific sections. The penalty was imposed based on the findings of the Assistant Director, Enforcement Directorate.
2. The appellant was directed to deposit a pre-determined amount as a pre-deposit, which was complied with as per the Tribunal's direction.
3. Despite multiple hearing dates being set, the appellant failed to appear or be represented, leading to the final disposal of the appeal on merit due to the statutory requirement of disposing of appeals within a specified timeframe.
4. The main contention raised was the lack of legally admissible evidence supporting the impugned order, primarily relying on the appellant's statement without additional concrete evidence.
5. The argument revolved around the confessional statement made under FERA, 1973 by the appellant, admitting to certain transactions involving foreign exchange, which formed the basis of the penalty imposition.
6. The show-cause notice issued to the appellant referenced various documents, including letters, cheques, and statements, to establish the contravention of FERA sections, forming the basis for the penalty.
7. The judgment extensively analyzed the legal position regarding the admissibility and credibility of confessional statements, emphasizing the voluntary nature and the need for corroboration to establish the truthfulness of such statements.
8. The admissibility of a fax message as evidence was discussed, highlighting that irregularities in recovery do not render evidence inadmissible, citing relevant legal precedents to support the admissibility of seized documents.
9. Ultimately, the Tribunal upheld the impugned order, dismissing the appeal for lack of merit and directing the appellant to deposit the remaining penalty amount within a specified timeframe, failing which recovery would be pursued by the Enforcement Directorate in accordance with the law.
-
2008 (12) TMI 31
What would be the effect of a retracted confession for the purpose of levy of penalty under FERA, 1973 - violation of Section 8(3) and 9(1)(a) - remittance of the foreign exchange worth US Dollars - no reliance should be placed on the retracted confessional statement unless the same was corroborated by some independent evidence - order of the Tribunal and HC cannot be sustained – assessee’s appeal is allowed - amount which is with the Department shall be refunded to the appellant
-
2008 (11) TMI 754
Issues Involved:
1. Admissibility of documents seized from a third party.
2. Admissibility and voluntariness of the confessional statement.
3. Requirement of corroboration for the confessional statement.
4. Failure to hold joint proceedings under Section 72 of the Foreign Exchange Regulation (FER) Act, 1973.
5. Quantum of penalty imposed.
Issue-wise Detailed Analysis:
1. Admissibility of Documents Seized from a Third Party:
The appellant argued that the impugned order was based on entries recorded in documents seized from the residence of a third party, P. Popatlal Shah, who was not tried jointly, violating Section 72 of the FER Act, 1973. The appellant contended that the failure to hold joint proceedings rendered the documents inadmissible in evidence.
2. Admissibility and Voluntariness of the Confessional Statement:
The appellant's confessional statement, where he admitted to receiving Rs. 3 lakhs locally in India under the instruction of his brother-in-law from London, was a key point of contention. The appellant did not retract this statement at any point. The tribunal referred to the Supreme Court's observations in State (NCT of Delhi) v. Navjot Sandhu @ Afsan Guru, which clarified the conditions under which confessions are admissible. The tribunal emphasized that confessions must be voluntary and true, and in this case, the appellant's statement was deemed voluntary as it was not retracted.
3. Requirement of Corroboration for the Confessional Statement:
The appellant argued that without corroborative evidence, the confessional statement should not be the basis of conviction. The tribunal cited several Supreme Court decisions, including Kanhaiyalal v. Union of India, which held that confessional statements made voluntarily and free from threat or inducement can be presumptive evidence of their truth and do not require corroboration for each material particular. The tribunal found that the appellant's confessional statement was corroborated by available documents, thus supporting the impugned order.
4. Failure to Hold Joint Proceedings under Section 72 of the FER Act, 1973:
The appellant contended that the impugned order was vitiated due to the failure to hold joint proceedings against P. Popatlal Shah under Section 72 of the FER Act, 1973. The tribunal noted that the appellant admitted to receiving payment locally in India under the instruction of his brother-in-law, a resident of London. The documents mentioning the appellant's name and his wife's name, showing the payment made, required explanation. The tribunal applied the presumption of fact under Section 114 of the Evidence Act, concluding that the absence of an explanation could not negate the presumption of truthfulness.
5. Quantum of Penalty Imposed:
The appellant argued that the penalty imposed was excessive. The tribunal found that the penalty of Rs. 1 lakh was not excessive or harsh compared to the amount of contravention involved. Therefore, no intervention was required regarding the quantum of penalty.
Conclusion:
The tribunal concluded that the impugned order was justified and sustained. The appeal was dismissed, and the appellant was directed to deposit the balance penalty amount within 7 days from the date of receipt of the order. Failure to comply would result in the respondent taking appropriate action in accordance with the law.
-
2008 (11) TMI 753
Issues Involved:
1. Validity of the adjudication order imposing a penalty for contravention of Section 9(1)(b) and 9(1)(d) of FER Act, 1973.
2. Admissibility and voluntariness of the appellant's confession.
3. Requirement and denial of cross-examination of witnesses.
Issue-wise Detailed Analysis:
1. Validity of the Adjudication Order:
The appellant challenged the Adjudication Order No. ADE/AC/IV/03/99 dated 30.7.1999, which imposed a penalty of Rs. 12 lakhs for contravening Section 9(1)(b) and 9(1)(d) of the FER Act, 1973. The appellant was accused of receiving Rs. 80 lakhs on the instructions of one Unnipappa and distributing Rs. 79,75,000 to different persons. The Tribunal, while disposing of the application for dispensation of pre-deposit of penalty, allowed partial dispensation and directed the appellant to deposit 50% of the penalty. The Delhi High Court later reduced this amount to 10%, which the appellant complied with. The Tribunal affirmed the impugned order, stating that it did not suffer from any illegality and the penalty imposed was appropriate and not excessive.
2. Admissibility and Voluntariness of the Appellant's Confession:
The main evidence against the appellant included a retracted confession, recovered chits, and statements from seven persons who received money. The appellant argued that the confession was obtained under threat and coercion. The Tribunal referred to the Supreme Court's judgment in State (NCT) Delhi v. Navjot Sandhu, which outlines that a confession must be voluntary and true to be admissible. The Tribunal noted that there was no substantial evidence to support the appellant's claim of coercion. It emphasized that the burden of proving coercion lies with the appellant, and in its absence, the confession is presumed voluntary and true. The Tribunal also referred to K.T.M.S. Mohd. v. UOI, highlighting that the voluntary nature of a statement is crucial, and the appellant failed to establish any improper means used to obtain the confession.
3. Requirement and Denial of Cross-Examination of Witnesses:
The appellant requested cross-examination of witnesses who allegedly received money or worked as investigators. The Tribunal held that the demand for cross-examination must be supported by sound reasons. It cited the judgment in Transmission Corporation of A.P. Ltd. v. Ramakrishna Rice Mills, which states that cross-examination is not obligatory without valid reasons. The Tribunal concluded that the denial of cross-examination alone does not invalidate the impugned order, referencing the Kerala High Court's judgment in Director Enforcement Directorate FER Act. v. Alfred James Fernandez, which does not rule out the arrival of guilt without cross-examination. The Tribunal maintained that principles of natural justice are flexible and can be adapted to circumstances, and quasi-criminal cases depend on facts rather than precedents.
Conclusion:
The Tribunal dismissed the appeal, affirming the impugned order and the penalty imposed. The appellant was directed to deposit the remaining penalty amount within seven days, failing which the Enforcement Directorate could recover it according to the law.
-
2008 (11) TMI 752
Issues:
- Failure to realize and repatriate outstanding export proceeds under FER Act, 1973
- Appellant's contentions regarding RBI's failure to release funds, inaction of authorized dealer, and non-realization of export proceeds
- Interpretation of sections 18(2) and 18(3) of FER Act, 1973
- Examination of evidence regarding steps taken by the appellant for realization of export proceeds
- Comparison of appellant's case with cited case law SRC Export Private Ltd. v. Director of Enforcement
- Rebuttable presumption under section 18(3) of FER Act, 1973
- Applicability of cited decision of erstwhile FERA Board
- Consideration of penalty imposed and its justification
Analysis:
The judgment by the Appellate Tribunal for Foreign Exchange, New Delhi, pertains to an appeal against an adjudication order imposing a penalty on the proprietor of an appellant firm for failure to realize and repatriate outstanding export proceeds under the FER Act, 1973. The appellant had made a pre-deposit of a portion of the penalty amount as directed by the tribunal. The main contentions raised by the appellant included the RBI's alleged failure to release funds, the inaction of the authorized dealer, and the circumstances leading to the non-realization of export proceeds due to the foreign buyer's default and auction of goods by port authorities at the destination.
The tribunal examined the provisions of sections 18(2) and 18(3) of the FER Act, 1973, emphasizing that an exporter is required to take reasonable steps for the realization of export proceeds. It highlighted that reasonableness is a factual determination and may vary case by case. The tribunal referenced Supreme Court observations on the definition of "reasonable" to underscore the contextual nature of the term in legal proceedings.
Regarding the evidence presented, the tribunal noted a lack of proactive steps taken by the appellant within the prescribed period for realizing export proceeds. Correspondence with port authorities and the RBI indicated delayed actions by the appellant, leading to adverse inferences against them. The tribunal also dismissed the appellant's reliance on the SRC Export Private Ltd. case, asserting that the factual context differed from the present case.
The judgment delved into the applicability of the cited decision of the erstwhile FERA Board, emphasizing the need to consider factual nuances in legal precedents. It cautioned against blind reliance on past judgments without contextual analysis. The tribunal ultimately upheld the penalty imposed, deeming it neither excessive nor harsh, and dismissed the appeal. The appellant was directed to deposit the balance penalty amount within a specified timeframe, failing which the respondent could recover it in accordance with the law.
-
2008 (11) TMI 655
Issues Involved:
1. Pre-execution challenge to a preventive detention order.
2. Exhaustiveness of grounds for pre-execution challenge as per Alka Subhash Gadia's case.
3. Non-placement of relevant materials before the Detaining Authority.
4. Impact of retractions on the legality of the detention order.
5. Continuation of detention order despite cessation of alleged illegal activities.
Issue-Wise Detailed Analysis:
1. Pre-execution challenge to a preventive detention order:
The petitioner challenged the detention order dated 22.05.2008 under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, at a pre-execution stage. The respondents objected, citing precedents like State of Maharashtra vs. Bhaurao Punjabrao Gawande and Alka Subhash Gadia, arguing that such petitions should not be entertained before the petitioner's arrest or surrender.
2. Exhaustiveness of grounds for pre-execution challenge as per Alka Subhash Gadia's case:
The Court examined the decision in Alka Subhash Gadia, which outlined five grounds for pre-execution challenges. The Court clarified that these grounds are illustrative, not exhaustive, emphasizing that judicial review should not be mechanically restricted. The Court stated, "It would be an altogether different thing to say that the five grounds for entertaining such a petition at a pre-execution stage mentioned in Smt. Alka Subhash Gadia's case (supra) are exhaustive. In our opinion, they are illustrative and not exhaustive."
3. Non-placement of relevant materials before the Detaining Authority:
The petitioner argued that the Detaining Authority did not consider relevant materials, including retractions by key witnesses. The Court agreed, noting that crucial documents like retractions were not placed before the Detaining Authority, which could have influenced the decision. The Court cited precedents that non-placement of such materials vitiates the detention order, stating, "Failure to place the retractions and other materials referred to in paragraph 4 of the petition before the Detaining Authority would certainly vitiate the impugned detention order."
4. Impact of retractions on the legality of the detention order:
The Court highlighted that retractions of confessions must be considered by the Detaining Authority. The failure to do so invalidates the detention order. The Court referenced multiple precedents, including Ashadevi vs. K. Shivraj, emphasizing that "it was the duty of the Customs Officer to have reported the retraction of the statements to the Detaining Authority."
5. Continuation of detention order despite cessation of alleged illegal activities:
The petitioner claimed that he ceased the alleged illegal activities in 2006, making the detention order redundant. The Court noted that this argument was unnecessary to address, as the petition was already allowed on the grounds of non-placement of relevant materials. However, the Court acknowledged the argument by referring to Maqsood Yusuf Merchant vs. Union of India, where it was held that continuing a detention order after cessation of activities would be futile.
Conclusion:
The Court quashed the detention order, emphasizing the importance of liberty under Article 21 of the Constitution and the necessity for Detaining Authorities to consider all relevant materials, including retractions. The judgment underscored that the grounds for pre-execution challenges are not limited to those listed in Alka Subhash Gadia and that judicial review should be flexible to ensure justice. The writ petition was allowed, and the detention order dated 22.05.2008 was quashed.
-
2008 (11) TMI 53
Application for waiver of pre-deposit - appellants have not made out a prima facie case for the grant of waiver of pre-deposit - appellant, does not bring out any case of “undue” hardship - mere fact that over a decade ago the Tribunal had waived the pre-deposit in some of the appellants’ appeals can hardly suffice to grant similar relief in the present case - Tribunal for Foreign Exchange was right in rejecting the applications made by the Appellants for waiver of the pre-deposit of penalty
-
2008 (10) TMI 739
Issues: Non-compliance with pre-deposit order for filing appeal under FERA, 1973
The judgment delivered by Km. Vijay Laxmi, Member of the Appellate Tribunal for Foreign Exchange pertains to an appeal filed against an Adjudication Order imposing a penalty for contravention of provisions of the Foreign Exchange Regulation Act, 1973. The appellant, Gurmeet Singh, failed to comply with the order directing him to deposit the penalty amount within 30 days. Despite being given multiple opportunities, the appellant did not appear before the Tribunal to explain the non-compliance. The Enforcement Directorate confirmed the service of notice through affixation. The appellant's failure to comply with the pre-deposit order and lack of appearance demonstrate a lack of bona fide on his part.
The appellant's representative argued that the appeal should be dismissed due to the non-compliance with the pre-deposit order, as required under the statutory scheme of the FERA, 1973. Section 52(2) of the Act mandates that any person aggrieved by an order must deposit the penalty amount within 45 days of the order before filing an appeal. The Tribunal may entertain an appeal after the 45-day period if satisfied with the reasons for delay. However, in this case, the appellant did not provide any justifiable grounds for the non-compliance, leading to the conclusion that equity does not favor him, and the appeal is liable to be dismissed.
In conclusion, the Tribunal held that under the statutory scheme, appellants must file an appeal simultaneously with the penalty amount unless dispensation is granted. In this case, since the appellant failed to comply with the pre-deposit order and did not present any valid reasons for the delay, the appeal was dismissed. The record of the appeal was directed to be consigned to the Record Room, marking the end of the legal proceedings in this matter.
............
|
9911796707
