2013 (11) TMI 1822 - AT - FEMA

Tribunal Dismisses Appeal as Time-Barred Under FEMA 1999; Upholds Penalty for Lack of Import Documentation Evidence.

Sanjay Kothari Versus Deputy Director, Directorate of Enforcement, New Delhi

Sanjay Kothari Versus Deputy Director, Directorate of Enforcement, New Delhi - TMI 1. ISSUES PRESENTED and CONSIDEREDThe legal judgment presented revolves around the following core legal questions:Whether the appeal filed by the applicant/appellant against the Adjudication Order dated 28.06.2007 is time-barred under the provisions of the Foreign Exchange Management Act, 1999 (FEMA).Whether there was a sufficient cause to condone the delay of more than five years in filing the appeal.Whether the applicant/appellant received the Show Cause Notice (SCN) and the Adjudication Order, and whether the service of these documents was duly acknowledged.Whether the penalty imposed for contraventions of FEMA provisions was justified based on the failure to submit documentary evidence of import into India.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Timeliness of the AppealLegal Framework and Precedents: Under Section 19(2) of FEMA, an appeal must be filed within 45 days from the receipt of the order by the aggrieved party. The Appellate Tribunal may entertain an appeal after this period if it is satisfied with the explanation for the delay.Court's Interpretation and Reasoning: The Tribunal emphasized that the applicant/appellant failed to file the appeal within the prescribed period and that the delay was over five years and three months.Key Evidence and Findings: The applicant/appellant argued that the Adjudication Order was received on 01.10.2012, and the appeal was filed within 45 days thereafter. However, the Tribunal noted the acknowledgment of receipt of the SCN and the applicant's appearance before the Adjudicating Authority in 2006.Application of Law to Facts: The Tribunal applied the statutory period for filing an appeal and found that the applicant/appellant did not provide sufficient cause for the delay.Treatment of Competing Arguments: The respondent opposed the condonation of delay, arguing that the applicant/appellant was aware of the proceedings and had acknowledged receipt of the SCN.Conclusions: The Tribunal concluded that the appeal was time-barred and that the applicant/appellant did not provide a credible explanation for the delay.Issue 2: Receipt of Show Cause Notice and Adjudication OrderLegal Framework and Precedents: The burden of proof lies on the applicant/appellant to demonstrate non-receipt of the SCN and Adjudication Order.Court's Interpretation and Reasoning: The Tribunal found that the applicant/appellant had received the SCN and had appeared before the Adjudicating Authority, acknowledging the proceedings.Key Evidence and Findings: The respondent provided evidence of dispatch and acknowledgment of the SCN, which the Tribunal found credible.Application of Law to Facts: The Tribunal determined that the service of the SCN and Adjudication Order was duly executed.Treatment of Competing Arguments: The applicant/appellant's claim of non-receipt was deemed unconvincing in light of the evidence presented by the respondent.Conclusions: The Tribunal held that the applicant/appellant had received the necessary documents and was aware of the proceedings.Issue 3: Justification of PenaltyLegal Framework and Precedents: The penalty was imposed under Sections 10(5) and 10(6) of FEMA, 1999, read with Regulation 6(1) of the Foreign Exchange Management (Realisation, Repatriation & Surrender of Foreign Exchange) Regulations, 2000.Court's Interpretation and Reasoning: The Tribunal noted the applicant/appellant's failure to provide documentary evidence of import, which justified the penalty.Key Evidence and Findings: The applicant/appellant did not submit the required import documentation, leading to the contravention of FEMA provisions.Application of Law to Facts: The Tribunal applied the relevant FEMA provisions and upheld the penalty based on the applicant/appellant's non-compliance.Treatment of Competing Arguments: The applicant/appellant's arguments were not sufficient to overturn the penalty decision.Conclusions: The Tribunal upheld the penalty as justified under the circumstances.3. SIGNIFICANT HOLDINGSThe Tribunal held that 'the applicant/appellant is thoroughly negligent in filing the present appeal & it would be legitimate for me not to condone the delay in view of the proviso to sub-section (2) of section 19 of FEMA, 1999.'The core principle established is that the burden of proving sufficient cause for delay lies with the applicant/appellant, and failure to do so results in dismissal of the appeal.The final determination was that the appeal was dismissed due to the inordinate delay and lack of sufficient cause for condonation. The applicant/appellant was directed to deposit the penalty amount within 30 days.The Tribunal's decision underscores the importance of adhering to statutory timelines and the necessity of providing credible explanations for any delays in legal proceedings.