TMI Blog2017 (6) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... within the stipulated period. The company was not able to place any material to show the reason for the failure to realise the said amount within the stipulated period, or any permission for extension of period has been obtained from the Reserve Bank of India, as contemplated under Section 42 of the FEMA. In the absence of any such orders from the Reserve Bank of India, the contention of the company cannot be accepted. Therefore, as the company has not complied with the provisions of FEMA, the action initiated by the department, for violation of FEMA is in consonance with the provisions of law. In view of the above, the Tribunal has lost its sign to consider the above said provisions of law, in allowing the appeals. Therefore, we have no hesitation to interfere with the orders passed by the Tribunal and hence the same is liable to be set aside. - Civil Miscellaneous Appeal Nos.1997 & 1998 of 2010, M.P. No. 1 of 2010 in CMA Nos.1997 & 1998 of 2010, W.P. No. 15793 of 2010, CMA Nos.1997 & 1998 of 2010 - - - Dated:- 18-4-2017 - S. Manikumar And D. Krishnakumar, JJ. For Appellant : Mr. M. Dhandapani, Spl. Counsel JUDGMENT ( Judgment of the Court was made by D. Krishnak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - b)M/s. Hitech Software Inc. USA - ₹ 10,31,11,442/- c)M/s. Mascon Global Inc. USA - ₹ 93,67,085/- d)M/s. MSIL, Dubai Branch - ₹ 1,78,42,481/- e)M/s. MSIL, Chicago - ₹ 57,89,693/- - Rs.19,33,90,485/- Hence, the department proceeded against the company towards the alleged contravention of Section 8 of the Act, read with Regulation 3 of the Foreign Exchange Management (Realization, Repatriation and Surrender of Foreign Exchange) Regulations 2000 and also Regulation 9 of the Foreign Exchange Management (Export of Goods and Services) Regulations 2000 and the Special Director of Enforcement, Mumbai issued a Show Cause Notice dated 11.06.2003 to the company, as to why adjudication proceedings, as contemplated under Section 13 of the Act should not be held against them, for the alleged contravention of provisions of the FEMA Act and the regulations made therein. Questioning the jurisdiction of the Special Director of Enforcement, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... os.166 and 176 of 2008, on the following among other grounds :- 1.The order impugned has been passed mechanically, based on the complaint and investigation conducted by the Assistant Director of Enforcement Directorate, Mumbai. As such the investigation is void ab-initio and non est in the eyes of law. 2.No enquiry was conducted by the Investigating Officer nor any records are available to show that the company is responsible or instrumental in non-realisation of dues. 3.All the reasonable steps have been taken by the company to realise the dues from overseas customers and repatriate to India such foreign exchange. 4.Since no amount was due in foreign exchange, there was no contravention of aforesaid provisions and so, there is no occasion to impose any penalty upon the company by the Special Director. 5.There is no contravention under FEMA or under any regulations, which authorises the competent authority to levy additional penalty separately upon such person. 6.The Special Director did not adhere to the principles of natural justice and ignored the material facts and principles of law. 5. The Appellate Tribunal, after considering the submission of the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestigation on the show cause notice and the company furnished information to the Enforcement department. Whileso, the company challenged the investigation conducted by the Bombay Zonal Office in W.P. Nos. 1171 and 1172 of 2004, on the ground of its jurisdiction. Based on the order dated 28.01.2004, passed by this Court in the aforesaid writ petitions, the said investigation was transferred to the Special Director of Enforcement I, New Delhi, for further adjudication. 7. Learned counsel for the department, further submitted that, under the provisions of FEMA Act, there is no bar to take up cases for investigation, by any Zonal Office, in so far as the statutory scheme of the Act is concerned and that the provisions of FEMA do not provide any jurisdictional limit for conducting investigation. Further, it is submitted that so far as the investigation is concerned, the Enforcement Director has power to investigate all over the country, with effective assistance of all the branches of either their department or other allied departments, which have useful information and effective investigation, in order to safeguard the foreign exchange. Therefore, as far as jurisdiction is concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company from any foreign customer and merely because the individual of the company did not say so earlier, cannot be a ground to disbelieve and discard the contention. As far as the statement made by Mr.T. Varadharajan, the Managing Director of the company, who is also a party to the proceedings, is not a voluntary statement but was recorded by force, pressure and coercion by the officials of the Enforcement Directorate. It is further contended that the Tribunal has rightly come to a conclusion that the department has not brought on record any material to show that the company has rendered services to any foreign customers of Dubai or Chicago. Further it is submitted that involuntary confessional statements has to be corroborated by independent evidences and the court should be satisfied that the said statements are voluntary and true. The Tribunal has rightly decided to issue orders in favour of the company, being convinced that the company has brought sufficient evidences to show that it has taken all reasonable steps to realise its dues from M/s. MSIL, UK and the company have realised and repatriated the entire amount due in US dollars from M/s. Hitech Software Inc., USA and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by its letter dated 11.04.2003. Hence, the show cause notice dated 11.06.2003 was issued to the company, under Section 8 of the Act, read with Regulation 3 of the Foreign Exchange Management (Realization, Repatriation and Surrender of Foreign Exchange) Regulations 2000. Section 8 of the Act, reads as follows :- Save as otherwise provided in this Act, where any amount of foreign exchange is due or has accrued to any person resident in India, such person shall take all reasonable steps to realise and repatriate to India such as foreign exchange within such period and in such manner as may be specified by the Reserve Bank Regulation No. 3 of Foreign Exchange Management [Realisation, Repatriation and surrender of Foreign Exchange] Regulation 2000, reads, A person resident in India to whom any foreign exchange is due or has accrued shall, save as otherwise provided under the provisions of the Act, or the rules and regulations made thereunder, or with the general or special permission of the Reserve Bank, take all reasonable steps to realise and repatriate to India such foreign exchange, and shall in no case do, or refrain from doing anything, or take or refrain from tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d reveals that there is an export outstanding amount of ₹ 19,33,90,485/- by the respondent company. The department have not accepted the contention of the company that they have taken all reasonable steps to realise its dues from M/s. MSIL, UK and the company have realised and repatriated the entire amount due in US dollars from M/s. Hitech Software Inc., USA and M/s. Mascon Global Inc., USA. As regards the alleged dues stated to be receivable by M/s/ MSIL, Dubai and Chicago units, the company cannot be held guilty in the absence of any evidence establishing the existence of any such dues. 15. Reading of the above said provisions would clearly reveal that the company should take all reasonable steps to release and repatriate to India, the entire amount due in US dollars within such period and in such manner as stated by the Reserve Bank of India. In the case on hand, the department states that the company had obtained no permission from the Reserve Bank of India, under Section 42 of FEMA. Therefore, any violation to section 42 of the Act, the provisions of FEMA would attract against the company. No material has been produced before this Court as to what steps have been tak ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
