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TMI Blog2012 (8) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... inference against the appellant solely on the ground that the appellant has not produced the agreement entered into by the appellant with the two directors as apart from issuing receipts, no agreement was entered into - it was adverse on the part of Tribunal to arrive at a conclusion that an agreement must have been entered into by and between the appellant and the two directors and impose penalty of Rs.34 lacs upon the appellant - the Prothonotary and Senior Master is directed to refund the amount of Rs.7.50 lacs with accrued interest to whom the assessee has deposited with the direction of Court - in favour of assessee. - FEMA APPEAL NO.2 OF 2008 - - - Dated:- 2-8-2012 - J.P. DEVADHAR AND R.Y. GANOO, JJ. Mr. J.J. Bhatt, senior A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellate Tribunal under Section 19(6) ought to be exercised only on a manifest illegality or miscarriage of justice and in extraordinary circumstances and not for the purpose of reappreciating evidence and when there is no question of law involved ? (I) Without prejudice to question (a) to (d) above, whether there was warrant for exercise of jurisdiction under section 19(4) of FEMA read with Section 52(6) of FERA in the appellant's case in as much as the order passed by the Deputy Director, Enforcement Directorate on 29th April, 1999, was on appreciation of facts ? 2) The appellant is a Director of the company known as Renuka Builders Developers Pvt. Ltd. During the year 1995-96, the appellant as a Director of Renuka Builders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Satish Galani were non resident Indians. In reply, it was stated that the statement made by the appellant on 9th September, 1996 to the effect that the two directors in whose name the receipt was received were persons resident outside India merely reflected the knowledge as on the date of recording the statement and not prior thereto. By an order in original dated 24th September, 1999 the Deputy Director, Enforcement Directorate dropped the proceedings by recording a finding that the charges were not proved and that there was no malafide intention in the transactions as the funds from the NRE account to the extent of the amounts paid to the appellant were received back in India by Galani Infin Pvt. Ltd. 4) On 1st June, 2000 FERA was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.11,31,000/- was received from an Indian Company and in Indian currency, the receipts were issued in the name of two directors of that company. While issuing the receipts, the appellant was not aware of the fact that the two directors of the company were non resident Indians. Therefore, the fact that on the date of recording statement, it was known to the appellant that the two directors were non resident Indians cannot be a ground to infer that on the date of issuing the receipt, the appellant was aware of the fact that the two directors were non resident Indians. In the present case, apart from issuing receipts, no agreement was entered into and the Tribunal committed an error in drawing adverse inference against the appellant for not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not produced the agreement entered into by the appellant with the two directors. The specific case of the appellant was that save and except issuing the receipts on account of receiving the token money, no agreement was entered into with the said two Directors. In the absence of any evidence to establish to the contrary, the Tribunal, in our opinion, could not, by adverse inference arrive at a conclusion that an agreement must have been entered into by and between the appellant and the two directors and impose penalty of Rs.34 lacs upon the appellant. The decision of the Tribunal is based on conjectures and not on facts on the basis of which any such an inference could be drawn. 13) For all the aforesaid reasons, we hold that the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X
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