TaxTMI 
TaxTMI 
2011 (4) TMI 489
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....ection (2) to Section 19 of FEMA. 3. M/s. Tirumalai Chemicals Limited (in short 'the Company') had imported various consignments of benezene, orthoxalene etc. for home consumption. For the said purpose, the Company had opened Letters of Credit bearing No. MLCO 4359096 and No. 529/960487 on 28-9-96 and 7-8-96 respectively on their bankers; ICICI Bank and Standard Chartered Bank (authorized dealers). By letters dated 7-12-96 and 18-1-97 Exchange Control Copies of bills of entry (in short, ECC on bills of entry) in relation to those imports were forwarded by the Company to the above mentioned Banks. As per the provisions of Exchange Control Manual (in short ECM), the authorized dealers had to submit the ECC-bills of entry submitted by the importers (the Company) to the Reserve Bank of India (in short RBI). The Company was under the bona fide impression that the documents submitted by it were forwarded by the authorized dealers to the RBI and that the RBI in turn had given due intimation to the Enforcement Directorate. The Company on 22-4-04 received a telephonic communication from the office of the 3rd respondent viz., Directorate of Enforcement, stating that it had passed var....
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.... of M/s Tirumalai Chemicals Ltd., which was forwarded to you by us. In this connection we advise that, based on the documents and evidence submitted by authorized dealer, we have deleted the entries from our records and regularized the transactions at our end as under :- (i) ICICI Bank confirmed that they had received EC copies of Bill of Entry in respect of the transactions reported at Sr. No. 40 and Sr. No. 1 of their BEF Statement referred to above and the entry at Sr. No. 28 of their BEF Statement was a repetition of entry at Sr. No. 40 of the same statement. (ii) Standard Chartered Bank has also confirmed to us that the relative EC copy of the Bill of Entry in respect of the transaction reported in their BEF Statement was received by them....". 5. The Company had also sent a letter dated 17-5-04 to the Enforcement Directorate stating that it was not due to the mistake of the Company that the ECC of bills of entry were not forwarded to the Directorate of Enforcement in time, but due to the mistake of the authorized dealer (Bank). RBI had subsequently carried out necessary corrections and deleted the entries fro....
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.... for period of limitation for filing that appeal. The Parliament has also provided that delay beyond a certain period cannot be condoned by the Tribunal/Appellate authority. The Petitioners have allowed that remedy of appeal to be barred, therefore, now to entertain these petitions as petitions against the original order would amount to permitting the Petitioners to frustrate the scheme of the Legislation. The scheme of the statute is that a challenge to the original order is to be raised by an appeal which is to be filed within a particular period. The extra ordinary jurisdiction of this court under the Constitution cannot be permitted to be used by the Petitioners, who have allowed their ordinary remedy to be barred. Petitions are, therefore, rejected." 9. Mr. Harish Salve, learned Senior Counsel appearing on behalf of the appellants submitted that the authorized dealer (Bank) had owned up their mistake and had informed the RBI accordingly and hence there was no reason to penalize the Company for no fault of it. Learned Counsel also submitted that the Tribunal had committed a mistake in holding that it had no power to condone the delay beyond 90 days. He also submitted th....
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....ion, it is necessary to examine the scope and ambit of Section 52 of FERA, Section 19, 49 of FEMA and Section 6 of the General Clauses Act, 1897. 12. FERA was enacted to consolidate and amend the law relating to certain payments dealing in foreign exchange and securities, transactions indirectly affecting the foreign exchange and import and export and import of currency, for conservation of foreign exchange resources of the country and proper utilization thereof in the interest of economic development of the country. Sections 50 and 51 of FERA were the penal provisions which empowered the authority to impose penalty on persons who had contravened some of the provisions of the Act. An appeal was provided under FERA against the order of adjudication before the Foreign Exchange Regulation Appellate Board (in short the 'Board') under Section 52 of that Act within a period of 45 days from the date on which the order was served on the person committing the contravention. The Board was also empowered to entertain any appeal after the expiry of the said period of 45 days but not after 90 days from the date on which the order was served on the person if it was satisfied that the per....
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.... the Appellate Tribunal. Sub-section (2) of Section 19 says that every appeal under sub-section (1) shall be filed within a period of 45 days from the date on which the copy of the order made by the adjudicating authority or the Special Director (Appeals) is received by the aggrieved person. The Appellate Tribunal is also empowered to entertain the appeals filed after the expiry of the said period of 45 days if it is satisfied that there was sufficient cause for not filing the appeal within that period. Law is well settled that the manner in which the appeal has to be filed, its form and the period within which the same has to be filed are matters of procedure, while the right conferred on a party to file an appeal is a substantive right. The question is, while dealing with a belated appeal under Section 19(2) of FEMA, the application for condonation of delay has to be dealt with under the first proviso to sub-section (2) of Section 52 of FERA or under the proviso to sub-section (2) of Section 19 of FEMA. For answering that question it is necessary to examine the law on the point. Substantive and Procedural Law : 14. Substantive law refers to body of rules that creates, ....
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....bstantive right. The procedure for filing an appeal under sub-section (2) of Section 19 as also the proviso to sub-section (2) of Section 19 conferring power on the Tribunal to condone delay in filing the appeal if sufficient cause is shown, are procedural rights. 18. We have already indicated that the proviso to sub-section (2) of Section 19 operates retrospectively, but the question is in that process, whether it impairs or takes away any accrued right, to plead a time bar and on facts whether the Company has lost its right of appeal to the Tribunal under FEMA. Law of Limitation 19. Law of limitation is generally regarded as procedural and its object is not to create any right but to prescribe periods within which legal proceedings be instituted for enforcement of rights which exist under substantive law. On expiry of the period of limitation, the right to sue comes to an end and if a particular right of action had become time-barred under the earlier statute of limitation the right is not revived by the provision of the latest statute. Statutes of limitation are thus retrospective insofar as they apply to all legal proceedings brought after their operation for....
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....ion unless a contrary intention is discernible from the statute. Therefore, unless the language clearly manifests in express terms or by necessary implication, a contrary intention a statute divesting vested rights is to be construed as prospective. A statute, merely procedural is to be construed as retrospective and a statute while procedural in nature affects vested rights adversely is to be construed as prospective. The manner of filing an appeal, under sub-section (2) of Section 19 of FEMA and the time within which such an appeal has to be preferred and the power conferred on the Tribunal to condone delay under the proviso to sub-section (2) of Section 19 are matters of procedure and act retrospectively, so as to cover causes of action which arose under FERA. Since the appeal was filed under FEMA with an application for condonation of delay such an appeal has to be considered by the Tribunal under the proviso to sub-section (2) of Section 19 FEMA and if the Company shows sufficient cause for not filing the appeal in time then the Tribunal can condone the delay and entertain the appeal, especially when there is no accrued right to the respondent to plead a time bar. The legal po....
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....rument executed or any direction given under the Act hereby repealed shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act; (b) any appeal preferred to the Appellate Board under sub-section (2) of Section 52 of the repealed Act but not disposed of before the commencement of this Act shall stand transferred to and shall be disposed of by the Appellate Tribunal constituted under this act; (c) every appeal from any decision or order of the Appellate Board under sub-section (3) or sub-section (4) of Section 52 of the repealed Act shall, if not filed before the commencement of this act, be filed before the High Court within a period of sixty days of such commencement; Provided that the High Court may entertain such appeal after the expiry of the said period of sixty days if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period. (6) save as otherwise provided in sub-section (3), the mention of particular matters in sub-sections (2), (4) and (5) shall not be he....
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....ed by the provisions of the repealed Act as if that Act had not been repealed. 22. Sub-section (5) of Section 49 of FEMA consists of three clauses (a), (b) and (c). Clause (a) states that anything done or any action taken or purported to have been done or taken including any rule, notification, inspection, order or notice made or issued or any appointment, confirmation or declaration made or any license, permission, authorization or exemption granted or any document or instrument executed under the repealed act i.e. FERA to the extent they are not inconsistent with the provisions of this Act, are deemed to be done or taken under the corresponding provisions of this Act. The said provision has the effect of incorporating or making a general declaration that the existing rules, notifications, declarations, authorization and exemptions granted under FERA will continue to apply in spite of repeal of FERA and after enactment of FEMA as long as they are not in consistent with FEMA. Clause (b) of sub-section (5) of Section 49 states that any appeal preferred before the Appellate Board under sub-section (2) of Section 52 of FERA but not disposed of before the commencement of this A....
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....IR 1969 SC 701; Gajraj Singh & Ors. v. State Transport Appellate Tribunal & Ors. (1997) 1 SCC 650; Gammon India Ltd. v. Special Chief Secretary & Ors. (2006) 3 SCC 354. 25. The appellate Board under FERA, it may be noted stood dissolved and ceased to function when FEMA was enacted. Therefore, any appeal against the order of the adjudicating officer made under FERA, after FEMA came into force, had to be filed before the Appellate Tribunal constituted under FEMA and not to the Appellate Board under FERA. Section 52 of FERA stipulates the limitation for an appeal against the orders of the adjudicating officer to the Appellate Board. It provides the period of limitation as 45 days but the Board may entertain an appeal after the expiry of 45 days but not beyond 90 days. Under FEMA, an appeal lies to the Appellate Tribunal constituted under that Act and Section 19(2) provides that every appeal shall be filed within 45 days from the date on which a copy of the order of the adjudicating authority is received. The appellate is however empowered to entertain appeals filed after the expiry of 45 days if it is satisfied that there was sufficient cause for the delay in filing the appeal....