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2016 (4) TMI 715 - HC - FEMAProceedings under Section 51 of the Foreign Exchange Regulation Act, 1973 - Currency seized from the premises of assessee should be confiscated to the Central Government in terms of Section 63 of the Foreign Exchange Regulation Act, 1973 - maintainability of the appeal filed by the respondents before the Tribunal - Held that - A careful comparison of the provisions of the Foreign Exchange Regulation Act, 1973 and the Foreign Exchange Management Act, 1999 would show that there was no post of Special Director under the Foreign Exchange Regulation Act, 1973. Under the Foreign Exchange Management Act, 1999 a Special Director was created only as Appellate Authority, though a person of the rank of Director would also be an Adjudicating Authority. Therefore, the decision in Rama Arangannal 1980 (8) TMI 203 - HIGH COURT OF MADRAS and Mohtesham Mohd. Ismail 2007 (10) TMI 273 - SUPREME COURT will not be of any assistance to the appellant, in view of the fact that the Department could be taken to be an aggrieved person and that the right of appeal under Section 19 of the Foreign Exchange Management Act, 1999 is conferred upon any aggrieved person. Since the Original Order of Adjudication was by the Collector of Customs, nominated under Section 16(1) of the Act, the appeal filed by the Special Director of Enforcement, before the Tribunal cannot be treated as not maintainable. The Department will come within the meaning of the expression aggrieved person . Hence, the preliminary contention regarding the maintainability of the appeal filed by the respondents before the Tribunal, is liable to be rejected. On merits, as rightly observed by the Tribunal, the appellant did not file any appeal as against the finding that he was guilty of violation of Section 9(1)(d) of the Act. The discretion supposedly exercised by the Original Authority to let off the appellant with a penalty of ₹ 25,000/- cannot be approved. First of all we do not think that he had a discretion. Even assuming that he had a discretion, the manner in which the first authority exercised the discretion and the reasoning given by him are wholly unsustainable as can be seen from the extract of para 21 of the order of themOriginal Authority, which reads as follows - However, the case is about 9 years old and since it is an endeavour to complete the adjudication proceedings, under the repealed Foreign Exchange Regulation Act, 1973, I take a lenient view and impose a penalty of ₹ 1,00,000/- (Rupees One Lakh only) on Shri S.M.Sultan, in terms of Section 50 of FERA, 1973. Therefore, we are of the view that the order of the Tribunal does not call for any interference
Issues:
1. Maintainability of Revision filed by Special Director of Enforcement before the Appellate Tribunal for Foreign Exchange. 2. Interpretation of the term "Adjudicating Officer" under the Foreign Exchange Regulation Act, 1973. 3. Comparison of provisions between the Foreign Exchange Regulation Act, 1973 and the Foreign Exchange Management Act, 1999. Issue 1: Maintainability of Revision: The case involved a revision filed by the Special Director of Enforcement before the Appellate Tribunal for Foreign Exchange, challenging the penalty imposed on the appellant. The appellant contended that the Special Director, as an adjudicating authority, cannot be considered an aggrieved person entitled to file a revision. The appellant relied on past judgments to support this argument, emphasizing that quasi-judicial authorities should not be allowed to appeal against orders setting aside their decisions. However, the court analyzed the provisions of both Acts and concluded that the Special Director could be treated as an aggrieved person under the Foreign Exchange Management Act, 1999, thereby rejecting the preliminary objection raised by the appellant. Issue 2: Interpretation of "Adjudicating Officer": The judgment delved into the definition and role of the "Adjudicating Officer" under the Foreign Exchange Regulation Act, 1973 and the Foreign Exchange Management Act, 1999. It highlighted the hierarchy of officers and the appeal mechanisms under both Acts. The court clarified that while the Foreign Exchange Regulation Act, 1973 did not have a provision for a Special Director, the Foreign Exchange Management Act, 1999 introduced the role of a Special Director as an appellate authority. This distinction was crucial in determining the maintainability of the revision filed by the Special Director in this case. Issue 3: Provisions Comparison: A detailed comparison between the provisions of the two Acts was conducted to establish the legitimacy of the Special Director's appeal. The court noted the absence of a Special Director under the Foreign Exchange Regulation Act, 1973, and the creation of the role under the Foreign Exchange Management Act, 1999. This comparison was pivotal in dismissing the appellant's argument based on previous judgments, as the Department was considered an aggrieved party with the right to appeal under the newer Act. The judgment ultimately upheld the decision of the Appellate Tribunal, emphasizing the lack of merit in the appellant's appeal and dismissing it without costs.
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