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FEMA - Case Laws
Showing 141 to 160 of 854 Records
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2019 (6) TMI 1027 - ATFEMA
Offence under FEMA - unauthorized dealing of foreign exchange - recovery of US $ 3,30,400 at Aizwal Airport on 27.10.2006 from a person by name Shri Thlabik and subsequent recording of statement of Shri Thlabik, who had taken the name of the appellant in his statement - HELD THAT:- From the record, it is evident that there is no clear and cogent evidence against the appellant that he had been dealing in illegal foreign exchange trade or if he had dealt with foreign exchange without the permission of the RBI. No doubt, there are allegation against him that he had received a sum of ₹ 35,00,000/- (Rupee Thirty five lakhs only) from Shri Thlabik (the amount recovered at the time of search of the premises). His case is that it was the money representing the payment was owned by two purchasers of Jewellery at Mizoram. It is not in dispute that the department has allowed him to cross examination of main witness (accused) Shri Thlabik, however, the said witness was not produced for the said purpose. When verified, it was informed that he was absconding, therefore, could not be produced for cross-examination.
In the present case, the main accused as per respondent is Thlabik who is absconding. It was the duty of the respondent to trace him out. Despite of prayer of the appellant for cross-examination allowed, the witness was not produced for cross examination. Thus, merely on the basis of presumption, the inference can be drawn against the appellant without clinching evidence.
The benefit of doubt under these circumstances goes in his favour. The submission of the respondent does not help the case in view of peculiar facts and circumstances of the matter.
In the light of the above, the appeal is allowed. The impugned order against the appellant is set aside.
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2019 (6) TMI 964 - MADRAS HIGH COURT
Stay of demand - waiver of pre-deposit - Tribunal dismissing the appeals for non-prosecution - HELD THAT:- The appeals filed before the Tribunal could not have been dismissed for non-prosecution. Yet, we may point out that the conduct of the appellants in not appearing for several hearings also cannot be appreciated. We have to necessarily interfere with the common order passed by the Tribunal dated 14-9-2018, which was communicated to the appellants on 25-9-2018.
So far as the conditional order passed by the Tribunal is concerned, considering the financial position pleaded by the appellants and their case that they are unable to realize export production in spite of their diligent efforts, we are of the considered view that the appellants have made out a prima facie case. However, this observation is made only for the purpose of imposing a condition on the appellants, so that the appeals before the Tribunal can be heard and disposed of on merits.
Accordingly, CMA disposed of by slightly modifying the common order passed by the Tribunal by directing the appellants to deposit with the first respondent namely the Special Director, Enforcement Directorate, Government of India, 50% each of the penalty amounts imposed individually and furnish a bond for the balance 50% each and keep the bond alive till the appeals are heard and disposed of on merits by the Tribunal. No costs. Consequently, the connected CMPs are closed.
The common order passed by the Tribunal dismissing the appeals for non-prosecution are set aside and the appeals are restored to the file of the Tribunal. The appellants are granted eight weeks’ time from the date of receipt of a copy of this judgment to deposit 50% each as directed above. Subject to the deposit of 50% each by the appellants within the time prescribed, the Tribunal shall fix a date for hearing of the appeals and pass orders on merits
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2019 (6) TMI 863 - ATFEMA
Violation of FERA - penalty imposed against dead person - both alleged accused and abettor have already expired long ago - HELD THAT:- Rendering the order against Sh. Bharat Hansraj Thakkar without any valid findings pertaining to penalties is not sustainable in law. As far as Hansraj Thakkar is concerned, the penalty was imposed against the dead party despite of having the knowledge about his death.
Appeal is allowed in the case of Sh. Bharat Hansraj Thakkar of a penalty of ₹ 5.00 crores and the impugned order against him is quashed as there is no reasoning in the Adjudication Order.
The show cause notice seeks to hold the Sh. Bharat Hansraj Thakkar liable on account of “abetment” in terms of Section 64 of FERA, sine repealed. Once the order passed against Sh. Hansraj Thakkar, the main offender, is a nullity, being passed against a dead person “abettor” cannot be held guilty in the absence of guilt adjudged against main offender. The matter is 32 years old. Both alleged accused and abettor have already expired long ago. Against the accused, when the order was passed he was no more and against abettor there are no discussion and reasons for imposing the penalties.
The order of penalty or conviction passed against a dead person leads to acquittal of deceased person with consequence of acquittal as presumption of innocence continues till finding of guilt on account of death of main offender, the proceedings get “abated” and “abettor” cannot be thus held guilty. The order against Sh. Bharat Hansraj Thakkar is liable to also be set aside on this ground also.
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2019 (6) TMI 637 - BOMBAY HIGH COURT
Maintainability of petition - Petitioner's alternate and efficacious remedy against the impugned order made by the Enforcement Directorate, to the Appellate Tribunal for Foreign Exchange, Ministry of Law, Justice and Company Affairs, Government of India - violation of principles of natural justice as certain statements made by some buyers and these statements have been acted upon without afford of any opportunity or cross examination to the Petitioners - HELD THAT:- In the present case, after the show cause notice dated 6th September, 2017 was served upon the Petitioners, the Petitioners chose to file reply through their Chartered Accountant. Neither in the reply nor at any stage of the proceedings before the impugned order came to be made, the Petitioners objected to taking into consideration the statements of the buyers on the ground that the same were not tested in the cross examination. There was no request made for examination of such buyers in the presence of the Petitioners or their legal representatives and thereafter for opportunity to cross examination of such buyers
In any case, all the contentions including the contention with regard to the alleged breach of principles of natural justice can always be raised before the Appellate Authority. Accordingly, we uphold the preliminary objection raised and dismiss the present petition. However, we leave it open to the Petitioners to avail alternate remedy available under the statute.
None of the observations in this order should be used to foreclose any contentions which any of the parties may have, in case the Petitioners, choose to avail of an alternate remedy available under the statute.
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2019 (6) TMI 636 - ATFEMA
Non-realization/short of foreign exchange received - Failure to realize export proceeds on exported goods - FEMA v/s FERA proceedings - contravention of provisions of section 7 & 8 of FEMA, 1999 read with regulation Nos. 8,9 & 13 of Foreign Exchange Management (Export o Goods and Services) Regulations, 2002 - Penalty imposed - HELD THAT:- Foreign Exchange Management Act, 1999 (‘FEMA’) was brought in to keep pace with the changing dynamics of the Indian economic polity repealed the Foreign Exchange Regulation Act, 1973 (‘FERA’) and came into force on 1-6-2000. Apart from removing criminal prosecution for non-compliance of foreign exchange norms, FEMA also introduced a sunset clause for taking notice of contraventions under FEMA.
FEMA provides that no adjudicating authority shall take notice of any contravention under FERA two years after the coming into force of FEMA. In other words, it provided a window up to 31-05-2002 for the authorities under FEMA to take notice of contraventions under FERA.
The export of goods had been made on 29h May, 2000 under GR No. 366158. The subject export was governed by the Foreign Exchange Regulation Act, 1973 and no proceedings under section 8 of the FEMA 1999 which came into force on 1st June 2000 could be applicable for the GR No. 366158 dated 29.05.2000.
In BHUPENDRA V. SHAH VERSUS UNION OF INDIA & ORS. [2010 (3) TMI 20 - DELHI HIGH COURT] held show cause notice (SCN) issued after the sunset clause period of 31-05-2002 for alleged contravention of Section 7 & 8 of FEMA by an exporter in not realizing proceeds of export made in 1997- 98(pertaining to the FERA period.
In order to invoke section 7 of FEMA, the ED will have to show that the party reached the time limits specified in FEM EGS Regulations.
At the relevant point of time, FEMA was not a force and hence there could be no question of contravening the provisions of FEMA and if at all there was any contravention, it would only under FERA and the same had to be shown to have continued beyond the two year sunset period - the legislative intent was very clear in having a limited continuation of two years for contraventions under FERA - on reading of Section 49(4) [which is subject of section 49 (3)] the contravention under FERA had to be governed by the Provisions of FERA. Therefore the alleged contravention was one under FERA and by virtue of the sunset clause so there was no question of the contravention continuing after 31-5-2000.
Decision under FERA but still valid under FEMA- In LIC VS Escorts Ltd.[1985 (12) TMI 289 - SUPREME COURT] wherein it has been held that RBI is empowered to grant ex-post permission under Section 18(2). Thus, mere non-realisation of export proceeds will not amount to contravention of Section 18(2) of FERA, unless RBI refused permission to write off the receivables or to extend the period.
It is rightly submitted on behalf of appellants that according to the decision of Hon’ble Apex Court LIFE INSURANCE CORPN. OF INDIA VERSUS ESCORTS LTD. [1985 (12) TMI 289 - SUPREME COURT] initiation of enquiry against the noticee company by the Directorate of Enforcement for same and identical matter pending before their banker for last 8 years is a long delay. No doubt, there is no prescribed period stipulated but at the same time, it is settled law that if the party has a reasonable case on merit, the issue of delay cannot be considered while deciding the matter.
In the light of above and for the reasons stated, the appeals are allowed by setting–aside the impugned order. All appeals and pending application are disposed of.
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2019 (6) TMI 418 - ATFEMA
Review petition - HELD THAT:- There is no provision in law to file review petitions again and again and again against review orders. Review petitions can be filed against an order only for errors apparent on the face of it. This is not the case here. The review order dated 24.06.2015 has attained finality in as much as it has not been challenged in any High Court by these appellants.
The review order dated 24.06.2015 is a speaking order which also has reflected as to how the appellants have tried to mislead the Bench. As discussed in the brief facts, the sequence of this case only points towards the appellants trying to take the Bench for granted and make a mockery of the entire system. I cannot allow such travesty of justice.
The review application alongwith the condonation of delay for which no cogent reason has been given, is therefore dismissed as rejected.
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2019 (5) TMI 1574 - DELHI HIGH COURT
Release of property seized - Proceedings instituted pursuant to a complaint u/s 16(3) of the Foreign Exchange Management Act, 1999 (FEMA) - as alleged show cause notice issued by the concerned officer alleging contravention of the provisions of Section 3(b) of FEMA, read with Regulation 5(2)(c) of the Foreign Exchange Management (Manner of Receipt and Payment) Regulation, 2000 - HELD THAT:- Insofar as Indian currency is concerned, the same was transferred to the Income Tax Authority.
Silver and silver articles, which were seized by the respondent. The petitioner claims that he has submitted all the requisite details as called upon to do so by respondent no.2, and has repeatedly requested the respondent to release the said goods. However, the petitioner’s request has not been acceded to, as yet. He submits that the show cause notice issued on 03.01.2018 and the proceedings are illegal and the goods seized do no fall within the scope of FEMA.
As stated that the petitioner had replied to the show cause notice on 25.01.2018; however, no further proceedings have taken place, thereafter. In view of the above, this Court is not inclined to entertain the present petition at this stage, as the show cause notice issued to the petitioner is yet to be adjudicated. The pending application is also disposed of.
Given the facts of the present case, this Court directs the Adjudicating Authority to take a final decision as expeditiously as possible, and in any event within a period of six weeks from today after affording the petitioner a reasonable opportunity of hearing.
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2019 (5) TMI 1573 - ATFEMA
Stay petition - whether the appellants have been able to make out a prima facie case in their favour? - claim taken up with RBI for compounding - received inward foreign remittances from M/s. Infinity Financial Limited, Mauritius but failed to either intimate the Reserve Bank of India within 30 days of the inward remittance, or failed to issue shares to the foreign investors within the stipulated 180 days of the inward remittances - HELD THAT:- In this case, the appellants have not denied that they did not inform the RBI within the stipulated period as mandated by RBI, nor did they issue shares to the foreign investor within 180 days as again mandated by the RBI. Instead the money was diverted to buy properties and land in their name which was not the purpose of the inward remittance. In fact, in the stay petition the appellant at para 5 have accepted their liability which was not discharged. Their claim that they had taken up with RBI for compounding also does not strengthen their argument in as much as the RBI had returned their compounding application vide their letter dated 22.08.2012 but the appellants never considered filing an appeal or representation against the said letter of RBI. They, therefore, way back in 2012 had accepted the non-compounding by the RBI.
They have pleaded financial hardship but have not submitted any document in support of the same.
Thus find that the appellants have been able to make a prima facie case in their favour and hence the stay petition is rejected. Since their financial hardship plea is not backed by any documentary evidence, the same cannot be accepted. However, feel that the interests of justice would be served if the appellants are directed to predeposit 50% of the penalty levied within a period of two months from today.
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2019 (5) TMI 1467 - DELHI HIGH COURT
Monetary limit for prosecution of FERA issues - Petitioner on trial for the offences under Section 18(2) r/w Section 18(3) of Foreign Exchange Regulation Act, 1973 and under Section 56 of Foreign Exchange Regulation Act, 1973 - Quashing of revisional court’s order - pleas urged in this petition are that in view of the Circular of 5th July, 2001 issued under Section 56 of FERA, there can be no prosecution if the amount involved is less than ₹2 crores - HELD THAT:- Since evidence of three witnesses out of six, has been already recorded and the case is now fixed in this month before the trial court for recording of the remaining evidence, therefore, the legality of the impugned order is not required to be tested, as the trial of the case has fairly progressed and existence of Circular of 5th July, 2001 is yet to be established. Moreover, the submissions advanced on behalf of petitioner are required to be considered, after the evidence is led in this case.
Accordingly, this petition and the application are disposed of with liberty to petitioner to urge the pleas taken herein before the trial court at the stage of final arguments. It is made clear that this Court has not expressed any opinion on the merits of the case, lest it may prejudice either side before trial court.
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2019 (5) TMI 1466 - ATFEMA
Status of BCCI as a ‘company’ - Adjudication proceedings against BCCI - Transactions done in violations of the provisions of FEMA 1999 - illegal funds were transferred between BCCI and CSA - HELD THAT:- BCCI was neither a Body Corporate nor a firm nor an association of individuals, but only an Association of Associations, registered as a society under the Tamil Nadu Societies Registration Act and therefore, BCCI could not be qualified to be treated as’ company’ as per the explanation for a company provided under section 42 of FEMA 1999.
BCCI is not a company as admitted by all parties, but only an Association registered as a Society. Prima facie, there is force in the submission of learned counsel appearing on behalf of appellant nos. 2 to 11 and it appears that at this stage, being an important legal issue, the same is left for argument at the final hearing of appeals.
BCCI is included as a person within the meaning of Section-42 of the Act and if contravention provisions of the Act. At the best, at present BCCI may be asked to pre-deposit the penalties on their behalf at this stage without prejudice till the said important legal issue is finally decided.
Whether the funds transferred by BCCI to the CSA account was in the nature of Capital Accounts Transaction or Current Account ? - HELD THAT:- It is not the case of the respondent or of the “Adjudicating Authority” that any of the remittances or transactions made by BCCI to CSA were prohibited or restricted by “The Foreign Exchange Management (Current Account Transactions) Rules 2000”. As urgued on behalf of appellants that none of the remittances were prohibited by the above said rules and the remittances made by BCCI to CSA were permissible current account transactions. Counsel for respondent does not dispute that if the transactions fall under current account, the permission of RBI is not necessary. This issue at this stage cannot be finally concluded at this interim stage, however, prima facie, find force in argument of the appellant.
Prima facie, at this stage the penalties imposed by the Adjudication Authorities, they are dispensed with to deposit the same with the respondent in the light of important issue to be argued at the final hearing of the appeals.
As submitted by all the appellants that the remittances made by BCCI to CSA were not “Capital Account Transaction”, but, “Current Account Transaction”. The erroneous reasonings are given in the impugned order while coming to the conclusion that the remittances made by the BCCI to CSA were “Capital Account Transactions” wherein the “Adjudicating Authority” holds that the remittances made by the BCCI to CSA were contingent liability.
In para 17.13 of the impugned order concludes that BCCI by making remittances to the CSA had created a contingent liability and therefore the transactions were not “Current Account Transactions” prima facie but “Capital Account Transactions”. Thus, the finding of the Adjudicating Authority prima facie cannot be accepted at this stage as holding of the IPL – 2 was a certain event, as per the agreement dated 30/03/2009 the arrangement between BCCI and CSA was cost plus fees arrangement.
It is true that the respondent has made many allegations of malpractices. But the cases are not decided on the basis of allegation. In the final order, the matters are to be decided on the basis of fact, evidence and legal issues on record. The assumption, presumption and perception have no place in the statute, particularly, when the statute is a Special Act. Without expressing any final conclusion on the issues raised by the appellants, as mentioned above and without prejudice, this Tribunal is of the view that the stay applications filed by the appellants are disposed of with the following directions:-
i) Without prejudice, BCCI is directed to deposit ₹ 10 crores against total penalty amount imposed with the respondent by way of Bank Guarantee on its behalf as well as on behalf of appellant nos. 2 to 9 within four weeks from today.
ii) As far as appellant nos. 2 to 9 are concerned, the issue of individual penalty imposed by the Adjudicating Authority will be considered at the time of final hearing of appeal. The prayer made by appellant nos. 10 and 11 of their interim applications is allowed without any condition in view of the grounds made in their appeals.
iii) The BG shall be furnished to the satisfaction of respondent initially for a period of six months as this Tribunal is hopeful that all the appeals will be decided by the said time, otherwise the same shall be renewed for a further period of six months after the expiry date.
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2019 (5) TMI 818 - PUNJAB AND HARYANA HIGH COURT
Maintainability of appeal - alternative statutory remedy - Penalty for contravention of Section 7 (1)(a) of the FEM 1999 read with Regulation 16(1) (i) & (iii) of Foreign Exchange Management (Exports of Goods and Services) Regulations, 2000 - HELD THAT:- An appeal against the order impugned herein is maintainable before the Special Director (Appeals), O/o the Commissioner of Income Tax (Appeals), Aayakar Bhawan, Delhi.
In view of the above, we are not inclined to entertain the present writ petition and dispose of the same by relegating the petitioner to avail alternative statutory remedy in accordance with law.
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2019 (5) TMI 817 - ATFEMA
Foreign Direct Investments (FDI) - Non-compliance of the condition of minimum capitalization - requirement of prior permission and allowing automatic route for FDI by foreign companies in township development - Guilty of the charge in respect of the transaction of transfer of shares - liability of director - guilty of the provisions of Reg. 3 & Reg. 5(1) r/w Schedule 1 of FEMA 20/2000 - Restriction on issue or transfer of security by a person resident outside India - HELD THAT:- The minimum amount of FDI is required to be brought in “within a period of six months of commencement of business of the company”. It is evident from the Complaint that the respondent had initiated investigation against the appellant company soon after the first installment of USD 2.5 Million, thereby frustrating further compliance with the condition of minimum capitalization by their own action.
The amount of USD 10 Million is required to be brought in within six months from the commencement of the business of the company. Since the business of development and construction of township could not be commenced due to the action of the respondent, the period of compliance with the condition had yet to commence. The allegation is, therefore, premature and, therefore, the question of contravention does not arise.
In the light of above, we are of the considered opinion that the Adjudicating Authority has misapplied the condition of Sl. no. 23 in respect of FDI in township development to NRIs contrary to FDI in township development under Sl. no. 2 of Annexure B which is without any condition whatsoever.
The impugned order is quashed and set-aside as the appellant no.1 is not guilty of alleged contravention.
The penalty imposed was not called for.
As regards Ashok Jain is concerned, he has been held guilty by fastening vicarious liability on him. There is no specifically averment of incriminating acts of commission or omission in his part, as the impugned order holding the company is not guilty of contravention. The order against Ashok Jain is also set-aside, even otherwise he is not liable to be punished for contravention as he has carried out the transaction with due diligence and complied with every formality including the post transaction reporting condition prescribed by RBI. There is no evidence of any disregard or neglect in observing and complying with the provisions of the law. Therefore, the impugned order is set-aside against the appellant no. 2. The appeal filed by the respondent has become infructuous in view of appeals filed by the private parties are allowed on the reasons already given. Hence, the same is dismissed.
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2019 (5) TMI 478 - ATFEMA
Contravention of Section 3(a) and (b) of FEMA, 1999, contravention of Section 6(3)(g) of FEMA, 1999 and Section 10(6) of FEMA, 1999 - HELD THAT:- There is no statement or document or admission on record to substantiate the said allegations. In this regard, no investigation was done by the department in India or abroad. No show cause notice has been issued for alleged under valuation by the customs authorities and there is no dispute on this aspect. If department wished to prove the aforesaid allegations. As per department they had all information in this regard, which fact is apparent from the impugned complaint however department did not do anything in this regard, who only interpreted the cash book entries and come to the conclusion that these entries were factual and held against the Appellants, without any corroborative evidence available on record.
Pertaining to violation of Section 10(6) of FEMA, the basis of the said allegation is that the Appellant firm had made remittance to its foreign suppliers towards import advance payment of ₹ 3.44 crores through proper banking channel but have made actual import of ₹ 2.49 crores and excess payment of ₹ 95 lacs was made to square off alleged differential value arising on account of alleged under valuation of the imported goods. In this regard the Respondent held that there was no doubt that “advance remittances” for imports are permissible under law, however the Respondent held against the Appellants on this count only on the ground that there was no co-relation between the said advance remittances and imports although Appellants produced different details to establish the said co-relation, accordingly it was held that Appellants were guilty of contravention of section 10(6) of FEMA 1999.
The Respondent did agree that advance remittance is permissible in law against imports. Appellant had produced different evidence / details to establish the co-relation between the advance remittance and imports, however the Respondent was not convinced and only on that ground held Appellants guilty of violation of Section 10(6) of FEMA, 1999.
One is failed to understand why a person would make alleged hawala transactions through banking channel. The business of Appellant firm was on-going business and Appellant had and continued to import electronic components from various suppliers. It is alleged on behalf of the Appellant that they had imported the goods against the aforesaid advance payments so made over period of time. In this regard, along with typed written submissions filed during arguments, Appellant had placed on record chart showing the co-relation between the advance remittances of ₹ 95 lacs, therefore the allegation in regard to alleged undervaluation have been made herein above and the same are reiterated.
The provisions of Section 39 of FEMA, 1999 are not applicable to the fact of the present case and the respondent was merely presuming the cash book as documents for the purpose of investigation under FEMA, 1999. The said cash book was not seized from the custody / control of the Appellants, the same was not seized from the personal computers of either of the partners. The alleged cash books were denied and it was stated that neither of the partners were aware of the contents of the same and that the said alleged cash book was maintained by Shri Pankaj/Shri Dinesh. No statement of either of them was ever recorded by the department. Thus, in the absence thereof, said cash book cannot be held to be substantive evidence to establish alleged violation by the Appellants. Even in a strong matter against the accused parties, it is still the duty of the department to prove the case beyond any doubt for each charge by discharging the burden.
It is the admitted position that the department chose not to record statement of Shri Pankaj or Shri Dinesh Gaud. The department has also not called upon the Appellants to produce Shri Pankaj and/or Shri Dinesh. It is submitted on behalf of the appellant that the failure of the department to summon there who were authors of the alleged entries made in the cash book.
Entire basis of the case of the department is that the Appellants had made alleged violations in order to square off the alleged difference in value of the imported goods / components viz. under valuing the same and paying the alleged difference in value to its overseas supplier through non-banking channels. There no evidence on record to substantiate the said allegations. There is no statement or document or admission on record to substantiate the said allegations. No independent investigation was done by the department in India or abroad. No show cause notice has been issued in this regard viz. for under valuation by the Customs Authorities.
The department at least should have recorded statement of Shri Pankaj and Dinesh Goud to this effect from the sellers of the Appellant or other persons in India or abroad who were allegedly paid money being alleged differential value on behalf of overseas suppliers of Appellant. The Respondent only read and interpreted the cash book entries and it was the violation of various provisions against the appellant without there being any corroborative evidence available on record. Either said witnesses would have been summoned after obtaining the address or the appellants should have been directed to produce them. There is no evidence on record to show that any exercise is done.
Adjudicating Authority erred holding that the Appellants should have produced Shri Pankaj/Shri Dinesh for recording their statement rather than finding fault with the department for not interrogating that the said two persons.
As stated above Shri Pankaj and Shri Dinesh had left the firm during investigation by DGCEI and it is not the case of department that Appellants had any role in that regard, rather Shri Pankaj was the person who got the case registered against the Appellants as alleged and it was duty of department to prove its case. Department has therefore was unable to discharge the said onus. In the light of above, the appeals are allowed and the impugned order is set aside. All the appeals are disposed of.
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2019 (5) TMI 477 - ATFEMA
Stay petition - Offence under FEMA - amount imposed towards penalty against the appellants - HELD THAT:- The appellant has no case on merit, however, it is admitted by the counsel for the respondent that in para-9 of the impugned order, the findings are beyond the charge made in the show cause notice.
A perusal of para 9 of impugned order under heading ORDER shows that the penalties on the appellants have been imposed without referring to the provisions of sub paras of para 4 of Schedule 1 of which the appellants have been held guilty of contravention of the provisions of each and every sub paras of para 4 of Schedule 1 to Regulation 5(1) in violation of principles of natural justice even if the appellant has no case of merit in this regard.
The amount imposed towards penalty against the appellants are not commensurate with the contravention alleged against the appellants whereas the contraventions are technical in nature warranting a lesser penalty of ₹ 2 lakhs.
While deciding the stay application, the appellants were directed to deposit ₹ 4 lakhs with the respondent as a penalty amount and the said amount has already been deposited by the appellants.
The impugned order is passed contrary to the provision of section 13(1) of the Act and thus it is modified. The penalty already deposited under the said provision be appropriated by the respondent (as counsel for the appellant is agreeable for the same). The Revision Petition filed by the respondent is become infractuous.
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2019 (4) TMI 1355 - SUPREME COURT
Offence under FEMA - writ petition in the High Court against the Union of India and sought therein a writ of mandamus claiming refund of the pre-deposit amount - High Court allowed the appeals, set aside the order of the Tribunal and restored the order of the Adjudicating Authority - Whether the High Court was justified in allowing the appeals filed by the Union of India.
HELD THAT:- High Court did not examine the case of the parties in the context of material placed by the appellants, though the Tribunal in Para 29 of its order has considered the said material.
High Court should have taken into consideration the said material with a view to decide as to whether it was relevant or/and sufficient, and whether it could justify the appellants’ case as contemplated under Section 8 of FEMA.
High Court seemed to have proceeded on wrong assumption that since the appellants did not file any material, a case was made out against them. This observation of the High Court, in our view, was contrary to the record of the case and hence, interference in the impugned order is called for.
The proper course in such a case would be to remand the case to the High Court and request the High Court to decide the appeal afresh on merits in accordance with law.
Appeals succeed and are accordingly allowed. The impugned order is set aside. The case is remanded to the High Court for deciding the appeals afresh on merits in accordance with law keeping in view the observations made above.
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2019 (4) TMI 1088 - DELHI HIGH COURT
Cancellation of the Passport - investigation being conducted under FEMA - Request for an alternate mode of examination by video conferencing - HELD THAT:- In the present case, the petitioner is a non-resident Indian and contends that the provisions of FEMA are inapplicable. Notwithstanding the aforesaid contention, Mr. Tripathi, learned Senior Counsel for the petitioner had made a statement before this Court on 14.08.2018 that the petitioner would provide all documents as required by the respondents even though, according to the petitioner, the same are not required to be disclosed.
It is not disputed that in compliance with the aforesaid order, the petitioner has supplied all documents that were called for by the ED. This Court had, during the course of proceedings, also pointedly asked Mr. Amit Mahajan, learned counsel for the respondents that whether there was any other document that was required by the ED. Although, he did not dispute that all documents had been provided, he nonetheless submitted that the petitioner was required to be confronted with certain documents and, therefore, his presence was necessary.
The petitioner had voluntarily agreed to appear by teleconferencing and also make all arrangements for the same, however, that was not accepted. In this regard, the Division Bench of this Court in Lalit Kumar Modi [2014 (10) TMI 527 - DELHI HIGH COURT] had observed that FEMA did not entail custodial interrogation and, therefore, a request for an alternate mode of examination by video conferencing ought not to be shrugged aside
This Court is of the view that the controversy involved in the present petition is covered by the decision of the Division Bench in Lalit Kumar Modi [2014 (10) TMI 527 - DELHI HIGH COURT] and the petitioner’s passport could not be suspended in public interest.
In terms of Section 10(1)(e) of the Passports Act, a passport can be cancelled in cases where offence alleged to have been committed by the holder of passport is pending before a criminal court in India. Further, in terms of Section 10(3)(h) of the Passports Act, a passport can be cancelled if a warrant or summons for the appearance, or a warrant for the arrest, of the holder of the passport has been issued by a Court under any law for the time being in force.
Criminal prosecution as contemplated under Section 13(1C) of FEMA can be commenced by filing a criminal complaint. Plainly, if such a complaint is filed and summons are issued by a competent court, the passport facilities provided to the accused could be withdrawn by virtue of Section 10(3)(h) of the Passports Act.
Impugned order suspending the petitioner’s passport is set aside. However, it is clarified that respondent no.3/ED is not precluded from initiating any other proceedings as permissible in law.
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2019 (4) TMI 592 - SUPREME COURT
Detention orders u/s 3 read with Section 12A of COFEPOSA - orders made during the period of Emergency proclaimed under Article 352(1) of the Constitution of India - grounds of detention were not communicated to the detenu in a language known to him - notice under Section 6(1) of SAFEMA to show cause why properties be not declared to be illegally acquired properties and forfeited to the Central Government under the provisions of SAFEMA - HELD THAT:- In the present case the order of detention under COFEPOSA was passed on 19.12.1974 and the petition challenging the detention was filed on 29.04.1975 i.e. before the proclamation of emergency was issued on 25.06.1975. The detenu was released after the lifting of the emergency. All through, the Writ Petition was alive and pending in High Court and it was disposed of as having become infructuous on the statement made by the counsel for the Writ Petitioner on 24.02.1978. The instant case is thus covered by para 41 of the decision of this Court in Amratla [1994 (5) TMI 235 - SUPREME COURT]. However, since the matter was remitted by this Court on 24.02.2004, to be disposed of on merits, we now proceed to consider whether merits were rightly considered.
The order of detention in this case was not revoked under any of the postulates of the proviso nor was it set aside by any competent court and as such the provisions of SAFEMA must apply. The High Court was right in observing that the detention “had run right through the duration or continuance of the emergency”. Though the petition was pending during the length of this time and was taken up for hearing after the lifting of the emergency, no attempts were made to have the petition disposed of on merits. Pertinently, the notices under SAFEMA were issued to Roshan Lal and his wife Sheelawati while the possibility that the SAFEMA proceedings could be premised on the validity of the detention order was very much alive and yet, the matter was chosen not to be agitated on merits. The criticism of Mr. Bagai, learned Advocate that the High Court had overruled the order dated 24.02.2004 passed by this Court, is totally incorrect. Nonetheless, we proceed to consider the submissions raised by Mr. Bagai, learned Advocate regarding challenge on merits.
In the present case, the representation dated 17.01.1975 was considered by the State on 11.02.1975 and the rejection was communicated to the detenu. Moreover, at no stage, any grievance was raised that the grounds of detention were not communicated to him in a language known to him. Similarly, the submission that the grounds of detention were identical, is also without any merit. Insofar as the order of detention under COFEPOSA was concerned, the grounds dealt with instances where the detenu had indulged in smuggling of goods, on the basis of which subjective satisfaction was arrived at as regards his propensity to deal in smuggled goods. Having considered the factual aspects of the matter, the grounds raised by Mr. Bagai, learned Advocate are without any substance and merit. We, therefore, affirm the view taken by the High Court and dismiss said submission.
The challenge to order of detention dated 19.12.1974 passed under the provisions of COFEPOSA in respect of Roshan Lal must fail. The Competent Authority and the Appellate Tribunal constituted under the provisions of SAFEMA had, after issuance of due notice and granting every opportunity to the noticees, arrived at findings that the properties mentioned in the schedules to the notices were illegally acquired and that they stood forfeited to the Central Government free from all encumbrances. All the prayers made in Civil Writ Petition being meritless said Writ Petition deserved to be rejected and was rightly dismissed by the High Court. No reason to take a different view in the matter and this Criminal Appeal is dismissed.
Detention under Section 3(1) of COFEPOSA - HELD THAT:- The detention order was sought to be assailed before the High Court inter alia on the grounds of non-supply of documents; delay in passing the order of detention and supply of illegible documents. Those grounds were found to be without any substance by the High Court and the challenge so raised was negated. Having gone through the record, we do not find any error in the view taken by the High Court. We, therefore, dismiss this Appeal.
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2019 (4) TMI 332 - ATFEMA
Guilty pf provisions of section 8 and section 40 of FERA - diaries relied upon by the prosecution as an evidence - HELD THAT:- The present proceedings are an offshoot of the "Jain Hawala Diaries‟ case [2013 (8) TMI 400 - DELHI HIGH COURT] which ended in quashing of the criminal proceedings as a result of the judgment of the Hon‟ble High Court in L.K. Advani vs. CBI [1997 (4) TMI 524 - DELHI HIGH COURT] wherein, it was held that the diaries relied upon by the prosecution are inadmissible in evidence and cannot be called books of accounts.
On the basis of the entries of the dairy M-207/93 two criminal complaints bearing CC No. 61/1/91 and 107/1/96 were filed before the ACMM. After the recording of the pre-charge evidence the Trial Court has discharged the present Appellant and the same has been upheld by the appellate court on the ground that the said entries are inadmissible in evidence as no case is made out based on the same. The same was decided on merit. The said order of discharge has not been set-aside as of today.
It is a settled law that the rulings of the Supreme Court are binding under Article 141 of the Constitution of India, wherein a higher court has rendered a particular decision, said decision must be followed by a subordinate or a lower court unless it is distinguished or over-ruled or set aside.
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2019 (4) TMI 138 - ATFEMA
Contravention of the provisions of Section 18(2) & 18(3) of FERA, 1973 - failure to realize the export proceeds - HELD THAT:- Appellant neither has the finances to carry on a protracted litigation in Doha, Qatar. (Additional affidavit in this regard has also been filed).
The Appellant has addressed numerous letters to its Advocate Ahmed Ali Morafi to enquire about the current status of the matter but unfortunately had not received any written response from him. The Appellant has also tried to contact the said advocate on his phone number mentioned in his letter head but is unable to reach him on the same.
It has come on record that even after taking all reasonable steps, it is quite evident that the export proceeds could not be realized for reasons /due to circumstances which were beyond the control of the Appellant. Department has not been able to prove that certain acts on part of the Appellant resulted in the non-realization of the export proceeds.
As submitted on behalf of appellant that the total number of Appellant during the period during the period during the financial year 1992-93 to 1995-96 was ₹ 5.61 crores. There is no outstanding bills of the Appellant with their Banker for the financial years 1997-98, 1998-99, 1999-2000) and the said fact has been certified by Global Trust Bank Ltd. The unrealized amount of ₹ 17,85,835/- does not constitute even 5% of the total turnover. The Appellant is entitled for write-off of the unrealized export proceeds as per RBI Circular No.88 dated 12.03.2013.
Under these circumstances and in the light of above, it is evident that it is held that the Appellant has taken all sufficient, reasonable and timely steps which are legally permissible within their limited means and to realize the unpaid export value.
The Appellant has discharged the burden cast upon him under Section 18(2) r.w. 18(3) of FERA, 1973. In this context the appellant seeks to rely upon the decisions of the Hon‟ble Delhi High Court in Ganesh Polytex Ltd. and Ors. Vs. Union of India (UOI) and Ors. [2010 (9) TMI 463 - DELHI HIGH COURT]
The appeal is allowed, the benefit is given to the appellant who should not be penalized for non-repatriation of the full export value within the prescribed period, the appellant is exonerated from the allegations made in the SCN dated 29.06.2001. The impugned order is set-aside.
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2019 (3) TMI 2023 - DELHI HIGH COURT
Offence under FEMA - Department has already registered and initiated investigation under the provisions of FEMA - HELD THAT:- The issues raised in this petition are under investigation as stated in para 5 of the counter affidavit filed by the respondent no.1, which reads as follows:
“5. I humbly submit that Respondent No.1 Department has already registered and initiated investigation under the provisions of FEMA, 1999 against the Respondent No.2 and Respondent No.3 to ascertain that whether the Respondent no.2 and Respondent no.3 have been contravening any provisions of FEMA, 1999 or contravening any Rule, Regulations, Notification, Direction or order issued in exercise of the powers under FEMA, 1999 or contravening any condition subject to which an authorisation issued by the Reserve Bank of India etc. for which the investigation under FEMA, 1999 is under progress.”
Nothing further survives in this petition for adjudication. Dismissed.
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