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TMI Blog2009 (4) TMI 1042X X X X Extracts X X X X X X X X Extracts X X X X ..... for purchasing US $ 67,951 and selling US $ 45,000 illegally for which penalties of ₹ 3,00,000/- on Respondent Amarjeet Singh and ₹ 2,00,000/- on Respondent Pritpal Singh were imposed. US $ 12951/- and US $ 10,000/- respectively seized and recovered from Amarjeet Singh and Pritpal Singh, were ordered to be confiscated. Indian currency of ₹ 87,600/- was, however, not found to be involved in the contravention of Sections 8 (1) and 8 (2) and was directed to be adjusted against the amount of penalty imposed on Amarjeet Singh if it was not paid by him within the stipulated time. Objection as to maintainability 3. The first issue that arises for consideration is the maintainability of the appeals. Mr. Naveen Malhotra, the learned counsel, appearing for the respondents raised a preliminary objection as to the maintainability of these appeals when they were heard on 23rd January 2009. He pointed out that in Mohtesham Mohd. Ismail v. Special Director, Enforcement Directorate 2007(11) SCALE 741, it had been held by the Supreme Court that the Enforcement Directorate could not have filed an appeal before the Tribunal against the order of the Adjudicating Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de. Ismail then appealed to the Supreme Court. 6. Before the Supreme Court, the Special Director placed reliance upon the notification dated 22nd September 1989 by which the Special Director of Enforcement was appointed by the Central Government under Section 4(1) read with 3(e) FERA. Further under the said notification, the Central Government conferred upon the Special Director the power under Section 51 FERA to adjudicate cases of contravention of the provisions thereof. It was accordingly submitted that the Special Director as a delegatee of the Central Government, could have filed the appeal before the High Court. However, the Supreme Court found that First Respondent did not file the appeal on behalf of or representing the Central Government. It was filed in its official capacity as the adjudicating authority and not as a delegate of the Central Government. It was accordingly held that the appeal in the said case could not have been filed by the Special Director, Enforcement Directorate. 7. It is pointed out in the written submissions of the appellant that there is a distinction in the wording of Section 54 of FERA 1973 and Section 35 of FEMA 1999. While Section 54 FER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi. On the basis of the said information a team of officers was deputed for taking search under Section 37 FERA 1973. It is alleged that both residents did not cooperate in the search and in fact attacked the officers and threatened them with a saw and a sword. However, they were overpowered by the officers and personal search was undertaken on both persons under Section 34 FERA. The searches resulted in the recovery and seizure of the following currencies: (i) US$ 10,000/- from Pritpal Singh @ Gogi. (ii) US$ 3,000/- and Indian currency of ₹ 10,000/- from Shri Amarjeet Singh @ Billa. (iii) US$ 9,951/- and Indian currency of ₹ 87,600/-, one pay order of United Western Bank Ltd. Karol Bagh, New Delhi in the sum of ₹ 5 lakhs and certain documents from the briefcase in the hands of the Amarjeet Singh @ Billa. 11. It is alleged that some of the officers received injuries due to the assault on them by the two respondents. When Pritpal Singh made an attempt to flee after the recoveries had been made, a scuffle ensued wherein he received injuries. An FIR No. 574 of 1993 was registered against both the respondents. 12. It is stated that both Amarjeet Singh @ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marjeet Singh was an exporter who was authorized to receive payments in foreign exchange from foreign buyers to take export orders as mentioned in the Foreign Exchange Manual. It was contended that the seized foreign currency was the proceeds received from foreign buyers from 8th December 1993. Since the relevant documents exchanged in this case thereto were already with the Enforcement Directorate, they were not being placed along with the reply. The respondents stated that they would like to cross-examine all the witnesses and also produce defence witnesses. 16. The Deputy Director, Enforcement passed an order on 25th February 2000 holding the respondents guilty of the contravention of Section 8(1) and 8(2) FERA 1973. It is seen from the said order that the case had been fixed on 17th January 2000 when the advocate for the noticees had stated that he would give specific lists for the purpose of cross-examination at the earliest. On the next date, i.e., 25th February 2000 no such list was given and instead written submissions were filed pointing out that the right to cross-examine the witnesses of the Enforcement Directorate had been declined to them by the Adjudicating Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate, Madras v. NPV Ramasamy Udayar 1997 Cri LJ 412, Prem Singh Chawla v. Directorate of Enforcement 1987 Cri LJ 1579, Ram Krishna Bedu Rane v. State of Maharashtra (1973) 1 SCC 366, Collector of Customs, Madras v. D. Bhoormul (1974) 3 SCR 833, Kanungo Co. v. Collector of Customs (1973) 2 SCC 438 and Kollatra Abbas Haji v. Govt. of India 1984 (15) ELT 129 (Ker). 20. As far as the above submission is concerned, a perusal of the impugned order of the Tribunal shows that the explanation offered by the respondents was found by the Tribunal to be sufficient and trustworthy. The material produced by the respondents is adverted to in para 24 of the order of the Tribunal which requires to be set out in full as under: 24. The appellants have furnished a copy of the form No.CNX dated 12.2.93 for allotment of code number to them by the RBI as an exporter to their firm, namely, Blaze Exports. On 5.3.93, the RBI had allotted code No. DB 002983 to Blaze Exports. The appellants have further submitted copies of their contract No.B/E/93 dated 7.12.93 with M/s Andrej Kurowski Warsaw, Poland for 1280 woollen pullovers @ 7.80 US dollar for the total value of 9,984 US dollar. The appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uded a new trade and payments agreement in terms of which all transactions of commercial and noncommercial nature will be settled in free foreign exchange with effect from 1st January, 1991. Exporters are, therefore, advised that they should ensure that payments in respect of contracts for export of goods from India to Poland entered into on or after 1st January, 1991 are received by them in one of the permitted currencies such as US Dollar, Poland Sterling etc. For contracts entered into prior to 31st December, 1990, payments will continue to be received in non-convertible Indian rupees, as heitherto (sic hitherto). Notice to Exporters No.2 of 1992 As a sequel to formation of independent States in the erstwhile USSR, the Government of India and Government of Kazakhastan, Kyrghystan and Ukraine have recently concluded new trade agreements in terms of which all transactions of commercial and noncommercial nature with these countries will be settled in free foreign exchange with effect from 22.2.92, 18.3.92 and 27.3.92 respectively. Exporters are, therefore, advised that they should ensure that payments in respect of contracts for export of goods from India to these countries e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forcement are rebuttable. Once the respondents have been able to rebut the presumption, the burden shifted to the Enforcement Directorate to show that the defence was not plausible or credible. 24. In this context, having examined the order of the Adjudicating Authority, this Court is of the view that the manner of dealing with the affidavits filed by the buyers themselves is not satisfactory. It is based on conjectures. The deponents of the affidavits were not sought to be crossexamined by the Directorate of Enforcement. The Appellate Tribunal has rightly observed that once those affidavits were filed it was for the Directorate of Enforcement to rebut the same which it had not done. As regards the alleged sales of US$ 45,000/- to Afghans, the Tribunal found that the Adjudicating Officer had not dealt with the issue. The above conclusions of the Tribunal are consistent with the law explained by the Supreme Court in Ram Krishna Bedu Rane v. State of Maharashtra (supra), D.Bhoormul (supra) and M/s. Kanungo Co. (supra). 25. It was then contended that the respondents had themselves made voluntary statements to the officers which were not hit by Sections 25 of the Ev ..... 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