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TMI Blog2023 (7) TMI 1126X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1973 has contemplated civil liability for contravention with the power to adjudicate on the same being vested with the Adjudicating Officer under Section 51. Section 56 of the Act of 1973 has provided that, without prejudice to any award of penalty by the Adjudicating Officer, if a person contravenes any of the provisions of the Act of 1973, other than Section 13, 18 (1) (a), 18 A, 19 (1) (a), 44 (2), 57 and 58 or any rule, direction or order made thereunder, such person upon conviction by a Court, be punishable with the quantum of punishment as has been prescribed. The Act of 1973 has therefore contemplated both civil and criminal liability for contraventions of the provisions of the Act of 1973 to be scenario specific. Some contraventions are purely civil in nature while others entail both civil and criminal liability. Therefore, the Act of 1973 does not contemplate that in respect of a particular case, there must be simultaneous taking of notice of contravention by an Adjudicating Officer and cognizance of the same by the Court. The functions of the two Adjudicating authorities have been prescribed to be disjoint. In such circumstances, it would be appropriate to construe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... askaromoy Dey, Adv. Mr. Vineet Ojha, Adv. For Enforcement Directorate in FEA 5 of 2008 : Mr. Arijit Chakraborti, Adv. Mr. Deepak Sharma, Adv. For the Enforcement Directorate in FEA 22 of 2009 FEA 23 of 2009 : Mr. Vipul Kundolia DEBANGSU BASAK, J. :- 1. Three appeals have been heard together as they involve similar issues. 2. The appellants in the three appeals have been represented by two sets of learned counsel. For the sake of convenience, facts and contentions of the appellants in the three appeals are adumbrated in order of time of the three appeals. 3. FEA No. 5 of 2008 had been filed prior to the other two appeals and for the sake of convenience is hereinafter referred to as the first appeal. The appellants in FEA 22 of 2009 and FEA 23 of 2009 have been represented by a different learned counsel. These two appeals, for the sake of convenience have been referred to as the next sets of appeals. 4. Learned advocate appearing for the appellants in the first appeal has drawn the attention of the Court to the facts of the present case. He has submitted that the memorandum dated March 31, 2002 was issued to the appellants on May 31, 2002. He has r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay) vs. First Global Stockbroking (P) Ltd. 8. Learned advocate appearing for the appellants in the first appeal has contended that, a fiscal statute is required to be strictly considered. In support of such contention he has relied upon 2022 Volume 5 Supreme Court Cases 62 (Krishi Upai Mandi Samiti, New Delhi vs. CCE) and 1991 Volume 4 Supreme Court Cases 467 (Commissioner of Income Tax, Gujrat vs. Cellulose Production of India Ltd.). 9. Learned advocate appearing for the appellants in the first appeal has contended that, Reserve Bank of India did not initiate any proceedings with regard to the so-called violation of the terms of the license. In fact, Reserve Bank of India had renewed the license. Therefore, there was no valid ground for the authorities to initiate the proceedings under FERA. He has contended that the impugned action of the authority suffers from non-application of mind. 10. Learned advocate appearing for the department in the first appeal has contended that the memorandum is dated May 31, 2002. Since the Foreign Exchange Management Act, 1999 (FEMA) had come into effect from June 1, 2002 therefore, actions taken as on May 31, 2002 with regard to FER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RBI contained in the memorandum of instruction and no foreign currency was sold in violation of any instruction of RBI. Therefore, there was no factual basis for the department to proceed as against the noticee. 13. Learned advocate appearing for the appellants in the next set of appeals has relied upon 2007 Volume 8 Supreme Court Cases 89 (Commissioner of C. Ex., Nagpur vs. Ballarpur Industries Ltd.) and 2007 Volume 5 Supreme Court Cases 388 (Commissioner of C. Ex., Bangalore vs. Brindavan Beverages (P) Ltd.) and contended that, the finding arrived by the Adjudicating Authority was beyond the scope of the show cause notice dated March 31, 2002. 14. Relying upon 2014 Volume 5 Supreme Court Cases 162 (Tulip Star Hotels Ltd. Vs. Special Director of Enforcement) learned advocate appearing for the appellants in the next set of appeals has contended that, since the noticee sold the foreign currencies after following the instructions of the RBI, the noticees cannot be made responsible for the intended purpose of the purchaser or the misuse of such funds by the purchasers. 15. Learned advocate appearing for the Department in the next set of appeals has adopted the content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (1) of section 52 of the said Act (hereinafter referred to as the repealed Act) shall stand dissolved. (2) On the dissolution of the said Appellate Board, the person appointed as Chairman of the Appellate Board and every other person appointed as Member and holding office as such immediately before such date shall vacate their respective offices and no such Chairman or other person shall be entitled to claim any compensation for the premature termination of the term of his office or of any contract of service. (3) Notwithstanding anything contained in any other law for the time being in force, no court shall take cognizance of an offence under the repealed Act and no adjudicating officer shall take notice of any contravention under section 51 of the repealed Act after the expiry of a period of two years from the date of the commencement of this Act. (4) Subject to the provisions of sub-section (3) all offences committed under the repealed Act shall continue to be governed by the provisions of the repealed Act as if that Act had not been repealed. (5) Notwithstanding such repeal, (a) anything done or any action taken or purported to have been done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 973 on May 31, 2002. The appellants in the first appeal have contended that, the department has to establish that the memorandum dated May 31, 2002 was placed out of the control of the Department on such date, for the department and the adjudication proceedings to be saved by the provisions of Section 49(3) of the Act of 1973. 22. Rajesh Kumar Jain (supra) has answered the points referred to a larger bench for consideration. It has inter alia, construed the true meaning and purport of the expression given as used in Section 110 (2) and Section 124 of the Customs Act and whether the expression given means sending or being received . The reference had centered around construction of Sections 110 (2), 124 and 153 of the Customs Act. 23. Shri Kanti Tarafdar (supra) has construed the provisions of Section 110, 124, and 153 of the Customs Act. It has held that, service of a notice as contemplated under such provisions of the Customs Act, will be complete either by tendering or by sending the same by registered post, since the Legislature has equated both the situations by using the word or . 24. The ratio of the two authorities noted above, is not attracted to the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e memorandum has details of the contraventions of the provisions of the Act of 1973 alleged as against the appellants. Section 49 (3) requires the adjudicating officer to take notice of any contravention under Section 51 of the Act of 1973 within May 31, 2002. In the facts and circumstances of the three appeals, the adjudicating officer had taken notice of contraventions under Section 51 of the Act of 1973 on May 31, 2002. Therefore, the adjudicating officer had taken notice of the contraventions within the time period specified by Section 49 (3) of the Act of 1999. 29. Section 49 (3) of the Act of 1973 does not require the Adjudicating Officer to complete the service of a notice on the noticee. What it requires is that, the adjudicating officer must take notice of the contraventions of Section 51 of the Act of 1973 within the time period specified. The department needs to establish that, the Adjudicating Officer took notice of the contraventions under Section 51 of the Act of 1973 within the time period prescribed. 30. In the facts and circumstances of the present case, the memorandum is dated May 31, 2002 which has recorded the fact that the Adjudicating Officer took notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been transferred to the Appellate Tribunal constituted under the Act of 1999. It has also provided for filing of appeal before the High Court under the Act of 1973 within the timeframe prescribed therein. 34. On a conjoint reading of the provisions of Section 49 of the Act of 1999 it can be safely said that, a violator of the provisions of the Act of 1973 would not be having a prosecution holiday or a discharge from a prosecution by reason of the repeal of the Act of 1973 and the coming into effect of the Act of 1999. 35. Krishi Upai Mandi Samiti (supra) and Cellulose Products of India Ltd (supra) have advocated that where the language is plain and unambiguous strict construction of a taxing statute is the mandate. Liberal construction to effectuate the object of the provision may be resorted to, only in case of genuine doubt or possibility of forming two alternative options. 36. It has been contended that, Section 49 (3) of the Act of 1999 requires fulfilment of both the conditions prescribed therein namely Court Taking cognizance of an offence under the Act of 1973 and the Adjudicating Officer taking notice of the contraventions under Section 51 of the Act of 1973, withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies who gave certain names or sponsored persons for purchase of foreign currency projecting their impending foreign business tour but all such persons were not traceable. These persons had been sponsored repeatedly within a short period of time. 41. Similar is the case in the next two appeals where Manas Kumar Maitra along with 4 others had been involved in creating fake firms/companies for sponsoring persons for alleged business travel within a short period of time. 42. In both the set of cases, both at the level of the Adjudicating Officer as also at the level of the Appellant Authority, there is a concurrent finding that, the appellants had acted without due care and in violation of the guidelines of the Reserve Bank of India in selling foreign currency to those persons. It has been concurrently held that, the appellants had failed to discharge their duty of reasonable care in selling foreign currencies to those persons involved when such currencies were sought for within such a short period of time with same dates of travel. 43. In all the three appeals, there have been on current finding on facts. The adjudicating officer in all the proceedings had found violations ..... X X X X Extracts X X X X X X X X Extracts X X X X
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