TaxTMI 
TaxTMI 
2019 (1) TMI 1502
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....of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as "FERA") in respect of imports and exports of certain commodities made with two foreign parties, viz., M/s Fingrain, S.A., Geneva and M/s Continental Grain Export Corporation, New York during the year 197778. 4. During the pendency of the proceedings, FERA was repealed with effect from 01.06.2000. It was, however, replaced by Foreign Exchange Management Act, 1999 (hereinafter referred to as "FEMA"). 5. On 05.12.2003, an adjudication order was passed by the Deputy Director of Enforcement under FEMA read with FERA in relation to the show cause notice dated 01.05.1991. By this order, penalty of Rs. 15,50,000/was imposed on M/s Godrej Industries Ltd. and its two Directors for contravening the provisions of Sections 9 (1)(a) and 9(1)(c) read with Section 16 (1) of FERA. 6. On 15.01.2004, the respondent Nos. 2 to 4 felt aggrieved by the adjudication order dated 05.12.2003 and filed appeal before the Special Director (Appeals) under Section 17 of FEMA. 7. On 08.09.2004 and 08.11.2004, the Special Director (Appeals) dismissed the appeals as being not maintainable. He held that the Special Director (Appeals)....
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....t the order passed under Section 51 of FERA in the proceedings initiated prior to 01.06.2000, viz., is it the "Special Director (Appeals)" under Section 17 of FEMA or is it the "Appellate Tribunal" under Section 19 of FEMA. 16. In other words, the question is, if the Adjudicating Officer has passed an order after the repeal of FERA in the proceedings initiated prior to 01.06.2000, whether an appeal against such order will lie before the "Special Director (Appeals)" under Section 17 of FEMA or before the "Appellate Tribunal" under Section 19 of FEMA. 17. In order to answer the question involved in this appeal, it is necessary to take note of some relevant provisions of FERA (since repealed) and FEMA under which the issue was dealt with. Though Rules are also framed under FEMA prescribing the manner in which the appeals are to be prosecuted but for deciding the question, it may not be necessary to examine the Rules. 18. The relevant Sections are Sections 50, 51, 52, 54 and 81 of FERA and Sections 17, 18, 19 and 49 of FEMA which read as under: "FERA Section 50 Penalty If any person contravenes any of the provisions of this Act other than section 13, cl....
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....is satisfied that the appellate was prevented by sufficient cause from filing the appeal in time: Provided further that where the Appellate Board is of opinion that the deposit to be made will cause undue hardship to the appellant, it may, in its own discretion, dispense with such a deposit either unconditionally or subject to such conditions as it may deem fit. (3) On receipt of an appeal under subsection (2) the Appellate Board may, after making such further inquiry as it deems fit, confirm, modify or set aside the order appealed against and the decision of the Appellate Board shall, subject to the provisions of section 54, be final and if the sum deposited by way of penalty under subsection (2) exceeds the amount directed to be paid by the Appellate Board, the excess amount shall be refunded. (4) The Appellate Board may, for the purpose of examining the legality, propriety or correctness of any order made by the adjudicating officer under section 50 read with section 51 in relation to any proceeding, on its own motion or otherwise, call for the records of such proceeding and make such order in the case as it thinks fit. (5) No order of the adj....
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.... is hereby repealed. (2) Notwithstanding such repeal (a) 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 licence, permission, authorisation or exemption granted or any document or instrument executed or any direction given or any proceedings taken or any confiscation adjudged or any penalty or fine imposed) 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) the provisions of section 60 of this Act shall apply in relation to the contravention of any of the provisions of the Act hereby repealed or of any rule, direction or order made there under; (c) any appeal preferred to the Foreign Exchange Regulation Appellate Board under subsection (2)of section 23E of the Act hereby repealed but not disposed of before the commencement of this Act and any appeal that may be preferred to the said Board against any order made or to be made under section 23 o....
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....order appealed against. (5) The Special Director (Appeals) shall send a copy of every order made by him to the parties to appeal and to the concerned Adjudicating Authority. (6) The Special Director (Appeals) shall have the same powers of a civil court which are conferred on the Appellate Tribunal under subsection (2) of section 28 and- (a) all proceedings before him shall be deemed to be judicial proceedings within the meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860); (b) shall be deemed to be a civil court for the purposes of sections 345 and 346 of the Code of Criminal Procedure, 1973 (2 of 1974). Section 18 Appellate Tribunal.- The Appellate Tribunal constituted under subsection( 1) of Section 12 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (13 of 1976), shall, on and from the commencement of Part XIV of Chapter VI of the Finance Act, 2017, be the Appellate Tribunal for the purposes of this Act and the said Appellate Tribunal shall exercise the jurisdiction, powers and authority conferred on it by or under this Act. Section 19 Appeal to Appellate....
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....unal shall record its reasons in writing for not disposing of the appeal within the said period. (6) The Appellate Tribunal may, for the purpose of examining the legality, propriety or correctness of any order made by the Adjudicating Authority under section 16 in relation to any proceeding, on its own motion or otherwise, call for the records of such proceedings and make such order in the case as it thinks fit. Section 35 Appeal to High Court.-Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law arising out of such order: Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days. Explanation.-In this section "High Court" means- (a) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and (....
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....c) every appeal from any decision or order of the Appellate Board under subsection (3) or subsection (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 subsection (3), the mention of particular matters in subsections (2), (4) and (5) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897 (10 of 1897), with regard to the effect of repeal." 19. Section 49 (5)(b) of FEMA deals with repeal and saving in relation to the action taken and to be taken under FERA, 1973. Reading of this Section shows that the legislature has equated the Appellate Board constituted under FERA with the Appellate Tribunal constituted under FEMA for disposal of the appeals filed under Section 52(2) of FERA against an order passed under Section 51 of FERA which were pe....
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....e Appellate Tribunal by virtue of Section 49(5)(b) of FEMA. 27. Fourth, the reason behind this simultaneous statutory transfer of pending appeals to the Appellate Tribunal under FEMA appears to be that the legislature did not intend to provide two separate Appellate Authorities under FEMA for challenging the adjudication order passed under Section 51 of the FERA, i.e., one appeal before the Special Director (Appeals) and the other appeal before the Appellate Tribunal under FEMA. 28. In other words, the legislature did not intend to make a distinction between the two appeals for their disposal by two different appellate authorities under FEMA only because one appeal was filed prior to 01.06.2000, therefore, it will lie before the Appellate Tribunal whereas the other appeal which was filed after 01.06.2000 though against the similar order, it will lie before the Special Director (Appeals). In our view, there does not appear to be any justifiable reason to make such distinction for filing of appeals filed against the similar order passed under FERA before two different appellate authorities under FEMA. 29. In our opinion, this intention of the legislature is strengthened when....
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....to why the same legislative intent while interpreting the provisions of FERA, 1973 and FEMA, 1999 is applied for deciding the identical question now arising in the case. 37. The aforementioned submission is not acceptable for yet another reason. Perusal of Scheme of FEMA would show that the Special Director (Appeals) is subordinate in hierarchy to the Appellate Tribunal prescribed under Section 49(5)(2) of FEMA. It is, therefore, not possible to hold that one appeal would be maintainable before the Appellate Tribunal and the other appeal arising out of similar order would be maintainable before the Special Director (Appeals), who is subordinate in hierarchy to the Appellate Board. Such distinction does not stand for any logic. 38. This question can be examined from another angle also. If the submission of the learned counsel for the respondents is accepted that the appellate forum in this case for filing appeal is " Special Director (Appeals)" and not the "Appellate Tribunal" under FEMA then it will result in anomalous situations which will again be incongruous. 39. The anomalous situation would be, the orders passed by the Appellate Tribunal in the appeals, which stood tr....