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2014 (12) TMI 1428 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Condonation of Delay denied where 11-year filing delay lacked bona fide explanation and showed negligence.
Condonation of delay requires a bona fide and sufficient explanation; an inordinate delay caused by negligence or an unacceptable, unsupported account cannot be excused. Here, the appellant knew of the adjudication proceedings, had been represented before the adjudicating authority, and failed to give a cogent explanation for filing the appeal after more than 11 years. The Tribunal therefore refused to condone the delay and rejected the appeal.

2014 (12) TMI 1225 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Partial waiver of penalty granted where export realisation was largely complete and financial hardship supported interim relief.
Partial waiver of penalty and stay of recovery may be justified where most export proceeds have been realised, only a small balance remains outstanding, and documentary efforts show attempts to secure remittance through banks and the Indian High Commission. Weak financial condition, including continuing losses and near-closure of business, supported prima facie relief at the interim stage. The Tribunal granted partial waiver and stayed recovery of the penalty on the condition that 15% of the penalty be deposited and a bank guarantee be furnished for the remaining 85%.

Stay of recovery of penalty - waiver of pre-deposit of penalty - prima facie case for partial waiver of penalty - bank guarantee as security for balance penalty - adequacy of steps to realize export proceeds - penalty under Foreign Exchange Regulation ActStay of recovery of penalty - waiver of pre-deposit of penalty - prima facie case for partial waiver of penalty - bank guarantee as security for balance penalty - penalty under Foreign Exchange Regulation Act - Applications for stay of operation of the adjudicating order and for waiver of pre-deposit of the penalty - HELD THAT: - The Tribunal found that on the materials placed on record the appellants have made substantial realization of export proceeds and have filed bank certificates and correspondence with the High Commission evidencing efforts to recover the balance. The Adjudicating Officer's finding that two GRs totaling US$ 20,631.78 remained unrealized was not disputed and the respondent has not controverted the Indian currency equivalent. The appellants' audited reports prima facie indicate continuing financial losses and near closure of business. Having regard to these facts and the cited precedents, the Tribunal concluded that a prima facie case for partial waiver of the penalty was made out. In the exercise of its discretionary power it directed conditional relief: stay of realization of the penalty till final disposal of the appeals subject to each appellant depositing 15% of the penalty imposed and furnishing a bank guarantee for the remaining 85% within 30 days, with listing for reporting compliance/final hearing. [Paras 9, 10, 11]Applications for stay and waiver of pre-deposit are allowed in part: realization of the penalty is stayed till disposal of the appeals provided each appellant deposits 15% of the penalty and furnishes a bank guarantee for the remaining 85% within 30 days.Adequacy of steps to realize export proceeds - Whether the appellants took all reasonable and adequate steps to realize and repatriate the outstanding export proceeds - HELD THAT: - The Tribunal recorded that copies of bank certificates and correspondence with the High Commission and buyers were on record and, prima facie, efforts had been undertaken by the appellants. However, the Tribunal did not decide the adequacy of those efforts on the merits and indicated that such determination would be examined at the time of final disposal of the appeals. The statement in the order preserves the adjudicatory scrutiny of whether the appellants' steps were sufficient to exonerate them from liability. [Paras 9]Issue left open for final adjudication; adequacy of steps to realize the export proceeds to be considered at final hearing.Final Conclusion: The Tribunal granted interim relief by staying realization of the penalty until final disposal of the appeals on condition that each appellant deposit 15% of the penalty and furnish a bank guarantee for the balance 85% within 30 days; the question whether the appellants took adequate steps to realize the export proceeds is reserved for final adjudication.

2014 (10) TMI 885 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Condonation of long delay granted where service of notices and orders was not reliably proved
Delay of more than seven years in filing the appeals was condoned because the ex parte adjudication orders were not shown to have been duly served on the appellants. Service of the show cause notices was said to have been effected by affixation, but there was no reliable proof of proper service of either the notices or the adjudication orders. The appellants stated that they obtained copies only later and filed the appeals promptly thereafter, and their delay applications were supported by uncontroverted affidavits. The explanation was accepted as sufficient and convincing, so the appeals were entertained despite the long delay.

2014 (8) TMI 1017 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Condonation of delay in foreign exchange appeal allowed where ex parte adjudication lacked proof of service and delay explanation was bona fide.
Delay of more than eight years in filing an appeal against an ex parte adjudication order was condoned where the record did not show due service of the show cause notice or the adjudication order on the appellant or the erstwhile company. The appellant supported the explanation by affidavit and stated that knowledge of the proceedings arose only on receipt of the public demand notice. The tribunal treated the explanation as bona fide and sufficient, and the discrepancy in the figures on record also indicated that the matter required examination on merits. The condonation application was allowed.

2014 (5) TMI 1240 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Issues: (i) Whether the appellant contravened Section 9(1)(b) and Section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 by receiving and disbursing foreign-exchange related payments as alleged. (ii) Whether the penalties and confiscation of amounts imposed under the impugned order were sustainable.

Issue (i): Whether the appellant contravened Section 9(1)(b) and Section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 by receiving and disbursing foreign-exchange related payments as alleged.

Analysis: The appellant's own statements, though retracted, were found to be specific and detailed and were supported by seized documents, bank records, telephone bills, and the statements of other witnesses, including the bank managers, the employee handling the transactions, and persons who received amounts. The material showed that accounts in different names were used to receive drafts, cash, and telegraphic transfers and to disburse the amounts as instructed by a person resident outside India. The Tribunal held that the corroboration was sufficient and that the absence of cross-examination in the circumstances did not displace the evidentiary value of the material relied upon.

Conclusion: The contraventions under Section 9(1)(b) and Section 9(1)(d) were proved against the appellant.

Issue (ii): Whether the penalties and confiscation of amounts imposed under the impugned order were sustainable.

Analysis: The Tribunal held that the confiscated amounts were linked to the proven contraventions through the admitted and corroborated transaction trail, the seized records, and the bank account movements. It also found that the quantum of penalties was proportionate to the amounts involved and that there was no material infirmity warranting interference with the adjudication order.

Conclusion: The penalties and confiscation were upheld.

Final Conclusion: The appeal failed on merits, and the adjudication order was left undisturbed in full.

Ratio Decidendi: A retracted statement may sustain a finding of contravention where it is substantially corroborated by independent documentary and oral evidence, and the adjudicatory authority may rely on such corroborated material to uphold penalties and confiscation under FERA.

Corroborated retracted statements under FERA can sustain contravention findings and justify penalties and confiscation.
A retracted statement can still support a finding of contravention under FERA when it is substantially corroborated by independent documentary and oral evidence. Here, the Tribunal noted corroboration from seized documents, bank records, telephone bills, witness statements, and account movements showing receipt and disbursement of foreign-exchange related payments through accounts in different names. On that evidentiary trail, it treated the contraventions under Section 9(1)(b) and Section 9(1)(d) as proved and sustained the linked penalties and confiscation, finding no material infirmity or disproportionality in the adjudication order.

Contravention of Section 9(1)(b) and Section 9(1)(d) of FERA - confiscation under Section 63 of FERA - presumption as to documents under Section 72 of FERA - retracted statement corroboration - adjudication under FERA and admissibility standard in quasi criminal proceedingsContravention of Section 9(1)(b) and Section 9(1)(d) of FERA - retracted statement corroboration - presumption as to documents under Section 72 of FERA - Whether the appellant had contravened Section 9(1)(b) and Section 9(1)(d) of FERA - HELD THAT: - The Tribunal accepted the adjudicating officer's finding that the appellant received and distributed large sums by operating multiple bank accounts and by cash transactions as per instructions from a person abroad. The appellant's own detailed statement, though retracted, was recorded in his handwriting and was corroborated by independent documents (seized slips and telephone bills) and by statements of other persons (bank managers, employee Lokesh, K. Abdulla and recipients who confirmed payments). Under Section 72 of FERA the seized documents are presumed to be in the appellant's handwriting unless the contrary is proved; the appellant did not effectively displace that presumption. The Tribunal followed authorities holding that a retracted statement in adjudication proceedings is admissible with caution and may be relied upon when adequately corroborated. The Adjudicating Officer was not bound by the strict rules of the Indian Evidence Act in taking evidence under the Adjudication Rules. On the totality of admissions, documentary material and corroborative statements the Tribunal found the adjudicating officer's conclusion that the appellant contravened Section 9(1)(b) and 9(1)(d) to be sustainable. [Paras 27, 33, 34]The finding of contravention of Section 9(1)(b) and Section 9(1)(d) of FERA against the appellant is upheld.Confiscation under Section 63 of FERA - presumption as to documents under Section 72 of FERA - Whether the amounts specified in the impugned order were liable to be confiscated - HELD THAT: - The Tribunal noted that the impugned order itemised balances and seized amounts across several bank accounts and cash seizures which were held to be part of the amounts involved in the contraventions. The existence and operation of the relevant accounts were not denied and the transactions in those accounts corroborated the appellant's statements. The seized documentary material was presumed under Section 72 to be in the appellant's handwriting unless disproved, which was not done. Given the upheld finding of contraventions and the documentary and testimonial material connecting the seized amounts to those contraventions, the Tribunal found the confiscations to be in accordance with Section 63 of FERA. [Paras 37, 39]The confiscation of the amounts listed in the impugned order is upheld.Adjudication under FERA and admissibility standard in quasi criminal proceedings - retracted statement corroboration - Whether the penalties imposed were commensurate and reasonable and whether denial of cross examination vitiated the proceedings - HELD THAT: - The Tribunal observed that the adjudicating authority, in exercise of powers under the Adjudication Rules, is not strictly bound to follow the Indian Evidence Act and may take evidence as considered appropriate. The appellant did not specify which aspects of the corroborated information required cross examination nor did he effectively discredit the documentary record. The Tribunal applied the principle that retracted statements may be relied upon in adjudication proceedings if independently corroborated, and found adequate corroboration here. On the facts and amounts involved the Tribunal held that the penalties imposed were proportionate to the contraventions. [Paras 39]The penalties imposed are reasonable and the failure to cross examine does not render the proceedings vitiated in the circumstances of this case.Final Conclusion: The appeal is dismissed. The adjudicating officer's findings of contravention, the confiscation orders and the penalties imposed are affirmed; no order as to costs.

2014 (3) TMI 1118 - ATFEMA NEW DELHI FEMA

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Issues: (i) Whether the appeal was maintainable despite the absence of the impugned order and non-compliance with the prescribed procedure for obtaining a certified copy or inspecting the record. (ii) Whether the appellant was entitled to summon the documents and records sought under section 11 of the Prevention of Money Laundering Act, 2002. (iii) Whether the appeal could succeed in the absence of the company whose shares were attached and against which the complaint was also pending.

Issue (i): Whether the appeal was maintainable despite the absence of the impugned order and non-compliance with the prescribed procedure for obtaining a certified copy or inspecting the record.

Analysis: The appellate procedure required filing of the order appealed from and adherence to the prescribed mechanisms for inspection of records and obtaining certified copies. The appellant did not follow those procedures and instead relied on an informal communication. At the same time, the scope of section 26 was not confined by the respondent's narrow reading of the appeal rules, and an order of the Adjudicating Authority remained appealable even if not made under section 8.

Conclusion: The appeal was not liable to be rejected on the ground of absence of maintainability under section 26, but the appellant's procedural default in not following the prescribed process weighed against grant of relief.

Issue (ii): Whether the appellant was entitled to summon the documents and records sought under section 11 of the Prevention of Money Laundering Act, 2002.

Analysis: The power under section 11 is discretionary and is meant for relevant discovery, inspection, production of records and evidence in aid of the adjudication. The appellant did not specify the exact documents, their source, or their relevance with sufficient clarity. The request was found to be broad, generic and in the nature of a fishing exercise, and it was also seen as an attempt to delay time-bound adjudication proceedings concerning provisional attachment.

Conclusion: The appellant was not entitled to the summoning and production of the documents sought.

Issue (iii): Whether the appeal could succeed in the absence of the company whose shares were attached and against which the complaint was also pending.

Analysis: The shares attached belonged to the company, which was directly affected by any decision on release or production of records. Since the company was a necessary party for complete adjudication and the relief claimed would not bind it in its absence, the appeal was incompetent to that extent.

Conclusion: The appeal could not succeed in the absence of the company, and no relief could be granted on the appellant's behalf in relation to the company's attached shares.

Final Conclusion: The challenge to the refusal to summon documents failed on merits and on account of non-joinder of a necessary party, and the tribunal declined to interfere with the adjudicatory process.

Ratio Decidendi: The power to summon documents under section 11 of the Prevention of Money Laundering Act, 2002 must be exercised on the basis of clear relevance and specificity, and an appellant cannot bypass the prescribed procedural framework or seek broad discovery to stall time-bound adjudication; relief affecting an attached company's rights cannot be granted in its absence.

Specificity in PMLA document summons and procedural compliance limit discovery and affect relief against attached shares.
Procedural compliance and specificity were central to the discussion of appeal maintainability and document discovery in PMLA proceedings. The text states that an appeal was not to be rejected merely for lack of the impugned order, but relief was weakened by failure to follow the prescribed procedure for inspection and certified copies. It further notes that the power to summon documents under section 11 is discretionary and requires clear relevance and specificity; broad, generic requests amount to a fishing exercise and may be seen as delaying time-bound adjudication. It also records that relief affecting attached shares could not be granted without the company, treated as a necessary party.

Power regarding summons, production of documents and evidence - Reason to believe - Provisional attachment under PMLA - Maintainability of appeal under Section 26 - Necessity of certified copy and inspection of record - Necessary party and impleadment - Adjudicating Authority's powers under Section 11 - Tribunal's power under Section 35 - Regulations for inspection and certified copiesNecessity of certified copy and inspection of record - Regulations for inspection and certified copies - Appeal dismissed for non-compliance with prescribed procedure for filing appeals, inspection and obtaining certified copy of the impugned order. - HELD THAT: - The Appellant did not file the certified copy of the order appealed against nor seek inspection of the Adjudicating Authority's record in the prescribed manner under the Adjudicating Authority Regulations, 2006 (Form No. 4 for inspection and Form No. 10 for certified copies with prescribed fee). The Tribunal held that, even if an oral order was passed, it was incumbent on the appellant or his counsel to inspect the record or obtain the certified copy through the prescribed procedure and, if necessary, seek exemption with an undertaking. The appellant instead sent an unsanctioned registered letter and failed to explain non-compliance with the regulations; this procedural default justified dismissal of the appeal for want of compliance with the rules governing appeals under the PMLA and its regulations. [Paras 11, 12, 13, 14, 15]Appeal liable to be dismissed for failure to comply with statutory/regulatory procedure for inspection and certified copy; appeal not maintainable in present form on this ground.Maintainability of appeal under Section 26 - Adjudicating Authority's powers under Section 11 - An appeal under Section 26 of the PMLA is maintainable against any order of the Adjudicating Authority and is not restricted to orders under Section 8 alone. - HELD THAT: - The Tribunal rejected the respondent's contention that Rule 2(g) should restrict 'order' for the purposes of appeal to only orders under section 8. Section 26 permits any person aggrieved by an order of the Adjudicating Authority to prefer an appeal; the scope of Section 26 cannot be curtailed by a narrower construction of the Rules. Consequently, an order made under Section 11 by the Adjudicating Authority can be the subject of an appeal under Section 26. [Paras 16]Appeal is maintainable against orders of the Adjudicating Authority even if not passed under Section 8.Necessary party and impleadment - Provisional attachment under PMLA - M/s. Neptune Overseas Limited, whose shares were provisionally attached, is a necessary party and its absence renders the appeal incompetent to grant the relief claimed by the appellant. - HELD THAT: - The Tribunal applied principles analogous to Order I Rule 10 of the CPC to conclude that a company whose assets are attached is directly and legally interested and is therefore a necessary party; without its presence any order may not be binding on it and may lead to conflicting orders. The appellant had not impleaded the company nor shown authority to represent it; the application before the Adjudicating Authority was in the appellant's name and not by the company or by an authorized representative. For these reasons, the appellant could not seek relief on behalf of the company and the appeal was liable to be dismissed on the ground of non-joinder of a necessary party. [Paras 24, 25, 26, 27, 28]The company whose shares are attached is a necessary party; in its absence the appellant cannot obtain the relief sought and the appeal is liable to be dismissed on this ground.Power regarding summons, production of documents and evidence - Adjudicating Authority's powers under Section 11 - Reason to believe - The appellant was not entitled to sweeping directions to summon documents where the application was vague, non-specific, and did not demonstrate relevancy in the preliminary/provisional attachment proceedings. - HELD THAT: - Section 11 empowers the Adjudicating Authority to summon documents, but invocation of that power in time-bound provisional attachment proceedings requires specificity as to the documents sought and their relevance to the question of source of investment or ownership. The appellant's annexures failed to specify exact documents, their provenance or relevance, and sought wide-ranging material (including audit balances across many years) amounting to a fishing expedition that would delay adjudication. Given the respondent's recorded 'reason to believe' and the preliminary nature of attachment proceedings, the appellant bore the burden of demonstrating relevance; he did not do so. Consequently the request to summon broad categories of documents was properly declined. [Paras 29, 30, 37, 38, 39]Application for summoning/production of documents dismissed as vague, non-specific and not demonstrating requisite relevance in provisional attachment proceedings.Regulations for inspection and certified copies - Tribunal's power under Section 35 - The Tribunal declined to remand the matter for reasons of procedural non-compliance and did not exercise Section 35 jurisdiction to remit the matter back to the Adjudicating Authority. - HELD THAT: - Although the Tribunal noted the appellant's contention that no reasons were recorded by the Adjudicating Authority while rejecting the Section 11 prayer, it held that the appeal itself was procedurally defective. Having dismissed the appeal for non-compliance and other substantive defects, the Tribunal refused to remand the matter to the Adjudicating Authority or to exercise its powers under Section 35 to send the matter back. The Tribunal also observed that it would not pre-empt the Adjudicating Authority by adjudicating entitlement where doing so would bind the Authority in future proceedings; nonetheless, on merits it found the appellant's case wanting but declined any remand. [Paras 18, 19, 20, 21]No remand to Adjudicating Authority; Section 35 jurisdiction not exercised to remit the matter back in view of procedural defaults and substantive defects.Provisional attachment under PMLA - Appeal dismissed and costs awarded to the respondent. - HELD THAT: - For the cumulative reasons of non-compliance with appeal/regulatory procedure, non-joinder of necessary party, vagueness and lack of relevancy of the documents sought, and impermissible attempts to circumvent court orders regarding documents, the Tribunal concluded it would not grant the relief claimed and dismissed the appeal. The Tribunal also imposed costs on the appellant. [Paras 41, 42]Appeal dismissed; appellant to pay costs to the respondent.Regulations for inspection and certified copies - Provisional attachment under PMLA - Documents ordered from Forward Markets Commission could not be procured by circumventing pending higher court proceedings and stays. - HELD THAT: - The Tribunal noted prior litigation concerning supply of FMC documents, including a High Court order permitting supply subject to charges which had been stayed by the Supreme Court. The appellant's attempt to secure those documents before the Adjudicating Authority in the face of the stay and without disclosing which documents were already obtained was impermissible; the appellant should have sought relief before the appropriate higher court or complied with the procedural mechanism rather than seeking to circumvent the stay through the Adjudicating Authority. Accordingly, the demand for FMC records was not accepted. [Paras 32, 33, 34, 35, 36]Cannot seek FMC documents before Adjudicating Authority so as to circumvent High Court/Supreme Court orders or stays; such request refused.Final Conclusion: The Tribunal dismissed the appeal: the appeal was procedurally defective for failure to obtain the certified order or inspect records as per regulations, the company whose shares were attached was a necessary party and was not impleaded, the application to summon extensive documents was vague and amounted to a fishing exercise likely to delay time bound provisional attachment proceedings, and documents subject to stay in higher court proceedings could not be sought to be circumvented; costs awarded to the respondent.

2014 (3) TMI 1235 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Retracted confession and lack of corroboration defeat penalty where voluntariness is unproven and evidence remains inadequate.
A retracted confessional statement was held unsafe to rely on where it was promptly withdrawn after custody and the surrounding circumstances did not establish voluntariness free from inducement, threat or coercion. The tribunal further held that the alleged contraventions were not proved to the required standard because the material was not independently corroborated, the retracted statement could not by itself sustain liability, and denial of cross-examination weakened the evidentiary foundation. On that basis, the penalty order was not sustainable and was set aside.

Retraction of confessional statement - voluntariness of confession - burden on prosecution to prove voluntariness - use of a retracted confession as corroborative evidence - standard of proof in quasi criminal/FERA proceedings - right to cross examination as facet of fair hearing - remand for fresh hearing on fact and lawRetraction of confessional statement - voluntariness of confession - burden on prosecution to prove voluntariness - use of a retracted confession as corroborative evidence - right to cross examination as facet of fair hearing - Whether the confessional statement relied upon was retracted and, if so, whether it was voluntary and could be relied upon. - HELD THAT: - The Tribunal examined the chronology and surrounding circumstances of the confessional statements and their retraction. It noted that the statement attributed to the appellant was followed by an immediate retraction on the very next day after his release from custody and that the other witness's statements showing incrimination appeared only on a later date and were themselves retracted. The Tribunal observed that nothing incriminating was recovered from the appellant's office during the raid and that a paper slip bearing the appellant's name and telephone number did not connect him to the alleged transaction given his professional role. The Tribunal applied the established principle that the burden lies on the prosecution to prove that a confession is voluntary where it is relied upon; while a retracted confession may be used as corroboration, the court must weigh the pros and cons of confession and retraction and consider attending circumstances including timing, manner and corroborative material. The Enforcement Directorate failed to furnish a plausible explanation or independent evidence to dispel the effect of the retraction or to demonstrate voluntariness; cross examination of the principal witness was not permitted despite demand, undermining the fairness of the process. On these grounds the Tribunal found the confessional material not shown to be voluntary and insufficiently reliable for the purpose of sustaining the adjudication against the appellant. [Paras 9, 10]The Tribunal held that the confessional statement was effectively retracted and that the respondent failed to prove its voluntariness or to place sufficient corroborative evidence to justify reliance on it.Standard of proof in quasi criminal/FERA proceedings - remand for fresh hearing on fact and law - Whether the respondent proved the case to the standard required in proceedings under the FERA (quasi criminal) so as to sustain the penalties imposed on the appellant. - HELD THAT: - The Tribunal considered the remand directions of the High Court to decide afresh on whether the respondent had proved the charges. Applying the applicable standard-that where a proceeding is quasi criminal the authority must establish culpability by reliable evidence and may not rely solely on a retracted confession-the Tribunal found that the Enforcement Directorate's case lacked independent corroboration and that procedural lapses (denial of cross examination, absence of plausible explanation for the confession) fatally weakened the prosecution case. The Tribunal therefore concluded that the respondent had not discharged the burden to prove the alleged contraventions to the requisite standard. [Paras 9, 10]The Tribunal held that the respondent failed to prove the case to the required standard and accordingly set aside the adjudicating order as against the appellant.Final Conclusion: The adjudicating order imposing penalties under the FERA against the appellant is set aside; the appeal is allowed, the pre deposited amount if any shall be refunded, and the matter is disposed of in favour of the appellant.

2014 (2) TMI 1434 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Actual import and secondary evidence under FERA must be properly examined before penalties can be sustained.
Where alleged contravention under FERA depends on proof of actual import, the authority must base findings on reliable evidence and cannot sustain penalties merely because the original exchange control copy of the bill of entry is absent. The record did not conclusively disprove import of the goods, and the decision-maker failed to examine whether photocopies could be admitted as secondary evidence, whether the original had been lost or destroyed without fault, and whether bank records required further verification. The penalty order was therefore set aside and the matter remitted for fresh adjudication with an opportunity to lead further evidence.

Adjudication vitiated for failure to determine primary fact - remand for fresh adjudication - admissibility of secondary evidence - proof of import by alternative evidence - opportunity to produce evidence in adjudicatory proceedings - penalty annulment where contravention not establishedPenalty annulment where contravention not established - adjudication vitiated for failure to determine primary fact - The impugned order imposing penalties was set aside because the Adjudicating Officer did not effectively establish whether the goods corresponding to the remittance were actually imported. - HELD THAT: - The Tribunal found that the Adjudicating Officer, while imposing penalties, failed to conclusively determine the central factual question whether the goods in respect of the remittance of US$43,924.60 were imported. The record showed conflicting material: the appellants asserted original exchange control copy of bill of entry had been submitted, while the bank's communications indicated only a photocopy was on file. The impugned order did not decide whether primary evidence existed or had been lost, nor did it address whether secondary evidence could be admitted. Because the essential fact underpinning the contravention under sections 8(3) and 8(4) could not be said to have been established, the penalties could not stand and the order was reversed. [Paras 10, 11]Impugned adjudicating order reversed and penalties set aside for failure to establish the factual foundation of the contravention.Remand for fresh adjudication - opportunity to produce evidence in adjudicatory proceedings - proof of import by alternative evidence - admissibility of secondary evidence - The matter was remanded to the Adjudicating Officer to determine, after fresh inquiry and opportunity to parties, whether the goods were actually imported and whether secondary evidence is admissible. - HELD THAT: - The Tribunal directed fresh adjudication because the record required examination of the bank's files and any steps taken by the appellants (including any request to the bank to rectify its letter), and because the Adjudicating Officer had not considered whether secondary evidence (true copy/photocopy) was admissible if the original bill of entry was not available. The Tribunal emphasised that the fact of import may be proved by means other than the original exchange control copy of bill of entry and ordered that the Adjudicating Officer record reasons if secondary evidence is relied upon or excluded. The appellants were to be given opportunity to produce further evidence and hearings as necessary. [Paras 10, 11]Remanded to the Adjudicating Officer for fresh adjudication to determine whether the goods were imported, to examine bank records and any rectification request, to rule on admissibility of secondary evidence with reasons, and to give parties opportunity to adduce evidence.Final Conclusion: The Tribunal set aside the impugned penalty order and remanded the case to the Adjudicating Officer for fresh adjudication on whether the goods were actually imported and on the admissibility of secondary evidence, directing that parties be afforded opportunity to produce evidence and that reasons be recorded for any decision on secondary evidence.

2014 (2) TMI 1441 - FOREIGN EXCHANGE REGULATION APPELLATE BOARD, NEW DELHI FEMA

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Appellate remand for unresolved factual controversy where essential remittances issue was never decided on the record.
Where a material factual issue essential to disposal of an appeal has not been adjudicated, an appellate tribunal may remand the matter for fresh findings so that the controversy is properly determined. The text explains that if the record does not show whether the remittances covered by two notices were common, that unresolved fact must be tried by the adjudicating authority with evidence and reasons. It further notes that a quasi-judicial appellate forum has incidental power to remand in aid of natural justice, and that procedural principles consistent with Order 41 CPC may be applied for that limited purpose.

Consolidation of show-cause notices - double jeopardy - power to remand - remand for fresh trial - Appellate Tribunal's incidental powers - principles of natural justiceConsolidation of show-cause notices - double jeopardy - remand for fresh trial - Whether the two remittances mentioned in the first show-cause notice are also included in the second show-cause notice and, if so, whether that fact requires remand for fresh trial by the Adjudicating Authority. - HELD THAT: - The Tribunal observed that the impugned adjudication order does not contain any finding on whether the two remittances appearing in the first show-cause notice are identical with entries in the second show-cause notice which had earlier been adjudicated. The question of identity of the entries is material to the appellant's contention of double jeopardy and to the proper disposal of the appeal. The High Court's earlier prima facie view that identical-dated transactions appear to be covered by both show-cause notices was noted. Relying on the Appellate Tribunal's incidental powers and established precedent recognising an appellate authority's power to remand where the adjudicating authority has not considered material facts, and guided by the principles of natural justice and the Tribunal's power to regulate procedure under the statute, the Tribunal framed the factual issue and held that it is necessary to remit the same to the Deputy Director who passed the impugned order. The Deputy Director is empowered to take additional evidence, if necessary, determine whether the entries are common, record findings with reasons, and return the matter to the Tribunal within the timeframe directed. The Tribunal directed the parties to appear before the Deputy Director and provided procedural directions for the remand, observing that the remand is required because the adjudicating authority omitted to decide this determinative factual question. [Paras 8, 11]Issue framed and remitted to the Deputy Director for trial to determine whether the two remittances in the first show-cause notice are included in the second show-cause notice; Deputy Director to take evidence if necessary, record findings with reasons and return the matter to the Tribunal within the period directed.Final Conclusion: The appeal does not decide the substantive question on the merits; it is remanded to the Deputy Director for determination of whether the two remittances are common to both show-cause notices, with directions for trial, evidence-taking and return of findings to the Tribunal within the stipulated time; no order as to costs.

2013 (12) TMI 1750 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Pre-deposit waiver under FEMA requires prima facie case, hardship and revenue protection; complete waiver was refused on the facts.
Under the second proviso to Section 19(1) of FEMA, waiver of pre-deposit depends on a prima facie case, undue hardship and protection of revenue through suitable conditions. The Tribunal found that the appellants raised arguable points and showed some loss, but the material did not justify complete waiver at the interlocutory stage. As recovery had to be secured, full dispensation was declined and conditional relief was granted by requiring deposit of 30% of the penalty and a bank guarantee for the balance.

Dispensation of pre-deposit of penalty under second proviso to section 19(1) of the Foreign Exchange Management Act, 1999 - prima facie case - undue hardship - balance of convenience - bank guarantee to safeguard realization of penalty - permission for non-agricultural use / conversion sanadDispensation of pre-deposit of penalty under second proviso to section 19(1) of the Foreign Exchange Management Act, 1999 - prima facie case - undue hardship - bank guarantee to safeguard realization of penalty - Application for exemption/waiver of pre-deposit of the penalty imposed by the Adjudicating Authority. - HELD THAT: - The Tribunal examined whether the appellants established a prima facie case and showed that non grant of dispensation would cause undue hardship, and what conditions, if any, should be imposed to safeguard realization of penalty. The Tribunal observed that some submissions of the appellants had force but that a conclusive view on the merits (including the characterisation of the land and the question of required conversion sanction) could not be taken without final adjudication. The affidavit and annexures filed by the appellants showed that the company had suffered losses, but the Tribunal held that those losses were not of such magnitude as to render the pre deposit of 30% of the penalty unduly harsh. In balancing convenience and the need to protect revenue recovery, the Tribunal directed partial pre deposit and accepted bank guarantees for the remainder as a condition for dispensing with full immediate payment, fixing a 45 day timeframe for compliance and warning that non compliance would result in dismissal of the appeal.Appellants directed to deposit 30% of the penalty within 45 days and furnish bank guarantees for the balance to safeguard realization of the penalty; appeal listed for reporting compliance and liable to be dismissed for non compliance.Final Conclusion: Application for complete waiver of pre deposit is refused; conditional dispensation granted subject to deposit of 30% of the penalty and furnishing of bank guarantees for the balance within 45 days to secure recovery, failure of which will lead to dismissal of the appeal.

2013 (11) TMI 1815 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Tribunal Upholds Penalty for FEMA Violation in Agricultural Land Purchase; Director Found Liable, Properties Confiscated.
The Tribunal dismissed appeals Nos. 98-99/2011, affirming the company's contravention of FEMA by purchasing agricultural land with foreign remittances. The penalty of Rs. 12,00,000/- was upheld. Ms. Yulia Yaskova, a director, was held liable under section 42(1) of FEMA, with a Rs. 1,00,000/- penalty. Properties worth Rs. 1,53,17,000/- were confiscated to the Central Government under section 13(2) of FEMA. The Tribunal found no illegality in the Adjudicating Authority's order, and no costs were awarded.

Prohibition on use of Foreign Direct Investment for purchase of agricultural land under the Automatic Route (List B, Annexure A to Schedule I, Regulation 5(1)) - Liability of directors for company contraventions under section 42(1) of FEMA - Confiscation of property for contraventions under section 13(2) of FEMA - Imposition of penalty for FEMA contraventions (quantified by reference to value involved and within statutory limits)Prohibition on use of Foreign Direct Investment for purchase of agricultural land under the Automatic Route (List B, Annexure A to Schedule I, Regulation 5(1)) - Imposition of penalty for FEMA contraventions (quantified by reference to value involved and within statutory limits) - The company utilised foreign remittances obtained under the Automatic Route to purchase three agricultural properties and thereby contravened the FEMA regulations; the penalty imposed on the company is appropriate. - HELD THAT: - The findings in the impugned order, corroborated by admissions of a then-director, the statement of another director and the Collectorate's letter, establish that the three properties purchased were agricultural land and remained so (see the statement of Mr. Francisco X Souza, corroboration by Mr. Abhalesh B. Talkar and Additional Collector-I's communication). Item No.6 of List B of Annexure A to Schedule I, as applicable then, prohibits FDI for agriculture, which includes purchase of agricultural land; utilisation of FDI obtained under the Automatic Route for that purpose therefore amounted to a contravention of the regulations framed under FEMA. Section 13(1) permits imposition of penalty for such contraventions (up to the statutory ceiling), and the penalty imposed on the company falls within those limits and is reasonable. The Tribunal, upon review of the record and submissions, found no reason to interfere with the adjudicating authority's conclusion of contravention or with the quantum of the penalty. [Paras 11, 12]The finding of contravention by the company is affirmed and the penalty imposed on the company is held appropriate.Liability of directors for company contraventions under section 42(1) of FEMA - The appellant director, Ms. Yulia Yaskova, was in charge of and responsible for the conduct of the company's business during the period of contravention and is accordingly liable under section 42(1) of FEMA; the penalty imposed on her is appropriate. - HELD THAT: - The record shows that Ms. Yulia Yaskova was a director during the period when the contravention occurred and the appellants did not dispute her position or produce evidence to show that the contravention occurred without her knowledge or that she exercised all due diligence to prevent it. Section 42(1) deems persons in charge and responsible for company business at the time of contravention to be guilty unless they discharge the statutory exceptions; no such defence was established. The Tribunal therefore sustained the adjudicating authority's finding of personal liability and the attendant penalty. [Paras 13]The director is held guilty under section 42(1) of FEMA and the penalty imposed on her is sustained.Confiscation of property for contraventions under section 13(2) of FEMA - The three properties involved in the contravention were liable to be confiscated to the Central Government under section 13(2) of FEMA and the adjudicating authority's exercise of discretion to confiscate is not interfered with. - HELD THAT: - Section 13(2) gives the Adjudicating Authority discretion to direct confiscation of property in respect of which a contravention has taken place. The Tribunal noted that the properties were the subject-matter of the proven contravention and observed that the adjudicating authority exercised the statutory discretion within its powers. The appellants did not challenge the mannered exercise of that discretion in a manner warranting interference; accordingly, the Tribunal declined to re-examine the confiscation decision. [Paras 14]The confiscation of the three properties under section 13(2) of FEMA is upheld.Final Conclusion: The Tribunal found no illegality in the adjudicating authority's order: the appeals are dismissed, the company and its director are held liable for the contravention, the penalties are sustained and the confiscation of the properties is upheld.

2013 (11) TMI 1814 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Tribunal Waives Pre-Deposit Penalty for Appellant Due to Financial Hardship, Requires Bank Guarantee in 45 Days.
The tribunal granted the appellant's request for a waiver of the pre-deposit penalty under FEMA due to demonstrated undue hardship, as the appellant's financial condition was substantiated. However, to ensure the realization of the penalty, the tribunal required the appellant to provide a bank guarantee equivalent to the penalty amount within 45 days. Failure to comply would result in the dismissal of the appeal. This decision balanced the appellant's financial constraints with the necessity of securing the penalty's enforcement, addressing allegations of involvement in hawala activities.

Dispense with deposit of penalty under second proviso to sub section (1) of section 19 of FEMA - prima facie case - undue hardship - condition to safeguard the realization of penalty - bank guarantee as security to safeguard realization of penaltyPrima facie case - Appellant has established a prima facie case warranting consideration of waiver of pre deposit. - HELD THAT: - The Tribunal, on a cursory glance of the memorandum of appeal and supporting materials, observed that the appellant's contentions-absence of incriminating statements identifying him, alleged coercion in recording his statement, lack of corroboration regarding the named foreign resident, and the claim that seized funds belonged to a relative-raised matters which could give the appellant a 'leg to stand'. The Tribunal did not decide merits but concluded that these grounds suffice at the prima facie stage to entertain relief under the proviso. [Paras 5]Prima facie case is made out for the purpose of considering dispensation of pre deposit.Undue hardship - Deposit of the penalty would cause undue hardship to the appellant. - HELD THAT: - Having examined the affidavit and documentary material filed by the appellant regarding his financial status-unemployed, no movable or immovable property, dependent on charitable support and residing in rented accommodation-the Tribunal applied the established meaning of 'undue hardship' as an excessive hardship that would unreasonably deprive a person of basic necessities. The respondent's enquiry report, based on undisclosed local information, did not effectively rebut the documentary assertions. On this basis the Tribunal concluded that requiring pre deposit would amount to undue hardship. [Paras 6, 7]Pre deposit would cause undue hardship and therefore dispensation is justified.Dispense with deposit of penalty under second proviso to sub section (1) of section 19 of FEMA - condition to safeguard the realization of penalty - bank guarantee as security to safeguard realization of penalty - Tribunal may dispense with pre deposit subject to conditions to safeguard realization of penalty; condition of furnishing a bank guarantee was imposed. - HELD THAT: - The proviso permits dispensing with deposit where undue hardship is shown, but requires imposition of such conditions as may safeguard realization of the penalty. Applying this principle, and having found undue hardship, the Tribunal directed that the appellant be exempted from pre deposit provided he furnishes a bank guarantee for the amount of the penalty within the time stipulated. The Tribunal expressly made failure to furnish the bank guarantee within 45 days a ground for dismissal of the appeal. [Paras 3, 8]Pre deposit dispensed with on condition that the appellant furnishes a bank guarantee for the penalty within 45 days; non compliance will result in dismissal of the appeal.Final Conclusion: The Tribunal, having found a prima facie case and that pre deposit would cause undue hardship, dispensed with the pre deposit of the penalty under the second proviso to section 19(1) of FEMA, subject to the appellant furnishing a bank guarantee for the penalty within 45 days; failure to comply will lead to dismissal of the appeal.

2013 (11) TMI 1822 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Delay condonation and FEMA limitation failed where no bona fide explanation justified a five-year delay in appeal filing.
An appeal filed more than five years after the adjudication order was held barred by limitation, as the governing scheme allowed filing within forty-five days from receipt of the order and further extension only on sufficient cause being shown. The Tribunal found the delay explanation neither satisfactory nor bona fide and treated the appellant as negligent, so condonation was refused and the appeal was not maintainable. It also held that the proceedings fell under the Foreign Exchange Management Act, 1999, because the show-cause notice and adjudication were initiated after the relevant transitional period had expired.

Condonation of delay - Limitation under Section 19(2) of the Foreign Exchange Management Act, 1999 - Onus to prove sufficient cause for delay - Applicability of FEMA vis-a -vis FERA and the sunset provision - Negligence not a ground for condonation - Discretionary power of the Appellate Tribunal to entertain delayed appealsCondonation of delay - Limitation under Section 19(2) of the Foreign Exchange Management Act, 1999 - Onus to prove sufficient cause for delay - Negligence not a ground for condonation - Application for condonation of delay in filing the appeal and whether the appeal should be entertained despite delay - HELD THAT: - The Tribunal held that the provisions of FEMA govern the present proceedings and that every appeal under Section 19(2) must be filed within 45 days of receipt of the adjudication order, subject to the Tribunal's discretion to entertain a delayed appeal on proof of sufficient cause. The appellant asserted non-receipt of the show cause notice and adjudication order and that the appeal was filed within 45 days of alleged receipt on 01.10.2012. The respondent relied on record of service and the adjudicating authority's finding of earlier service and opportunities for hearing. Applying settled principles (as cited from the Supreme Court), the Tribunal observed that condonation is an exception, onus lies on the appellant to prove sufficient cause, and mere negligence or lack of bona fides disentitles a party to relief. In the facts, the appellant failed to furnish acceptable, cogent reasons or credible evidence to establish sufficient cause for the inordinate delay of over five years; the explanation was found to be not bona fide and the delay was held not condonable. The Tribunal therefore exercised its discretion under Section 19(2) against entertaining the delayed appeal. [Paras 7, 8, 9]The application for condonation of delay is dismissed and the appeal is not entertained.Applicability of FEMA vis-a -vis FERA and the sunset provision - Discretionary power of the Appellate Tribunal to entertain delayed appeals - Whether the proceedings fall under FEMA and the legal consequences of that classification for limitation and jurisdiction - HELD THAT: - The Tribunal found that the show cause notice was issued on 03.12.2004 when FEMA was in force and that the Appellate Board under FERA had been abolished with effect from 01.06.2000. The Tribunal construed the saving and transitional provisions, noting that cognizance of offences under the repealed Act (FERA) was subject to a two-year sunset; consequently, matters arising on or after the show cause notice date are governed by FEMA. Having so held, the Tribunal applied Section 19(2) FEMA (45-day limitation with discretionary condonation) and proceeded to assess the delay and sufficiency of cause under that statutory regime. [Paras 7]The Tribunal held FEMA to be the applicable statute and applied Section 19(2) FEMA to govern limitation and the question of condonation.Final Conclusion: The Appellate Tribunal dismissed the application for condonation of delay and, consequently, the appeal against the Adjudication Order dated 28.06.2007; the Tribunal held FEMA to be the applicable law and directed deposit of the penalty within 30 days.

2013 (10) TMI 1597 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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1. ISSUES PRESENTED and CONSIDERED

The primary legal issues considered in this judgment were:

Whether the delay in filing appeals against the order dated 28-02-2011 should be condoned under Section 19(2) of the Foreign Exchange Management Act, 1999 (FEMA).
Whether the appellants provided sufficient cause for the delay in filing the appeals.
Whether the appeals filed beyond the prescribed 45-day limitation period could be entertained by the Tribunal.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Condonation of Delay in Filing Appeals

Relevant Legal Framework and Precedents: The legal framework for condonation of delay is governed by Section 19(2) of FEMA, which allows the Tribunal to entertain an appeal after the expiry of the prescribed period if sufficient cause for the delay is demonstrated. The Tribunal referred to precedents from the Supreme Court, including the cases of Collector, Land Acquisition v. MST Katiji and N. Balakrishnan v. M. Krishnamurthy, which emphasize a liberal approach towards condonation of delay to ensure substantial justice.
Court's Interpretation and Reasoning: The Tribunal analyzed the affidavits submitted by Mr. Vinod Sablok, Director of the company, who was responsible for filing the appeals. The court considered the explanations provided for the delay, including Mr. Sablok's involvement in significant business transactions and his preoccupation with legal and compliance matters related to international listings.
Key Evidence and Findings: The affidavits detailed Mr. Sablok's responsibilities and the time-consuming nature of the transactions he was handling. Supporting documents, such as travel receipts and meeting records, were attached to corroborate the claims of his preoccupation.
Application of Law to Facts: The Tribunal applied the principles from the cited precedents, focusing on whether the delay was due to bona fide reasons and whether it was free from negligence or mala fides. The Tribunal found the explanations for the delay in filing appeals Nos. 116/2011, 117/2011, and 118/2011 to be satisfactory and genuine.
Treatment of Competing Arguments: The respondents argued that the delay was not justified and lacked sufficient cause. However, the Tribunal, considering the precedents, leaned towards a liberal interpretation to allow the appeals to be heard on merits.
Conclusions: The Tribunal concluded that there was sufficient cause for condoning the delay in filing appeals Nos. 116/2011, 117/2011, and 118/2011, but not for appeals Nos. 14/2012 and 15/2012, due to lack of satisfactory explanation and evidence of negligence.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: The Tribunal quoted the Supreme Court's reasoning in Collector, Land Acquisition v. MST Katiji, emphasizing that "the expression 'sufficient cause' employed by the legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice."
Core Principles Established: The judgment reinforced the principle that courts should adopt a liberal approach in condoning delays to advance substantial justice, provided that the delay is not due to negligence or mala fides.
Final Determinations on Each Issue: The Tribunal allowed the condonation of delay for appeals Nos. 116/2011, 117/2011, and 118/2011, enabling them to proceed to hearing. However, it dismissed appeals Nos. 14/2012 and 15/2012 due to insufficient explanation for the delay, reflecting negligence in their filing.

In summary, the Tribunal's decision balanced the need for procedural compliance with the overarching goal of ensuring justice, allowing some appeals to proceed while dismissing others due to inadequate justification for their delayed filing.

Tribunal Allows Delayed Appeals Under FEMA Section 19(2) for Sufficient Cause, Dismisses Others for Lack of Justification.
The Tribunal condoned the delay in filing appeals Nos. 116/2011, 117/2011, and 118/2011 under Section 19(2) of FEMA, finding the appellants provided sufficient cause for the delay. The Tribunal relied on precedents advocating a liberal approach to condonation to ensure substantial justice. However, it dismissed appeals Nos. 14/2012 and 15/2012, citing insufficient explanation and evidence of negligence. This decision reflects a balance between procedural compliance and the pursuit of justice, allowing some appeals to proceed while dismissing others due to inadequate justification for delayed filing.

Condonation of delay - sufficient cause for extension of limitation - liberal and justice oriented approach to limitation - negligence or mala fides disentitling condonation - proviso to section 19(2) of FEMA: appellate time bar and discretionCondonation of delay - sufficient cause for extension of limitation - liberal and justice oriented approach to limitation - Applications for condonation of delay in filing appeals Nos. 116/2011, 117/2011 and 118/2011 were allowed. - HELD THAT: - The Tribunal examined the affidavit of Mr. V.K. Sablok dated 6-6-2013 and concluded that he, as head of the group's legal function, was heavily engaged in time bound, high value overseas transactions and related statutory compliances from March to the last week of August 2011. Those engagements, supported by documentary material and travel evidence, rendered him pre occupied and explain the appellants' failure to file within the 45 day period. Applying the liberal, substantial justice approach to 'sufficient cause' (as expounded in MST Katiji, N. Balakrishnan and allied authorities), the Tribunal found the delay in filing the three appeals to be non deliberate, not attributable to culpable negligence or mala fides, and satisfactorily explained. In consequence the proviso to section 19(2) of FEMA was invoked to admit the late appeals and permit them to be heard on merits. [Paras 5, 9]Delay in appeals Nos. 116/2011, 117/2011 and 118/2011 condoned; those appeals to be listed for hearing.Condonation of delay - negligence or mala fides disentitling condonation - proviso to section 19(2) of FEMA: appellate time bar and discretion - Applications for condonation of delay in filing appeals Nos. 14/2012 and 15/2012 were rejected and those appeals dismissed. - HELD THAT: - The Tribunal found no satisfactory explanation for the further delay in filing appeals Nos. 14/2012 and 15/2012 after three appeals had already been filed on 5-9-2011. Affidavits dated 6-7-2012 rendered on behalf of the company offered that instructions had been given but the appeals were inadvertently not filed; the Tribunal treated the silence in the earlier affidavit and the post hoc explanation as indicia of negligence and a concocted account. Relying on authorities which permit refusal to condone delay where explanation lacks bona fides or reveals gross negligence, the Tribunal held that the applicants had not shown sufficient cause under the proviso to section 19(2) of FEMA and therefore declined to exercise its discretion to admit those two belated appeals. [Paras 6, 8, 9]Delay in appeals Nos. 14/2012 and 15/2012 not condoned; those appeals dismissed and files consigned to record room.Final Conclusion: The Tribunal, applying the substantive justice approach to 'sufficient cause', allowed condonation and admitted appeals Nos. 116/2011, 117/2011 and 118/2011 for hearing, but refused condonation and dismissed appeals Nos. 14/2012 and 15/2012 for lack of satisfactory explanation for the delay.

2013 (10) TMI 1585 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Director liability under foreign exchange law requires proof of day-to-day control and responsibility before a penalty can stand.
Penalty on a director under Section 68(1) of the Foreign Exchange Regulation Act, 1973 cannot be sustained unless there is proof that he was in charge of and responsible for the company's day-to-day business and had knowledge of the contravention. The tribunal found that the materials did not establish that the director managed the relevant transaction or the company's daily affairs, and the burden of proving such responsibility was not discharged. Applying the reasoning already adopted in connected matters involving similarly placed directors, the adjudication order was set aside and the penalty was not upheld.

Liability of director under Section 68 of the Foreign Exchange Regulation Act, 1973 - onus on prosecution to prove director was in charge of day-to-day affairs - due diligence defence of director - prejudice caused by inordinate delay in initiating proceedings - application of precedent of the Delhi High Court to set aside adjudicationLiability of director under Section 68 of the Foreign Exchange Regulation Act, 1973 - onus on prosecution to prove director was in charge of day-to-day affairs - due diligence defence of director - Whether the penalty under Section 68 of the FERA, 1973 could be sustained against the appellant who was not shown to be in charge of the company's day-to-day affairs and who disclaimed knowledge of the impugned transaction. - HELD THAT: - The Tribunal accepted the submission that the initial burden rests on the respondent to prove that the director was responsible for and in charge of the day-to-day functioning of the company before the burden could shift to the director to prove absence of knowledge or exercise of due diligence. The material relied upon by the Adjudicating Authority, including a bank letter, did not establish that the appellant was in charge of the company's affairs or that he participated in or knew of the transaction. Applying the legal principle that the prosecution must discharge the initial burden of proving control/responsibility, the Tribunal found that the respondent failed to prove that the appellant had knowledge of, or was responsible for preventing, the contravention and therefore the penalty could not be sustained against him. [Paras 9, 11]Penalty under Section 68 of FERA, 1973 set aside qua the appellant for failure of the respondent to prove that the appellant was in charge of the company's day-to-day affairs or had knowledge of the transaction.Prejudice caused by inordinate delay in initiating proceedings - application of precedent of the Delhi High Court to set aside adjudication - Whether the inordinate delay in issuing proceedings and the subsequent decision of the Delhi High Court warranted setting aside the Adjudicating Authority's order against the appellant. - HELD THAT: - The Tribunal noted that the Delhi High Court, in decisions disposing related appeals, held that lengthy delay in instituting proceedings (where summons were issued many years after the alleged transaction) caused serious prejudice and that the prosecution had not discharged the burden of proving that the directors were in charge of day-to-day affairs. Finding the facts and issues in the present appeal to be at par with those considered by the High Court, the Tribunal applied that precedent and concluded that the impugned Adjudicating Order must be set aside in respect of the appellant. Consequently, the Tribunal directed return of the pre-deposit. [Paras 10, 11]On the authority of the Delhi High Court decisions and in view of delay-related prejudice and failure of the respondent to discharge its burden, the Adjudicating Authority's order is set aside qua the appellant and the pre-deposited amount is to be returned.Final Conclusion: The Adjudicating Authority's order dated 25.05.2010 is set aside insofar as it relates to the appellant; the Tribunal applied the Delhi High Court's decisions regarding burden of proof and prejudice from inordinate delay, directed return of the pre-deposited amount to the appellant and disposed of the appeal with no order as to costs.

2013 (10) TMI 1584 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Pre-deposit waiver requires undue hardship; partial relief may be conditioned to secure penalty recovery.
Dispensation of pre-deposit requires a showing of undue hardship, and the Tribunal may impose conditions to secure realization of the penalty. Mere assertion of a strong case on merits was insufficient by itself, but the materials justified partial relief. Conditional waiver of pre-deposit was granted only in part, subject to deposit of specified portions of the penalty and furnishing security for the balance, while the request for stay of operation of the impugned order was rejected.

Pre-deposit of penalty - undue hardship - safeguard realization of penalty - prima facie case - stay of operation of adjudicating orderPre-deposit of penalty - undue hardship - safeguard realization of penalty - Dispensation (partial waiver) of pre-deposit of the penalty amount during pendency of the appeals subject to payment of specified percentages and furnishing of security for the balance. - HELD THAT: - The Tribunal applied the settled legal tests on waiver of pre-deposit, emphasising that a claim of "undue hardship" must be established by the applicant and that the Tribunal must impose conditions to safeguard realization of penalty. Without expressing any opinion on merits, the Tribunal granted dispensation from full pre-deposit until final disposal of the appeals but made it conditional: in Appeal No.143/2010 the appellant must pay 50% of the penalty and furnish security for the balance; in Appeal Nos.144/2010 and 145/2010 each appellant must pay 30% of the penalty and furnish security for the balance. Compliance within 30 days was directed and failure to comply would result in dismissal of the appeals for non-compliance; the Tribunal relied on the principles explained in the cited Supreme Court authorities regarding the meanings of "undue" and the need to protect realization of penalty. [Paras 5, 6, 7, 8]Dispensation of full pre-deposit granted conditionally: payment of 50% (Appeal No.143) and 30% (Appeal Nos.144 & 145) within 30 days and furnishing security for the balance to respondent's satisfaction; non-compliance to attract dismissal.Stay of operation of adjudicating order - prima facie case - Application for stay of operation of the impugned adjudicating order was rejected. - HELD THAT: - Although the applicants relied on existence of a prima facie case and argued potential hardship, the Tribunal, while noting the applicants' contentions and the legal authorities on waiver and conditions, declined to grant a stay of the operative order. The Tribunal specifically granted conditional dispensation of pre-deposit but held that no relief in the form of a stay of operation of the impugned order dated 14.05.2010 could be accorded at this stage. [Paras 7, 8]No stay of operation of the adjudicating order; prayer for stay rejected.Final Conclusion: Without expressing any view on merits, the Tribunal conditionally dispensed with full pre-deposit of the penalties by directing specified partial payments and security within 30 days, refused stay of the impugned order, and directed compliance failing which the appeals will be dismissed for non-compliance.

2013 (5) TMI 1071 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Tribunal Waives Pre-Deposit, Condoning Delay for Financial Hardship; Emphasizes Justice Over Technicalities.
The tribunal condoned the delay in filing the appeal and waived the pre-deposit due to the appellant's financial hardship. It emphasized substantial justice over technicalities, setting aside the initial dismissal based on limitation. The case was remanded to the Special Director (Appeals) for reconsideration on its merits.

Condonation of delay - pre-deposit dispensation - remand for fresh adjudication on merits - substantial justice over technicalities - limitation as ground for dismissalCondonation of delay - limitation as ground for dismissal - substantial justice over technicalities - Whether the seven days' delay in filing the appeal should be condoned - HELD THAT: - The Tribunal accepted the appellant's explanation that the delay was caused by circumstances beyond control, including inability to get appeal papers typed, difficulty in making payments and the death of the original appellant, after which his widow was impleaded as legal heir. Relying on the principle that substantial justice must prevail over technicalities, the Tribunal found the reasons sufficient to excuse the short delay and to reverse the earlier order that had dismissed the first appeal on limitation grounds. [Paras 3, 7]Delay of seven days in filing the appeal is condoned and the rejection of the first appeal on limitation is set aside insofar as premised on such delay.Pre-deposit dispensation - extreme hardship - Whether the requirement of pre-deposit should be waived for prosecuting the appeal - HELD THAT: - The Tribunal evaluated the financial inability of the legal heir (appellant's widow) to meet the pre-deposit and noted that the first appeal was dismissed on a technical limitation ground. Viewing the matter as one of extreme hardship to the legal heir and considering the facts and circumstances, the Tribunal exercised its discretion to waive the pre-deposit and admit the appeal for hearing. [Paras 4, 6]Pre-deposit is waived and the appeal is admitted for hearing.Remand for fresh adjudication on merits - Whether the matter should be remanded to the Special Director (Appeals) for decision on merits - HELD THAT: - Having condoned the delay and waived the pre-deposit, the Tribunal held that the Special Director (Appeals) erred in rejecting the first appeal purely on the ground of limitation without adjudicating the merits. The Tribunal set aside that rejection and remanded the matter to the Special Director (Appeals) to decide the first appeal on merits after hearing the appellant. [Paras 7, 8]The impugned order of the Special Director (Appeals) rejecting the first appeal on limitation is set aside and the matter is remanded for fresh decision on merits after hearing the appellant.Final Conclusion: The Tribunal condoned the short delay in filing the appeal, waived the pre-deposit on grounds of extreme hardship, set aside the earlier rejection of the first appeal on limitation, and remanded the matter to the Special Director (Appeals) for fresh adjudication on merits.

2015 (2) TMI 415 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Issues: (i) whether the adjudication stood vitiated for want of opportunity to cross-examine the mahazar witnesses and the officer who recorded the appellant's statement; (ii) whether the earlier appellate order exonerating the appellant could bar fresh adjudication after remand by the High Court; (iii) whether the seizure, statement, and surrounding material established contraventions of Section 9(1)(b), Section 9(1)(d), and Section 64(2) read with Section 9(1)(d) of the Foreign Exchange Regulation Act, 1973; and (iv) whether the penalties and confiscation were justified.

Issue (i): whether the adjudication stood vitiated for want of opportunity to cross-examine the mahazar witnesses and the officer who recorded the appellant's statement

Analysis: The opportunity for cross-examination had been made available during the remand proceedings. The witnesses had been summoned, and the appellant's counsel chose not to pursue cross-examination and instead requested decision on written submissions. In those circumstances, the Tribunal held that the appellant could not later complain that the proceedings were vitiated for denial of cross-examination.

Conclusion: The adjudication was not vitiated on this ground.

Issue (ii): whether the earlier appellate order exonerating the appellant could bar fresh adjudication after remand by the High Court

Analysis: The High Court had remitted the matter for a fresh enquiry and adjudication in accordance with law. A fresh enquiry meant that the earlier adjudication stood set aside and replaced. Consequently, the earlier appellate decision passed against that original adjudication could not survive to restrict the fresh adjudication on remand.

Conclusion: The earlier exoneration did not survive and could not prevent fresh adjudication.

Issue (iii): whether the seizure, statement, and surrounding material established contraventions of Section 9(1)(b), Section 9(1)(d), and Section 64(2) read with Section 9(1)(d) of the Foreign Exchange Regulation Act, 1973

Analysis: The seizure of currency and documents, the explanation contained in the appellant's statement, and the surrounding circumstances supported the allegation of compensatory payments. The appellant failed to prove a lawful source for the seized amount or satisfactorily explain its possession. The Tribunal held that the burden to establish lawful possession remained on the appellant and that the attempt to make payment was also made out.

Conclusion: The contraventions were established.

Issue (iv): whether the penalties and confiscation were justified

Analysis: The statutory power permitted penalties up to five times the amount or value involved in the contravention. In view of the amounts involved and the proved contraventions, the penalties and confiscation were treated as commensurate and warranted.

Conclusion: The penalties and confiscation were upheld.

Final Conclusion: The impugned order was sustained in full, with the appeal failing on all substantive grounds.

Ratio Decidendi: Where an opportunity for cross-examination is available but is consciously not pursued, and the appellant fails to discharge the burden of proving lawful possession of seized currency, the adjudicating authority may rely on the seizure and surrounding material to sustain contraventions and impose penalties and confiscation under FERA.

Cross-examination waiver and failure to prove lawful possession sustained FERA contraventions, penalties, and confiscation
A remand for fresh enquiry nullified the earlier adjudication, so the prior appellate exoneration did not bar renewed proceedings. Where cross-examination was offered during remand but deliberately not pursued, the party could not later claim procedural prejudice on that ground. The seizure of currency and documents, together with the statement and surrounding circumstances, was treated as sufficient to establish contraventions under FERA because the appellant failed to prove lawful possession or a lawful source for the seized amount. On that footing, the penalties and confiscation were sustained as commensurate with the proved contraventions.

Opportunity to cross-examine prosecution/mahazar witnesses - Voluntariness and evidentiary value of statement of accused - Effect of judicial remand for fresh enquiry on earlier appellate exoneration - Validity of panchnama executed at investigating office - Burden of proof on accused to explain source of seized currency - Independence of adjudication proceedings and criminal prosecution - Imposition of penalty commensurate with amount involved under penalty provisionOpportunity to cross-examine prosecution/mahazar witnesses - Whether the adjudication was vitiated for want of opportunity to cross-examine mahazar witnesses and the officer who recorded the voluntary statement. - HELD THAT: - The Adjudicating Authority had issued summons to the mahazar witnesses and the officer who recorded the voluntary statement; on the date fixed some witnesses could not attend for reasons explained and two mahazar witnesses did not communicate. The appellant's counsel was informed of the position and, having been offered an opportunity to reschedule cross-examination, chose not to pursue it and instead filed written submissions. The appellant thereby elected not to seek further cross-examination and the written submissions contain no continuing demand for cross-examination. Given this election, the adjudication cannot be said to be vitiated for want of opportunity to cross-examine. [Paras 9]Appellate challenge on grounds of denial of opportunity to cross-examine is rejected; no vitiation of adjudication proceedings.Effect of judicial remand for fresh enquiry on earlier appellate exoneration - Whether the Adjudicating Authority was precluded from re-adjudicating matters previously exonerated by this Tribunal in view of the High Court's remand for a fresh enquiry. - HELD THAT: - The High Court remitted the matter to the Adjudicating Authority for a "fresh enquiry" and adjudication according to law. "Fresh enquiry" was held to mean conducting the adjudication afresh and setting aside the earlier Adjudication Order. A new adjudication replacing the earlier order renders the Tribunal's earlier order of exoneration ineffective; the earlier appellate order no longer subsists once the matter is remitted and re-adjudicated pursuant to the High Court's directions. [Paras 10]The Adjudicating Authority was competent to re-adjudicate the charges; the Tribunal's earlier exoneration does not operate as bar after remand for fresh enquiry.Validity of panchnama executed at investigating office - Whether the panchnama, drawn at the office of the DRI after apprehension and subsequent search, is invalid because the panchas were not present at the scene of seizure. - HELD THAT: - The appellant did not dispute the sequence of apprehension and search; intelligence had led officers to the spot late at night and for safety the appellant and scooter were taken to the DRI office where witnesses were called and the search carried out. Cross-examination of the enforcement officer supports that the seizure occurred following prior intelligence and a subsequent search at the DRI office produced the seized currency and documents. The fact that the panchnama was drawn in the office does not impair its validity where the seizure and the presence of witnesses at the office for the search are satisfactorily explained. [Paras 11]Panchnama and search conducted at the investigating office are valid and do not vitiate the adjudication.Voluntariness and evidentiary value of statement of accused - Burden of proof on accused to explain source of seized currency - Whether the appellant's statement was involuntary and, in any event, whether the appellant discharged the burden of proving lawful source of the seized currency. - HELD THAT: - The appellant alleged coercion and retraction of his statement, but failed to produce any documents or other proof to show that the seized amounts lawfully belonged to him. The recovered sheets listing receipts and payments formed the basis of the explanation in the statement; the fact of receiving amounts and making payments was not disputed. The burden to prove that the money came into possession lawfully remained on the appellant and he did not meet it; earlier attempts to characterize the money as agricultural income were unsupported by documentary evidence. The appellant's own admissions that the amount would have been handed over to the payee indicate an attempted prohibited payment. [Paras 12]The statement and accompanying recovery corroborate contraventions; appellant failed to discharge burden of proof as to lawful source, and the charge under Section 64(2) read with 9(1)(d) is sustainable, as is confiscation under the relevant provision.Independence of adjudication proceedings and criminal prosecution - Whether discharge of the appellant in criminal proceedings based on the same evidence bars the adjudication or the impugned adjudication order supported by the same evidence should be set aside. - HELD THAT: - The Tribunal followed the Supreme Court's exposition that adjudication under the statute and criminal prosecution are independent processes; a finding in one does not bind the other. Consequently, discharge in criminal proceedings does not preclude adjudication or the imposition of penalty and confiscation under the adjudicatory regime. [Paras 13]Discharge in criminal prosecution does not invalidate the adjudication based on the same evidence; adjudication may proceed independently.Imposition of penalty commensurate with amount involved under penalty provision - Whether the penalties and confiscation imposed by the Adjudicating Authority are excessive or unjustified. - HELD THAT: - The Adjudicating Authority is empowered to impose penalties up to a statutory multiple of the amount involved. Having regard to the quantum of amounts found to be involved in the contraventions and the statutory scheme, the Tribunal found the penalties imposed to be commensurate and within the authority's power. The confiscation order is also upheld on the findings that the seized amount was involved in the contravention and ownership was not satisfactorily explained by the appellant. [Paras 14, 15]Penalties and confiscation are upheld as commensurate with the contraventions; no interference is warranted.Final Conclusion: The impugned adjudication order is upheld; the appellant's appeal is dismissed, the penalties and the confiscation are sustained, and the appellant is directed to deposit the penalty amounts within the time ordered or face recovery in accordance with law.

2015 (2) TMI 460 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Issues: (i) Whether the appellant had taken reasonable steps to realise the export proceeds so as to rebut the presumption of contravention under Section 18(2) and Section 18(3) of the Foreign Exchange Regulation Act, 1973. (ii) Whether joint penalty could be sustained against the partners without proof that the non-realisation was attributable to each of them under Section 68 of the Foreign Exchange Regulation Act, 1973.

Issue (i): Whether the appellant had taken reasonable steps to realise the export proceeds so as to rebut the presumption of contravention under Section 18(2) and Section 18(3) of the Foreign Exchange Regulation Act, 1973.

Analysis: The record showed that the appellant had realised proceeds in respect of the other export documents and that the outstanding amounts remained unpaid because the foreign buyer obtained delivery fraudulently. Correspondence with the authorised dealer, the bank's certificate, and the civil suit proceedings indicated continued efforts to recover the amount. The statutory scheme does not punish non-realisation by itself; liability arises only where reasonable steps are not taken, and the exporter can rebut the presumption by showing steps within the limits of the situation.

Conclusion: The appellant had taken reasonable steps and successfully rebutted the presumption of contravention; the finding of guilt could not stand.

Issue (ii): Whether joint penalty could be sustained against the partners without proof that the non-realisation was attributable to each of them under Section 68 of the Foreign Exchange Regulation Act, 1973.

Analysis: The adjudication order contained no adequate finding showing the role of each partner in the non-realisation of the export proceeds. Section 68 requires proof that the person proceeded against was in charge of and responsible for the conduct of business, or that the contravention occurred with consent, connivance, or neglect. In the absence of such proof, a composite penalty on the partners could not be justified.

Conclusion: The joint penalty on the partners was unsustainable.

Final Conclusion: The adjudication order was set aside in full and the appeal succeeded, with refund of the pre-deposit directed to the appellant.

Ratio Decidendi: In proceedings under FERA, non-realisation of export proceeds is not punishable per se if the exporter proves reasonable steps to realise the amount, and a joint penalty on partners cannot be sustained without specific proof of responsibility or attribution under Section 68.

FERA export proceeds and partner liability turn on proof of reasonable recovery steps and personal attribution of contravention.
Non-realisation of export proceeds under FERA is not punishable per se where the exporter shows reasonable steps to recover the amount; correspondence with the authorised dealer, bank certification, and civil recovery efforts were sufficient to rebut the presumption of contravention, so the finding of guilt could not stand. A joint penalty on partners cannot be sustained without proof that each partner was responsible for the non-realisation or that the contravention occurred with their consent, connivance, or neglect under Section 68; in the absence of such attribution, the composite penalty was unsustainable and the adjudication order was set aside.

Presumption of non-realisation under Section 18(3) of FERA - obligation to take reasonable steps to realise export proceeds - requirement to prove individual responsibility before imposing penalty on partners under Section 68 of FERA - imposition of joint and several penalty - role of authorised dealer and communication with RBI in export realisation enquiries - rebuttal of statutory presumption by evidence of genuine and reasonable effortsRequirement to prove individual responsibility before imposing penalty on partners under Section 68 of FERA - imposition of joint and several penalty - Validity of imposition of joint and several monetary penalty on the firm and its partners without specific findings attributing non-realisation to each partner - HELD THAT: - The Tribunal examined the adjudicating officer's order and found no discussion or findings on the role of the partners that led to non-realisation of the three GRs. Section 68(1) and (2) of FERA require that a partner (director) be shown to have been in charge of and responsible for the conduct of business, or that the contravention occurred with the consent or connivance of, or was attributable to neglect of, the partner, before penal liability can be fastened on him. The impugned order imposed a consolidated joint penalty without proving such individual responsibility or applying the statutory test; consequently the joint penalty on the partners is unsustainable and liable to be quashed. [Paras 6, 7]The joint and several penalty imposed on the partners is quashed for failure to prove individual responsibility as required by Section 68; the portion of the penalty so imposed is set aside.Presumption of non-realisation under Section 18(3) of FERA - obligation to take reasonable steps to realise export proceeds - rebuttal of statutory presumption by evidence of genuine and reasonable efforts - role of authorised dealer and communication with RBI in export realisation enquiries - Whether the appellants took reasonable steps to realise the export proceeds of the three outstanding GRIs and thereby rebutted the presumption under Section 18(3) - HELD THAT: - The Tribunal analysed the documentary record, correspondence with the authorised dealer and RBI, the authorised dealer's certificate confirming fraudulent delivery of goods while retaining original bills of lading, and the suit filed by the appellants against foreign buyers, shipping companies and agents. It held that Section 18 does not make non-realisation per se punishable and that the presumption under Section 18(3) can be rebutted by showing reasonable steps. On the evidence the appellants had taken genuine and reasonable efforts within their limitations - including informing the authorised dealer, initiation of civil proceedings, and communication involving the authorised dealer and RBI - so as to rebut the statutory presumption. The adjudicating officer had erred in rejecting the appellants' evidence and in holding them guilty for not taking reasonable steps. [Paras 12, 13, 14, 15, 16]The finding of guilt for not taking reasonable steps to realise the export proceeds is reversed; the adjudicating officer's conclusion is set aside and the appeal is allowed on merits.Final Conclusion: The appeal is allowed: the adjudication order imposing penalty is quashed and set aside; the adjudicating officer's findings on failure to take reasonable steps are reversed, the joint penalty on partners is unsustainable for lack of findings under Section 68, and the pre-deposited amount is to be returned to the appellant.

2012 (4) TMI 561 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI FEMA

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Review jurisdiction limited to patent error on the record; merits cannot be reopened without an apparent mistake.
Review under the repealed Foreign Exchange Regulation Act, 1973 remained governed by the saving provisions in the Foreign Exchange Management Act, 1999 and the General Clauses Act, 1897, preserving the earlier rights, liabilities and remedies. The Tribunal held that review jurisdiction is confined to correction of a patent error apparent on the face of the record or a clerical mistake, and cannot be used to reargue the merits or function as an appeal in disguise. As the applicant sought a fresh consideration of factual and legal issues without showing any apparent error in the earlier order, no ground for review was established and the petition was rejected.

Power of review - error apparent on the face of the record - procedural review - saving clause - continuance of rights and liabilities under repealed statute - procedure and substantive law under repealed ActPower of review - error apparent on the face of the record - procedural review - procedure and substantive law under repealed Act - Maintainability of a review petition against a Tribunal's merits order passed under the Foreign Exchange Regulation Act, 1973. - HELD THAT: - The Tribunal held that no substantive right to review is available under the repealed Foreign Exchange Regulation Act, 1973 and that the Appellate Tribunal constituted under the Foreign Exchange Management Act, 1999 cannot import a fresh substantive right of review from the successor statute. The court analysed principles governing repeal and savings and observed that Section 49(4) of the FEM Act, 1999 and Section 6 of the General Clauses Act preserve rights, liabilities and legal consequences arising under the repealed Act; accordingly, proceedings and remedies arising under FERA, 1973 are to be governed by that Act as it stood when the cause of action arose. The Tribunal emphasised the limited scope of review - confined to correction of clerical mistakes or patent errors apparent on the face of the record - and reiterated that review is not an appeal in disguise and cannot be used to re argue merits. While numerous factual and evidentiary complaints were raised concerning reliance on certain statements and documents, the Tribunal found that, even if shortcomings were alleged, the statute does not confer a general substantive right to reopen merits by way of review; procedural review for patent procedural defects remains available but was not shown to arise here. Applying these principles, the Tribunal concluded the review petition challenging its earlier merits order under FERA, 1973 was not maintainable and the prayer for review must be rejected. [Paras 7, 9, 11, 21]Review petition dismissed; no review on merits available under FERA, 1973 and the petition is not maintainable.Final Conclusion: The review petition challenging the Tribunal's earlier merits order under the Foreign Exchange Regulation Act, 1973 is rejected and dismissed on the ground that no substantive right of review under the repealed Act is available for rehearing of merits; only limited review for clerical or patent errors is permissible.

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