TaxTMI 
TaxTMI 
2013 (2) TMI 396
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.... Bombay mentioned earlier. It is, therefore, unnecessary to recount the facts over again except to the extent it is absolutely necessary for disposal of these appeals. 3. Appellant-Telestar Travels Private Ltd. carries on a travel agency and specialises in booking of tickets for crew members working on ships. Most of the shipping companies are based abroad with their representatives located in Mumbai who would issue instructions to the appellant-company to arrange air passage for the crew from Bombay and other places in India to particular ports abroad. The company would then take steps to have tickets issued on the basis of such instructions for different destinations. The appellant's case is that the travel agents in U.K. had of late started offering cheap fares for seaman/crew travelling to join the ships. In order to benefit from such low fare tickets the shipping companies are said to have desired that the benefit of such low fare tickets be organized for them by the appellant. In order to make that possible the appellant-company claims to have approached M/s Clyde Travels Ltd. (CTL) in Glasgow (U.K.) for getting such cheap seaman tickets. According to this arrangement, the C....
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....llants. The appellants filed their replies in which they denied the allegations that Bountiful Ltd. was a paper company or that the same was being controlled from India by the appellants. By their letter dated 23rd September, 1997 the appellants sought to cross-examine Mr. Livingstone of CLD and the Indian High Commission officials in London who had met him. He also sought to cross-examine Miss Anita Chotrani and Mr. Deepak Raut upon whose depositions Directorate of Enforcement sought to place reliance in support of its case. The Adjudicating Authority eventually passed an order on 29th March, 2001 holding the appellants guilty of violation of provisions of Sections 8 and 14 of FERA inasmuch the appellants had received payments from various persons on account of tickets booked by them for US $ 846116.14 and GB Pounds 156943.16 which were credited to the account No.10975 at Geneva and which they failed to surrender to an authorised dealer in foreign exchange in India within three months of becoming the owner or holder thereof without the general permission of the RBI as required under Section 14 of FERA. The Adjudicating Authority has further held the appellants guilty of transferri....
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....atter was finally argued before the Adjudicating Authority but which hearing ought to have been repeated as the pronouncement of the order by the Authority had been delayed. Reliance in support of the submission was placed by Mr. Diwan upon the decisions of this Court in Bhagwandas Fatechand Daswani and Ors. v. HPA International and Ors. (2000) 2 SCC 13, Kanhaiyalal and Ors. v. Anupkumar and Ors. (2003) 1 SCC 430 and Anil Rai v. State of Bihar (2001) 7 SCC 318. 6. On behalf of respondent, it was per contra argued by Mr. P.P. Malhotra, learned Additional Solicitor General, that the order passed by the Adjudicating Authority was fully compliant with the provisions of Section 51 read with Section 30 of the Rules under FERA and could not be treated as an ex parte order by any stretch of reasoning. He also contended that mere delay in the pronouncement of adjudication order was not enough to justify setting aside of the order if the same was otherwise found to be legally valid and unacceptable. No prejudice was, at any rate, caused to the appellants by the delay, according to Mr. Malhotra, who placed reliance on the decision of this Court in Ram Bali v. State of U.P. (2004) 10 SCC 598 ....
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....e documents which they have now placed before this Court for consideration. It is further admitted that no application for permission to produce these documents was filed by them before the Adjudicating Authority no matter they could have done so if they really indeed needed to place reliance on such documents. Mr. Malhotra was, in our view, justified in contending that the hearing had been concluded by the Adjudicating Authority in keeping with the requirement of Section 51 and Rule 3 of the Adjudication Rules under FERA. The first limb of the contention urged by Mr. Diwan, therefore, fails and is hereby rejected. 8. It was next argued by Mr. Diwan, that the Adjudicating Authority had placed reliance upon the retracted statements of the appellants while holding that Bountiful Ltd. was a paper company and that its financial control lay in their hands, so that receipt and appropriation of the foreign exchange by that device was a clear violation of the provisions of FERA. 9. A reading of the order passed by the Adjudicating Authority would show that the appellants had in their responses to the show cause notice and the addendum to the same specifically raised a contention that th....
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..../residential premises of the notices and contain those details which they wished to state. The retraction subsequently filed by the notices S/Shri Rajesh Desai and Sujeet Desai are merely an afterthought to escape from the clutches of law and I reject them in toto." 10. In the appeal filed by the appellants before the FERA Appellate Tribunal also a contention as to the voluntary nature of the statements made by the appellants was urged on their behalf but rejected by the Tribunal in the following words: "It is argued that the statements given by Shri Arun Desai, Rajesh Desai and Sujeet Desai were not the voluntary ones which were dictated by the Enforcement Officers and were obtained under threats and coercion which were subsequently retracted and that there was no corroborative material to support them. But we find no force in these arguments because the appellants, in their statements, had explained in detail the functioning of M/s. Telstar Travels, which was engaged in booking of domestic and international air tickets for crew members joining foreign ships, the need for entering into an agreement with agents abroad, the mode of payments received and the commission earne....
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....on it for any purpose and if the statement appears to have been obtained by any inducement, threat, coercion or by any improper means that statement must be rejected brevi manu. At the same time, it is to be noted that merely because a statement is retracted, it cannot be recorded as involuntary or unlawfully obtained. It is only for the maker of the statement who alleges inducement, threat, promise etc. to establish that such improper means has been adopted. However, even if the maker of the statement fails to establish his allegations of inducement, threat etc. against the officer who recorded the statement, the authority while acting on the inculpatory statement of the maker is not completely relieved of his obligations in at least subjectively applying its mind to the subsequent retraction to hold that the inculpatory statement was not extorted. It thus boils down that the authority or any Court intending to act upon the inculpatory statement as a voluntary one should apply its mind to the retraction and reject the same in writing. It is only on this principle of law, this Court in several decisions has ruled that even in passing a detention order on the basis of an inculpatory....
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....m London informing that US $ 33884 has been credited on 14.11.94 to the account of Bountiful. Similarly page Nos.30 & 34 of file marked 'I', contain instructions to transfer certain amounts to the account of Clyde Travels Ltd. Glasgow. When Shri Rajesh Desai was questioned as to how could issue such instructions in respect of the account of Bountiful Ltd., he clearly explained in his statement dated 24.8.95 that the account No.10975 of Bountiful at Geneva was an account of a paper company held by him for the sole purpose of receiving and making payments in respect of seamen airline tickets which were obtained at the very cheap rates from M/s Clyde Travels, Glasgow, with whom M/s Telstar had a tie up since August 1994; that Shri Sirish Shah was a Chartered Accountant in London, who was known to both M/s. Clyde Travels and Telstar; that the said Shri Sirish Shah was used by him for giving instructions to the bank for operating the account of Bountiful Ltd. At Switzerland that the last balance for the said account of Bountiful was US$ 98761.70. Shri Rajesh Desai further explained the page Nos. at 111 to 125 of file marked 'E' seized from the office of M/s. Telstar Travels. P. Ltd., in....
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.... was made on the instructions of appellant-Shri Rajesh Desai, which the latter explained to be kickbacks paid to overseas shipping company for giving ticketing business to Telestar. 15. Suffice it to say that there may be sufficient evidence on record for the Adjudicating Authority and the Tribunal to hold that the appellants were indeed guilty of violating the provisions of FERA that called for imposition of suitable penalty against them. It was not the case of the appellants that the findings were unsupported by any evidence nor was it their case that the statements made by the appellants were un-corroborated by any independent evidence documentary or otherwise. In the circumstances, therefore, we see no reason to interfere with the concurrent findings of fact on the question whether Bountiful was or was not a paper company controlled by the appellants from India. 16. That brings us to the third limb of attack mounted by the appellants against the impugned orders. It was argued by Mr. Diwan that while holding that Bountiful Ltd. was a paper Company and was being controlled and operated from India by the appellants through Shri Sirish Shah, the Adjudicating Authority had relied ....
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....n. Such refusal may in turn amount to violation of the rule of a fair hearing and opportunity implicit in any adjudicatory process, affecting the right of the citizen. The question, however, is whether failure to permit the party to cross examine has resulted in any prejudice so as to call for reversal of the orders and a de novo enquiry into the matter. The answer to that question would depend upon the facts and circumstances of each case. For instance, a similar plea raised in Surjeet Singh Chhabra v. Union of India and Ors. (1997) 1 SCC 508 before this Court did not cut much ice, as this Court felt that cross examination of the witness would make no material difference in the facts and circumstances of that case. The Court observed: "3. It is true that the petitioner had confessed that he purchased the gold and had brought it. He admitted that he purchased the gold and converted it as a kara. In this situation, bringing the gold without permission of the authority is in contravention of the Customs Duty Act and also FERA. When the petitioner seeks for cross-examination of the witnesses who have said that the recovery was made from the petitioner, necessarily an opportuni....
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....rt reversed this order on appeal stating that the burden of proving lawful importation had shifted upon the firm after the Customs Authorities had informed them of the results of their enquiries. In appeal before this Court, one of the four arguments advanced on behalf of the appellant was that the adjudicating officer had breached the principles of natural justice by denying them the opportunity to cross-examine the persons from whom enquiries were made by the Customs Authorities. The Supreme Court rejected this argument stating as follows: "12. We may first deal with the question of breach of natural justice. On the material on record, in our opinion, there has been no such breach. In the show-cause notice issued on August 21, 1961, all the material on which the Customs Authorities have relied was set out and it was then for the appellant to give a suitable explanation. The complaint of the appellant now is that all the persons from whom enquiries were alleged to have been made by the authorities should have been produced to enable it to cross-examine them. In our-opinion, the principles of natural justice do not require that in matters like this the persons who have give....