Foreign exchange adjudication under repealed law survived, but unauthenticated foreign documents could not sustain adverse findings.

Foreign exchange proceedings under the repealed Foreign Exchange Regulation Act, 1973 were not rendered invalid where the alleged contraventions arose from 1997-98 transactions and the notices were treated as a continuation of the earlier cause. However, overseas documents, reports and statements relied on in adjudication had to satisfy the statutory authentication requirements under Section 72 and the prescribed rules. In the absence of lawful authentication, such foreign material could not be treated as substantive evidence to prove undervaluation or foreign exchange violation. The adjudication and appellate orders were set aside and the appeals succeeded, with consequential refund, if any, in accordance with law.

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Issues: (i) Whether proceedings under the Foreign Exchange Regulation Act, 1973 could be sustained after its repeal on the facts of the case. (ii) Whether foreign documents and reports relied upon in adjudication were admissible and could be treated as substantive evidence without authentication under the prescribed procedure.

Issue (i): Whether proceedings under the Foreign Exchange Regulation Act, 1973 could be sustained after its repeal on the facts of the case.

Analysis: The imports and the alleged foreign exchange violations related to transactions of 1997-98, when the Foreign Exchange Regulation Act, 1973 was in force. The show cause notices under the Customs Act formed the factual basis for the later foreign exchange proceedings. The cause of action did not arise only after repeal, and the notices issued during the sunset period were treated as a continuation of the earlier alleged contravention.

Conclusion: The foreign exchange proceedings were not invalid merely because the Act had been repealed.

Issue (ii): Whether foreign documents and reports relied upon in adjudication were admissible and could be treated as substantive evidence without authentication under the prescribed procedure.

Analysis: The documents obtained from abroad were not authenticated in the manner required by Section 72 of the Foreign Exchange Regulation Act, 1973 read with the prescribed rules. The adjudicating authority also relied on statements and overseas reports without establishing that they amounted to admissible proof of contravention. In the absence of lawful authentication, the foreign documents could not be used as substantive evidence to sustain the findings of undervaluation and foreign exchange violation.

Conclusion: The documents and reports could not validly support the adverse findings against the appellants.

Final Conclusion: The adjudication orders and the appellate tribunal's order were set aside and the appeals succeeded, with consequential refund of amounts paid, if any, in accordance with law.

Ratio Decidendi: Foreign exchange adjudication based on overseas material must satisfy the statutory authentication requirements, and repeal of the parent statute does not nullify proceedings founded on pre-repeal transactions where the alleged contravention arose during the currency of the repealed law.

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