TMI Blog2019 (8) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... the Adjudicating Authority has in 52 cases against the Appellant, quashed penalty imposed against him and the same have till date not been challenged by the Respondent before the Appellate authorities. The present proceedings, which are based on factually parallel route, atleast all the said orders and facts ought to have been considered in the impugned at the time of passing the order. In the present case, it is the case of the appellant that apart from the retracted confessional statement of the Appellant, there is no independent evidence on record to corroborate the retracted confessional statement of the Appellant - the said statement cannot be relied upon to impose any penalty upon the Appellant. Appeal allowed - decided in favor of appellant. - FPA-FE-05/DLI/2007 - - - Dated:- 30-7-2019 - Justice Manmohan Singh Chairman And Shri G.C. Mishra Member For the Appellant : Shri Madhav Khurana, Advocate, Shri Vignaraj Pasayat, Advocate For the Respondent : Shri Prashant Pandey, Legal Consultant JUDGEMENT FPA-FE-05/DLI/2007 1. The Appellant has filed the present Appeal under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .K. Jain and G.S. Nirmal were his employees, who were also the mandate holders in some of the NRE accounts of Mr. V.D. Jaiswal. (c ) He would procure foreign exchange from unauthorized markets in India and deposit the same in the NRE accounts of Mr. V.D. Jaiswal. (d) Drafts/ pay orders were issued in favor of several persons, from the NRE Accounts of Mr. V.D. Jaiswal, by couching the same as gifts, in order to enable them to avail the benefits of the Immunity Scheme, 1992, in lieu of which he and his employees demanded payment in the form of Cash in Indian currency, covering the value of the gifts and in addition thereto, charged a premium at a fixed percentage of the value of the gifts . 5. Admittedly the Appellant after two days wrote Letter dated 14.12.1995 addressed to the Deputy Director, Enforcement Directorate, informing the Officials of the Respondent searched his Office and Residential premises on 12.12.1995 and thereafter forcibly and illegally detained him at their Office. During the course of his unlawful detention, the Officers of the Respondent including Mr. R.K. Paliwal, Mr. N.K. Katyal and K.C. Abraham beat him u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... medy of appeal under Section 90 of the FEMA, particularly, because, according to us, that would not, now, be an equally efficacious remedy. In view of the foregoing discussion, these writ petitions are allowed. The show cause notices and the consequent adjudication orders are set aside. There shall be no order as to costs. 9. On 15.03.2010, the Respondent filed a Special Leave to Petition, being S.L.P. (C) No. 013877/2011 titled as Directorate of Enforcement V/s Standard Chartered Bank . By Order dated 09.05.2011, leave to Appeal was granted by the Hon ble Supreme Court in the SLP and the same was directed to be tagged with SLP (C) 8442/2010. Consequently, the SLP was renumbered as Civil Appeal bearing Nos. 4228 to 4261 of 2011 (hereinafter referred to as the Civil Appeal ). 10. The Hon ble Supreme Court on 11.01.2013 was dismissed the Civil Appeal in limine, for non- prosecution as the Respondent had failed to take steps for service of Notice. 11. By Order dated 06.01.2014, the Hon ble Supreme Court had restored the Civil Appeal on an Application moved by the Respondent. Thereafter by Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual and came to conclusion that the circular dated 31st July, 2005 advised foreign exchange dealers to strictly follow instructions given therein and made it clear that prior to the circular there was no requirement clearly pointing out that deposits in NRI accounts could not be made by a person other than the NRI account holder themselves, vide a judgment dated 18th December, 2009 in civil writ petitions preferred by Standard Chartered Bank and Bank of America N.A, in respect of similar show cause notices, a Division Bench of this Court made following observations: 13. Mr. Chandhiok also submitted that the circular dated 31.7.1995 was only a clarificatory circular and it only clarified something which was already there in paragraph 13B.22 Thus, according to him, the circular dated 31.7.1995 and the amendment introduced in paragraph 13B.22 did not make any difference and nothing new was added. 14. Mr. Chandhiok also argued and submitted that now that the show cause notices had culminated into adjudication orders, the petitioners, have the alternative remedy of filing appeals under Section 19 of the Foreign Exchange Amendment Act, 1999. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e High Court of Delhi reaffirmed the view as mentioned above, whilst holding as follows: - 9. In the above-noted facts, it is clear that the show cause notices had been issued to the appellant and its predecessor in interest in the month of March/April, 2002 for the irregularities allegedly committed in the year 1993 i.e after about nine years. What can be deduced from the facts narrated hereinabove is that appellant has been found to have contravened various provisions of FERA and the rules and regulations framed thereunder, since it had accepted the deposits in the NRE account from the person other than the account holder. Thus, the question that needs attention of this Court is whether deposits in foreign currency made by the mandatee or any person other than the account holder, in the NRE account, prior to 31st July, 1995 would amount to infringement of provisions of Section 6(4), 6(5), 73(3), 49 and 9(1)(e) of Foreign Exchange Regulations Act, 1973 read with Section 29B.8(c) of Exchange Control Manual, 1987. 10. It appears that similar show cause notices had been issued to several banks by the Department resulting in filing of number of wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver above the value of the said instruments from the recipients of such instruments in the garb of gifts that they used to issue gift deeds to such beneficiaries which got pre- signed by the said NRE A/c holder Sh. Subhash Sethi . 11.In the first place, it is not clear why, after recording the statements under Section 40 FERA of the Appellant and Mr. Mendiratta in May 1995, the ED waited till the last date of the sunset period, i.e., 30th May 2002 for issuing the Memorandum. The second feature is that the only relied upon documents in the Memorandum are the statements made by the Appellant and Mr. Mendiratta, the letter dated 7th August 1995 of Mr. Sethi and the statement of account provided b ythe AMEX Bank. In other words, the ED does not appear to have undertaken any further investigation in the seven years since it recorded the statements. In particular, there was no attempt made to undertake investigation outside India to find out the names of the persons who made remittances into the NRE Account of Mr. Sethi. 20. As regards contravention of Section 9(1)(a) and Section 9(1)(f)(i), the Court is un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 220/(Del)/2001 titled as Dr. Vishwadarshi Jaiswal V/s The Joint Commissioner of Income Tax . 21. By Judgment dated 06.12.2004, the Income Tax Appellate Tribunal has allowed the aforementioned Appeal and set aside the Order dated 30.03.2001 passed by the CIT (Appeals) and was pleased to observe as follows: - 16. The Assessee maintained before the CIT(A), that he was a Non- Resident at the relevant point of time and source of funds for the various deposits in the Bank Account was his foreign earnings which were earned during his employment and business abroad . 31 The Complaint of the CIT(A), appears to be that deposit of funds was in foreign currency and the funds did not flow through banking channels. The explanation of the assesse was that any foreign currency that is deposited in an NRE/FCNR account has to be necessarily declared in Form CDF with the RBI and therefore, it cannot be said that any income can be said to be accrued to the Assesse in India . 33. The other point for consideration is quantum of undisclosed income determined by the CIT(A), in exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice that in some of the cases retracted confession has been used as a piece of corroborative evidence and not as the evidence on the basis whereof alone a judgment of conviction and sentence has been recorded. 25. Further, the Hon ble Apex Court in the case of State (NCT of Delhi) V/s Navjot Sandhu alias Afsan Guru reported as JT 2005 (7) SC 1 , held as follows: - If it appears to the court that the making of the confession was caused by any inducement, threat or promise proceeding from a person in authority, the confession is liable to be excluded from evidence. The expression 'appears' connotes that the Court need not go to the extent of holding that the threat etc. has in fact been proved. If the facts and circumstances emerging from the evidence adduced make it reasonably probable that the confession could be the result of threat, inducement or pressure, the court will refrain from acting on such confession, even if it be a confession made to a Magistrate or a person other than police officer. 26. In the present case it is the case of the appellant that apart from the retracted confessional statement of the App ..... X X X X Extracts X X X X X X X X Extracts X X X X
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