AI Drafter 
TaxTMI 
TaxTMI 
2017 (7) TMI 312
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....ad with Section 28 of FEMA dismissing the appeals (Appeals numbers 177-178/2007) of the first and second appellant herein which had been taken out against adjudication order no. ADJ/62-B/SDE/KNR/2007 dated 30.10.2007 of Special Director, Enforcement Directorate, Mumbai imposing penalties on account of violation of Sections 9(1)(b) and (d), Section 68(1), Section 64(2) and 63 of FERA. 2. The Foreign Exchange Regulation Act, 1973 (FERA) was repealed and the appellate board constituted under Section 52 of the said Act was dissolved by Section 49 of the Foreign Exchange Management Act, 1999 (FEMA), it having come into force with effect from 01.06.2000. However, notwithstanding such repeal, by virtue of Section 49(5), all action taken or purp....
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....s. 5,42,660/- besides certain incriminating documents. The investigation revealed that the second appellant and one Amrit Bhai Nathu Bhai Patel (who were partners in the first appellant firm) with one employee (Jayantibhai Tribhuvandas Patel) had indulged in hawala payments. During the pendency of the adjudication proceedings that were initiated, the other partner (Amrit Bhai Nathu Bhai Patel) and the employee (Jayantibhai Tribhuvandas Patel) died and the action against them thus abated. 4. The proceedings before the Collector of Customs, Mumbai under the Customs Act resulted in confiscation of the diamonds and Indian currency by order dated 03.10.1994 which, however, was set aside by (erstwhile) Customs Excise and Gold Control Appellate....
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....4) of FEMA and further that, even otherwise, there was inordinate delay in action in the wake of order dated 03.10.2000 of CEGAT. These submissions, however, need only to be mentioned and rejected with reference to the observations of the Supreme Court in S.K. Sinha Vs. Videocon International Ltd. 2008 (2) SCC 492 to the effect that "taking cognizance of offence" is "entirely different from initiating proceedings". Section 49(3) and (4) of FEMA reads as under :- "49. Repeal and saving.- (1) x x x (2) x x x (3) Notwithstanding anything contained in any other law for the time being in force, no court shall take cognizance of an offence under the repealed Act and no adjudicating officer shall take notice of any contravention under ....
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.... Customs Act, 1962. The Bombay High Court held in that context that penalty having been imposed against a partnership firm, separate penalties could not have been imposed on its partners. This argument cannot hold good in the context of adjudication proceedings under FERA. 9. In above context, Section 68 of FERA only needs to be referred to. It reads as under :- 68. Offences by companies - (1) Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time of the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business of the company as well as the company, shall be deem....
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....said provision is to be read mutatis mutandis in relation to a firm or other association of individuals and the expression "director" also connotes in relation to a firm, its partner(s). 11. It is the grievance of the appellants that the Special Director in the adjudication proceedings did not carry out independent investigation and has instead gone by the statements which were recorded under Section 108 of the Customs Act which, having been retracted, in the submission of the appellants, were not admissible in the adjudication proceedings under FERA. Reliance is placed on a decision of a learned single judge of this court reported as Enforcement Directorate Vs. Ravi Sharma, 2003 (156) ELT 180 (Del.) and the ruling of the Supreme Court i....