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FEMA - Case Laws
Showing 1 to 5 of 5 Records
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2014 (5) TMI 1192
Jurisdiction to issue notice under Section 51 of FERA 1973 - HELD THAT:- This Court, upon perusal of the paper book, is prima facie of the view that as the impugned order is only a show cause notice and that too of the year 2003, the ends of justice would be met if the petitioners are given liberty to raise the issue of jurisdiction at the preliminary stage before the adjudicating authority itself.
The adjudicating authority is directed to decide the aforesaid preliminary issue. All rights and contentions of both the parties including the issue of delay and laches are left open.
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2014 (5) TMI 863
Contravention of Section 9 (1) (d) of Foreign Exchange Regulation Act, 1973 - Payment made on behalf of foreign national without prior approval of RBI - Held that:- There can be no doubt that a retracted statement under Section 40 FERA, cannot form the sole basis for determining whether the maker of such a statement is guilty of contravening any of the provisions of FERA. It shall have to be corroborated by other independent evidence. In determining whether such a retracted statement can be relied upon, it will have to be examined whether the statement could be said to have been made voluntarily.
Statement made by Mr. Saluja contains a wealth of details on the transactions undertaken by him at the behest of either his brother Dr. R.S Saluja or others. He has explained in minute detail the entries in the loose sheets. The details on every page of the loose sheets could not have been explained by anyone other than one fully conversant with the transactions. It is impossible for such details to have been fabricated by the officials of the ED. There is nothing credible brought on record by Mr. Saluja to persuade the Court to conclude Mr. Saluja was under threat, duress or any form of coercion that at the time when he made the statement and that he did not make it voluntarily.
The entries/notings in the loose sheets recovered from his residence as explained by Mr. Saluja in his statement under Section 40 FERA fully substantiated the case of the ED that he had involved himself in transactions in violation of the FERA. Further corroboration was from the details of the STD calls exchanged between Mr. Saluja, Mr. Kedia and Mr. Shah. The fact that the foreign exchange may not have been recovered from the residence of Mr. Saluja does not weaken the case of the ED. According to the ED, the Indian currency paid to Mr. Saluja was for delivery of foreign exchange abroad. As noted in the AO, the details of the foreign bank accounts were available in the documents seized from the residence of Mr. Saluja.
The telephone number of Mr. Gopalani was found in the loose sheets recovered from the residence of Mr. Saluja. One of these loose sheets at page 19 contained instructions in writing by Mr. Gopalani. This was confirmed by the report of the hand writing expert. Mr. Gopalani did not challenge the report of the handwriting expert. He did not seek to cross-examine the expert. The report, therefore, corroborated the retracted statement of Mr. Saluja that he had received instructions from Mr. Gopalani to pay USD 50,000 to Geeta Soni. The aforementioned evidence was sufficient to conclude that Mr. Gopalani had contravened Section 9 (1) (f) (i) FERA. - Decided against Appellants.
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2014 (5) TMI 824
Violation of Section 8 (1) of the Foreign Exchange Regulation Act, 1973 - allegation that appellant has exported the goods "only for availing export benefits" - levy of penalty - Held that:- From the inquiries purportedly made by CGI, Dubai, as reflected in the correspondence between it and the DRI, the consignment was probably not cleared by APL since there were legal problems regarding the copyright raised by the Dubai Customs. Interestingly, in the "brief investigation report", enclosed with the letter dated 12th April 2002 written by DRI to the ED, it was admitted that in order to establish that money laundering was the main motive behind the whole exercise of export "it is necessary to have on hand the export products, i.e., the cassettes." The report noted that "we do not have any representative sample of the export product and it is also not possible to get a representative sample of the export that is more than one and half year old." It was, therefore, stated that it may not be possible to establish a case of export of sub-standard goods and/or goods not matching the exact description. The report concluded that the non-clearance of goods "gives rise to doubts that the transaction may not be genuine and this indicates that there may be violations of provisions of FERA/FEMA."
What is clear from the document is that there were only doubts being expressed and there was no evidence as such to back the suspicion.
The AT misdirected itself in shifting the burden of proof of suspicion to the Appellants by invoking Section 106 of the Evidence Act.The reasons for APL not lifting the consignment can, by no stretch of imagination, be said to be within the "exclusive knowledge" of the Appellants. APL was a different legal entity based in Sharjah, UAE. Inquiries could have easily been made with APL itself as to why it did not lift the consignment.
The major premise of the entire proceedings was that through non-banking channels NIL paid a sum of ₹ 35,92,512 to APL. There was absolutely no evidence of any kind to back this allegation. In the absence of proof of the above alleged transaction, it could not have been concluded by the AT that NIL had improperly received USD 83,160 and thereby contravened Section 8 (1) FERA. Suspicion in this case was allowed to replace proof and this resulted in an erroneous order being passed by the AT. - Order set aside - Decided in favour of assessee.
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2014 (5) TMI 784
Contravention of Sections 8(1) and 8(2) of the Foreign Exchange Regulation Act’ 1973 - Penalty - recovery and seizure of Indian currency - No opportunity for cross examination granted - Held that:- there was miscarriage of justice in denying the request of the Appellants for cross-examination of the ED officials. Allowing the request would have enabled the SD to determine whether the claim that the confessional statements were recorded under threat and coercion was credible - Although the mere discharge of the Appellants in the criminal proceedings will not ipso facto result in their being exonerated in the adjudication proceedings’ it is significant that even in the criminal proceedings the ED was unable to prove the so-called confessional statements of the Appellants under Section 40 FERA in accordance with law. A perusal of the original records shows that only the photocopies of the loose handwritten sheets are available. The originals of the Section 40 statements have not been marked as exhibits by examining the persons who recorded them.
The AT also erred in proceeding on the basis that the failure to supply English translations of the seized documents was not violative of natural justice since the author of the documents was Prem Singh. The writings on the loose sheets were in Gurmukhi and not Pushto as thought by the ED during the adjudication proceedings. If reliance was going to be placed on the said loose sheets’ then surely they ought to have been translated if they had to corroborate the retracted statements of Prem Singh and Tarlochan Singh - Order set aside - Decided in favour of appellant.
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2014 (5) TMI 288
Order of detention - Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, (COFEPOSA) - delay in passing the orders - Held that:- We must bear in mind that distinction exists between the delay in making of an order of detention under a law relating to preventive detention like COFEPOSA and the delay in complying with procedural safeguards enshrined under Article 22(5) of the Constitution. In view of the factual scenario as aforesaid, we are of the opinion that the order of detention is not fit to be quashed on the ground of delay in passing the same. The conclusion which we have reached is in tune with what has been observed by this Court in the case of M. Ahamed kutty v. Union of India, [1990 (1) TMI 72 - SUPREME COURT OF INDIA]
Undue and unexplained delay in execution of the order of detention vitiates it, but in the facts of the present case, it cannot be said that such delay has occurred. As stated earlier, the order of detention dated 6th of May, 2013 was served on the detenu on 11th of June, 2013. It is expected of the detaining authority to take recourse to ordinary process at the first instance for service of the order of detention on a detenu and it is only after the order of detention is not served through the said process that recourse to the modes provided under Section 7 of the COFEPOSA are to be resorted.
Here, in the present case, that occasion did not arise as the order of detention was served on the detenu on 11th of June, 2013. Therefore, in our opinion, the order of detention cannot be said to have been vitiated on this ground also.
We cannot expect the detaining authority to know each and every detail concerning the detenu in different parts of the country. Not only this, the conditions imposed while granting bail to the detenu which we have reproduced above in no way restrains him from continuing with his prejudicial activity or the consequences, if he continues to indulge. We are in agreement with the High Court that the bail order passed by the trial court in Andhra Pradesh is not a crucial and vital document and the omission by the detaining authority to consider the same has, in no way affected its subjective satisfaction.
There is no error in the order of detention and the order passed by the High Court, refusing to quash the same. - Decided against the appellant.
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