2006 (4) TMI 587 - AT - FEMA

Tribunal Affirms Penalty, Criticizes Routine Petitions by Enforcement Directorate Under Foreign Exchange Regulation Act.

Enforcement Directorate Versus Sangeeta Granites Ltd.

The Appellate Tribunal dismissed the Enforcement Directorate's revision petitions, affirming the adjudicating authority's decision to impose a penalty on ... - Issues: Jurisdiction of Appellate Tribunal under Foreign Exchange Regulation Act, 1973; Evaluation of evidence in adjudication order; Revisional powers of the TribunalAnalysis:1. The Enforcement Directorate filed revision petitions challenging an adjudication order imposing a penalty on the appellant company for not repatriating outstanding proceeds of 3 GRIs. The Tribunal's jurisdiction was invoked under section 52(4) of the Foreign Exchange Regulation Act, 1973. The petitioner argued that the acceptance of evidence in the form of letters from private agencies and solicitors by the adjudicating authority was incorrect. The Tribunal heard arguments from both parties and reviewed written submissions from the respondents.2. The revision petition contended that the evidence provided by the respondents, such as a letter from a private agency regarding the bankruptcy of a foreign buyer, should not have been accepted as conclusive proof. It was argued that the adjudicating authority erred in accepting such evidence without demanding better proof. Additionally, the absence of write-off documentation to the RBI was highlighted as a reason for disputing the absolution of guilt. However, the Tribunal emphasized that its revisional powers are limited and do not extend to re-evaluating evidence unless the adjudicating authority's conclusions are shown to be totally wrong and illegal.3. The Enforcement Directorate argued that the letters from the private agency and solicitor should be considered interim proof and subject to proper evaluation. The adjudicating authority had accepted these letters as evidence of the appellant taking reasonable steps for repatriation, with no contradictory evidence provided by the Enforcement Directorate. The Tribunal concluded that the Enforcement Directorate's contentions lacked merit, as the letters were accepted as proper proof by the adjudicating authority.4. The Tribunal reiterated that its role in exercising revisional powers is to ensure proper procedure is followed for justice, not to re-evaluate facts. The findings and conclusions of the adjudicating authority, based on factual appreciation, cannot be deemed arbitrary or perverse. The Tribunal cited a previous judgment to support the limited scope of revisional jurisdiction and emphasized that revision petitions should not be filed routinely without legal grounds.5. Ultimately, the Tribunal dismissed the revision petitions, noting the lack of legal grounds for invoking revisional powers. It criticized the Enforcement Directorate for frequently filing revision petitions without due consideration, leading to a significant backlog of cases. The Tribunal highlighted the importance of invoking revisional powers sparingly and with legal merit, rather than as a routine step.