9911796707
TMI Blog2019 (10) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... ector affirmed the order of the Adjudication Authority on his self-innovated and imaginary reasoning, neither based on any evidence nor based on any material but based on assumptions and presumptions arrived at by indulging in an intellectual flight of imagination. While arriving at the guilt the Special Director devised his own fresh reasoning, contrary to material on record and without complying with the law of evidence and in derogation of the principles of natural justice un-confronted tried to justify the order by creating an imaginary basis for attributing the name of the trust to the first alphabet of the names of the appellants but in this exercise also he could not find anything to refer to the alphabet u in Ruvisha . Special Director without recording the main contentions of the Appellant and without any cross-appeal, then proceeded to enhance the penalty and imposed a penalty of 1,60,98,308/- against each of the appellants instead of the original imposed penalty of 5 lakhs. Before this Tribunal the Appellants have filed their sworn affidavit stating on oath that appellants have nothing whatsoever to do with the alleged trust and have never opened and maintained any accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Tribunal again on 9.9.2019. The same are clarified. Brief Facts are that 2. The respondent Enforcement Directorate issued a show cause notice against the appellants alleging contravention of Section 3 (a), Section 4 read with Section 39 of FEMA on the allegation that the appellants namely Chandrakant Ishwarlal Gandhi, Dhanlakshmi Chandrakant Gandhi, Rajesh Chandrakant Gandhi and Viraj Chandrakant Gandhi have allegedly benefited and received a total sum of US dollars 4,47,789.08, which was alleged to have been acquired/possessed/held/owned outside India with LGT Bank without any General or Special permission of RBI and thus contravention alleged by invoking presumption under section 39 of FEMA, 99. 3. The reliance for the said allegations in the SCN, Complaint is placed where the denial statements of all the four persons and prosecution complaint along with enclosures filed by Deputy Commissioner of Income Tax before the Magistrate's Court at Kolkata. 4. At page 58 (iii), it was alleged in the complaint that an information had been received from Central Board of Direct Taxes that the appellants are the beneficiaries of "Ruvisha Trust in Liechtenstein‟ and the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in Indian currency and attributed one fourth of the amount to each of the appellants contrary to any evidence and material on record and even contrary to allegations in the SCN. 9. The complainant invoked the clause of presumption as engrafted under section 39 of FEMA as stated by the learned counsel appearing on behalf the respondent. The same are also the pleadings. 10. The admitted case of the complainant is that the documents purported to have been relating to the account are unauthenticated "photocopies" claimed to have been received from Income Tax department. 11. The documents relied (photocopies are placed at page 95 to 97 of the paper book) in a language unknown to the Appellants, unknown to the complainant and unknown to the Adjudicating Authority. In this regard attention is also invited to the order of the Deputy Commissioner placed from pages 98 to 102 of the paper book dated 31/12/2009, wherein at page 99 the Income Tax Adjudicating Authority has noticed that the said documents are "photocopies". 12. The appellants filed their response to the SCN and complaint denying the allegations, which is placed at pages 207 to 213 of the paper book, inter alia, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector affirmed the order of the Adjudication Authority on his self-innovated and imaginary reasoning, neither based on any evidence nor based on any material but based on assumptions and presumptions arrived at by indulging in an intellectual flight of imagination. While arriving at the guilt the Special Director devised his own fresh reasoning, contrary to material on record and without complying with the law of evidence and in derogation of the principles of natural justice un-confronted tried to justify the order by creating an imaginary basis for attributing the name of the trust to the first alphabet of the names of the appellants but in this exercise also he could not find anything to refer to the alphabet "u" in "Ruvisha". 16. The Special Director without recording the main contentions of the Appellant and without any cross-appeal, then proceeded to enhance the penalty and imposed a penalty of ₹ 1,60,98,308/- against each of the appellants instead of the original imposed penalty of ₹ 5 lakhs. 17. Before this Tribunal the Appellants have filed their sworn affidavit stating on oath that appellants have nothing whatsoever to do with the alleged trust and have neve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enticated under FEMA (Authentication of documents) Rules, 2000 which require authentication of the documents received from abroad by way of seal and signature of any person who is authorised by the Diplomatic and Consular Officers (Oaths & Fees), Act, 1998. Similar provision was available under FERA and is also available under Customs Act. 21. The appellant has referred the judgment of Hon‟ble Supreme Court in the case of Collector of Customs v. East Punjab Traders, (1998) 9 SCC 115, at page 119: "5. The single Technical Member, who wrote the minority judgment, however, held the view that it was not essential on the part of the Customs Officer to strictly prove the documents as required by the Evidence Act and that the authenticity of the documents, though copies, could not be doubted as they had been collected by the Collector from foreign sources and could be admitted in evidence by virtue of Section 139(ii) of the Customs Act, 1962 which permits the raising of a presumption in respect of documents received from any place outside India in the course of investigation of any offence alleged to have been committed by any person under the Act. The majority points out that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. In these circumstances, if the majority was disinclined to place reliance on these documents we find it difficult to hold that it was in error in doing so. " 21.1 On same lines the Hon‟ble Delhi High court reiterated the same principle in the case of Jain Engineering V/S Enforcement Directorate, 2014 SCC Online Del 1118. Relevant portion is reproduced below: " Documents collected from abroad not authenticated. 18. It was next submitted that there was no valid evidence to prove the allegations in the SCNs. Although the allegations were based on documents obtained from the exporters in UK and Italy, admittedly no effort was made by the ED to authenticate the said documents under Section 72 FERA. The said provision reads as under: "72. Presumption as to documents in certain cases.-Where any document- (i) is produced or furnished by any person or has been seized from the custody or control of any person, in either case, under this Act or under any other law; or (ii) has been received from any place outside India (duly authenticated by such authority or person and in such manner as may be prescribed) in the course of investigation of any offence under this Act alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the terms set out under the Letter of Rogatory are an admissible piece of evidence." 20. The above observations were factually erroneous and contrary to the record. The AO next proceeded on the basis that the statement recorded under Section 40 FERA and Section 108-CA are judicial proceedings and therefore admissible in evidence. What the AO failed to note that in both statements there is no admission by the Appellants of the fact that the invoices were sent by the importers to them, one reflecting the transaction value and the other true value. As noticed hereinbefore, the statements under Section 40 FERA cannot, therefore, be ipso facto said to constitute evidence of contravention of Section 8(1) FERA by the Appellants. Thirdly, the AO accepted the overseas enquiry report. The overseas report is again an unauthenticated document and could not have been used as substantive evidence for the purpose of adjudication proceedings under FERA unless the requirement of Section 72 FERA was met. In the absence of authentication of the documents obtained from outside India in terms of the Rules prescribed for that purpose it was not open to the Commissioner to straightway rely on the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
