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TMI Blog2014 (2) TMI 783X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants when there was no factual basis for such a conclusion. With the AOs holding that the case of the ED regarding violation of Section 9 (1) (c) FERA was not made out against any of the Appellants, the case regarding violation of Section 8 (1) FERA was untenable since the SCNs in all these cases set out the same allegations to justify the case under both provisions. The question of the Appellants “acquiring” or “otherwise transferring” any foreign exchange as a result of the parent corporation remitting funds to the Appellants for disbursal of the salaries of the employees seconded to them did not arise. Further, the question of the Appellants having to repay the parent corporation the sum paid abroad also did not arise. Factually, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent corporation to its expatriated employees abroad creates any liability on the liaison or branch office to repay the said amount to the parent corporation. 3. The above question, which arises in the context of Section 8 (1) of FERA, was answered in the negative by this Court in its judgment dated 3rd February 2014 in Criminal Appeal No. 40 of 2008 (Mitsubishi Corporation v. Director of Enforcement) . 4. It is agreed on both sides that the facts of these present appeals are more or less identical to the facts in Mitsubishi Corporation. In all these cases the Appellants have in India a liaison or a branch office of the parent corporation which is located abroad. The liaison or branch offices are permitted to operate in India pursuant t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubishi Corporation was argued before this Court, the Respondent had submitted a written note of argument. Mr. Ashok Kumar Panda, learned Senior counsel appearing on behalf of the Respondent in all these appeals, was heard at length. Mr. Panda also handed over written submissions. Mr. Panda was however unable to point out how the facts of these cases are different from the facts in Mitsubishi Corporation. 8. The Court does not wish to repeat what has been stated in Mitsubishi Corporation. The portions of the said judgment which would apply to the present appeals are set out hereunder: 17. In order to appreciate the above submissions, an analysis is proposed to be undertaken of Section 8(1) of the FERA, which reads as under: Except wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be the employees of the parent corporation. They were only seconded to the Appellant. They could not be termed as borrowed employees of the Appellant. The liability to pay their salaries continues to be that of the parent corporation. Since there was no privity of contract between the Appellant and the expatriated employees of the HO, there was no liability on the Appellant to pay their salaries. In the circumstances, the question of the Appellant acquiring any foreign exchange as a result of Mitsubishi Japan remitting funds to the Appellant for disbursal of the salaries of the employees seconded to it does not arise. Further, the question of the Appellant repaying Mitsubishi, Japan the sum paid as salaries also does not arise. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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