TaxTMI 
TaxTMI 
2013 (11) TMI 1815
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....No.99/2011 was not listed with the appeal No.98/2011 and the same was listed on 7-11-2013 for the first time before this Bench with the report of the Registry dated 30-10-2013 explaining therein that the appeal No.99/2013 is listed for the first time for hearing before the Tribunal as the file was not traceable. The said file most probably has been mixed up with other files during the shifting process of this Tribunal. The registry has now re-constructed the file after getting the papers from the Enforcement Directorate as well as from the Appeal No.98/2011. The appeals No.98/2011 and 99/2011 are connected appeals which have been filed against the common order. The appeal No.98/2011 has already been heard and the same is reserved for order. The Hon'ble High Court of Bombay, Goa Bench vide their order dated 6-8-2013 has directed the Tribunal to dispose of appeal Nos. 98/2011 and 99/2011 expeditiously and in any case on or before 30-11-2013. It has further been specified in the said report of the Registry that another court fee in appeal No.99/2011 of Rs. 10,000/- has already been deposited vide D.D.No. 000109 dated 09-08-2011. When the matter was listed on 7-11-2013 before this ....
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....LA ex-parte with reference to the Appeal No.99/2011 the order was reserved. The arguments of the Ld. ALA that a single appeal has been filed for the company and for the director of the company Ms. Yulia Yaskova has forced to be relied upon. In paragraph 7 of the appeal No.98/2011 filed on behalf of M/s Queri Resorts (P.) Ltd. (in short company) it has been stated as below:- "The appellant company and its director Ms. Yulia Yaskova aggrieved by the impugned order prefer an appeal to this Hon'ble Tribunal". Paragraphs 6 & 8 of the copy of said Writ Petition No. 69/2013 filed by the Ld. ALA read as under:- '6. In compliance of said order No. ADJ/19/B/SDE/RAJ/2011/FEMA/4043 dated 17-6-2011 of respondent No.2 the petitioner company deposited the penalty amount to Rs. 12,00,000/- and other amounts with respondent No.2 on 10-08-2011. The copy of covering letter under which the amount was deposited with respondent No.2 is annexed hereto and marked as "EXHIBIT-C".' '8. Being aggrieved by said order No. ADJ/19/B/SDE/RAJ/2011/FEMA/4043 dated 17-6-2011 of the respondent No.2 the petitioner preferred an Appeal before the respondent No. 1 Appel....
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....11 has filed written arguments. I have considered carefully the papers on record in both appeals, written arguments filed by the Ld. counsel and the oral submissions of Ld. Counsel and Ld. ALA and Ld. Legal Consultant appearing for both the parties in appeal No. 98/2011 and oral submissions of Ld. ALA ex parte in appeal No.99/2011. 4. The brief facts, relevant for the disposal of the appeal Nos.98-99/2011 filed by the joint appellants, M/s Queri Resorts (P) Ltd. (in short company) and its director Ms. Yulia Yaskova, are that both the appeals are arisen from common Adjudicating Order No. ADJ/19/B/SDE/RAJ/2011/ FEMA/4043 dated 17-06-2011 passed by the Special Director, Enforcement Directorate, Mumbai (in short impugned order). By the impugned order the penalty of Rs. 12,00,000/- has been imposed on the company and a penalty of Rs. 1,00,000/- on each Ms. Yulia Yaskova director of the company and the appellant in Appeal No.99/2011 and 5 other directors who are not appellant in these appeals. Further the three properties purchased by the company for a total amount of Rs. 1,53,17,000/- involved in the contravention of the provisions of section 6(3)(b) of FEMA read with item No.6 of Li....
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.... the purchase of land as well as receipt of FDI on behalf of the company. On scrutiny of the FIRCs submitted vide said letter, it appears that money was brought into India in favour of the company as detailed below through Centurion Bank of Punjab Ltd./Axis Bank Ltd., Goa:- Sl. No. Date of Receipt Remitter Amount in USD Amount in Rs. Purpose of Remittance 1. 21.08.06 Brendan Interhold Inc 2317 106791 Investment in share capital 2. 07.02.07 Formulex LLP 132897 5831520 -do- 3. 01.03.07 Formulex LLP 29997 1321668 -do- 4. 08.04.07 Formulex LLP 14997 644121 -do- 5. 01.06.07 Electrade Holdings Ltd 40000 1616000 -do- 6. 28.04.08 M/s Lorenzini Ventures Ltd. 60000 2391000 -do- 7. 12.06.08 M/s Lorenzini Ventures Ltd. 287863 12320536 Foreign Direct Investment 8. 18.09.08 M/s Lorenzini Ventures Ltd. 5019 237411 -do- 9. 19.09.08 M/s Lorenzini Ventures Ltd. 27893 1289493 -do- 10. 23.12.08 M/s Lorenzini Ventures Ltd. 42773 2023163 -do- Total 643756 27781886 8. ....
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....5099 equity shares of the company to Mr. Alexander Beiser and Mr. Konstantin Elikn against the remittance of Rs. 95,20,283/- received from three different remitters. As such the company is charged under section 6(3)(b) of FEMA, read with para 8 of schedule 1 of regulation 5(1) of Foreign Exchange Management (Transfer or Issue of Security by a person resident outside India) Regulations, 2000 for issuing these 90599 shares to these foreign nationals i.e. Mr. Alexander Beiser and Mr. Konstantin Elikn. But the charges are not established for imposing the penalty in the said paragraphs 31 to 34 of the impugned order and no penalty for such contravention has been imposed on the company in the said paragraphs 31 to 34 of the impugned order. Therefore, such charges for which no penalty has been imposed is not required to be discussed for disposing of the appeals. 10. In the light of the facts and discussions specified in the preceding paragraphs, the following issues are required to be analyzed for understanding and disposing of the appeals:- (I) Whether the company has purchased the agricultural land worth Rs. 1,53,17,000/- by utilizing the foreign remittances obtained under t....
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....h could not have been purchased by the company through FDI and that he resigned as a director from the company on 15-08-2009. It is clear from the impugned order that Mr. Francisco X Souza was a director of the company when the said three properties were purchased. It is further, apparent from para 10 of the impugned order that the statement of another director Mr. Abhalesh B Talkar was also recorded on 12-03-2010 under section 37 of FEMA wherein he has stated that he was appointed as a director of the company in May, 2009 after Mr. Francisco X Souza resigned. He has further, stated that he was asked by the Russian Director of the company to claim the land to be non-agricultural and that he was not sure about it as he did not have any documentary evidence in support of that. From para 11 of the impugned order, it is further clear that Additional Collector-I, Collectorate of North Goa vide letter No.4/20-72-RB/FEMA/2010 dated 04.05.2010, informed the Directorate that no conversion Sanad from agricultural to non-agricultural purpose was issued for the properties held by the company at Survey Nos.116/1 (Vill. Querim), 116/1 (Vill. Keri) and 117/0 (Vill. Querim), Goa admeasuring 4167, ....
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....6/1 (Part) was not agricultural property but residential property. However, in all these cases I find that the permission granted was only to repair the structure which already existed for quite some time in the said property and not for construction of any new building. These letters does not show that the Govt. of Goa had granted any permission to convert the property for use into non-agricultural purposes." It is obvious from the observations in the above quoted para 23 of the impugned order that permission granted in respect of one of the property i.e. H.No.166 in Sy. No.116/1 (Part) was granted only to repair the structure which already existed for quite some times in the said property and not for construction of any new building. The said letters do not show that the Government of Goa had granted any permission to convert the property to use for non-agricultural purposes. 12. The Ld. Counsel for the appellant in appeal No. 98/2011 has submitted in respect of the statement of Mr. Francisco X Souza that the statement is of ex-director of the company who allegedly claimed that the properties purchased by the appellant are agricultural properties. The statement is mer....
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.... at the time they were purchased and remained agricultural land till 4-5-2010 as there is no conversion sanad issued till that date. The Ld. Counsel for the appellant in appeal No.98/2011 has further relied on the judgment of State of Goa v. Zarina Karmali, 1997 (2) Goa L.T. 264 and has submitted that there is no presumption in law that all lands are agricultural lands unless they are clarified as 'Non-agricultural'. The statement of the Ld. Counsel is not tenable as in this matter there is no presumption on the basis of the sanad that the lands are agricultural lands. The sanad only corroborates the statement of Mr. Francisco X Souza. There is corroboration of the facts by the sanad, there is no presumption on the basis of sanad. As such ratio decidendi in the aforesaid judgment is not applicable on the facts of the instant appeals in which there is no presumption on the basis of sanad that lands are agricultural lands. Such purchasing of agricultural lands by the company is in contravention of the provisions of section 6(3)(b) of FEMA read with item No. 6 of List B of Annexure A to Schedule 1 of regulation 5(1) of Foreign Exchange Management (Transfer or issue of Security....
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.... powers under FEMA. In view of section 13(1) of FEMA for contravention a penalty up to thrice the sum involved for the contravention be extended. The agricultural properties involved in contravention are quantified to Rs. 1,53,17,000/- and the penalty imposed on the company is amounting to Rs. 12,00,000/- which is well within the limits of the penalty provided under law and is reasonable. 13. Regarding issue (II) specified in preceding para 10, it is relevant that the charge against the appellant in appeal No.99/2011 Ms. Yulia Yaskova is that she was the incharge of and was responsible to the company for the conduct of its business. As such she is guilty for the contravention by the company discussed in preceding paragraphs 11 & 12 in terms of section 42 (1) of the FEMA. Section 42 of the FEMA reads as under:- '(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 the contravention was committed, was in charge of, and was responsible to, the company, for the conduct of the business of the company as well as the company, shall be deemed to be gu....