Dismissed

FPA-FE-04/MUM/2014 of Shri Suresh M. Jumani v/s The Special Director, Directorate of Enforcement, Mumbai

ATFP30 Oct 2018FPA-FE-04/MUM/2014

Case brief

AI extract

What is this about?

Appeal against an adjudication order for alleged FERA violation arising from fictitious exports. The Tribunal examined claims regarding procedural lapses and natural justice, finding that the appellant deliberately failed to avail opportunities for hearing and had previously admitted to the offences.

What did the court decide?

The appeal filed by Shri Suresh M. Jumani against the adjudication order dated 16.12.2013 was dismissed.

FPA-FE-04/MUM/2014 of Shri Suresh M. Jumani v/s… — Pension and Retirement Benefits | ATFP (2018)

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APPELLATE TRIBUNAL FOR SAFEMA, FEMA, PMLA, NDPS, PBPT ACT AT NEW DELHI

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DATE OF DECISION: 30.10.2018

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FPA-FE-04/MUM/2014

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Shri Suresh M. Jumani

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… Appellant

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Versus

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The Special Director, Directorate of Enforcement, Mumbai

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… Respondent

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Advocates/Authorized Representatives who appeared

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For the Appellant	: Ms. Yashmit Kaur, Advocate
For the Respondent	: Mrs. Aagam Kaur, Legal Consultant
CORAM SMT. ANANYA RAY	: MEMBER

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JUDGMENT

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FPA-FE-04/MUM-2014

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The present appeal has been filed by one Shri Suresh M. Jumani against the adjudication order No. ADJ/35-B/AD/APP/FERA/2013 dated 16.12.2013.

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Briefly the case is that Customs Authorities in Bombay had booked cases against a number of exporters for presenting forged copies of shipping bills, GR-I Forms, invoices etc. where no shipment had actually taken place. In all such cases, remittances against exports have been received by the exporters. Since there appeared to be FERA violation the Enforcement

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Directorate investigated such cases. One such case is the present one. The statement of Shri Suresh Jumani was recorded thrice on 16.08.1995, 17.08.1995 and 21.08.1995 under Section 40 of FERA wherein Shri Jumani inter alia stated that exports had actually not taken place under certain Bill of Ladings but he had received foreign exchange remittances from M/s. Amar Traders, Dubai & M/s. Gem Trading Company, Dubai.

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This case was earlier adjudicated vide the adjudication order dated 22.06.2001 against which the Appellate Tribunal vide its order dated 16.11.2007 in appeal No. 413/2001 had remanded the matter back to the adjudicating authority for fresh adjudication after providing copies of the relied upon documents afresh to the appellant. Hence, the present proceedings. The adjudicating authority in the present proceedings vide the impugned order dated 16.12.2013 have recorded that a fresh set of documents was again sent to the appellant vide their office letter dated 03.04.2008. In the appeal, the appellant has however again stated that copies of the documents relied upon by the Enforcement Directorate had not been supplied to them. The appellant has further stated that they were not afforded opportunity of personal hearing before the impugned order could be passed. They have also challenged the show cause notice pursuant to which the earlier adjudication order dated 22.06.2001 and the present impugned order dated 16.12.2013 has been passed stating that it was false. The show cause notice has invoked Section 9(1)(f)(i) of FERA, 1973, but the same was not applicable to them and the adjudicating authority has failed to establish as to how they are covered under the same. They also stated that the matter was unduly delayed and the adjudication was passed only in 2013 although the case was remanded back in 2007. They further

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argued that the whole case is based on the statement taken from Shri Jumani which was taken under duress and coercion by the officers of the Enforcement Directorate and the same was retracted by the appellant. That the statements given by other parties did not name the appellant.

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In response, the respondent took a preliminary objection that as the impugned order has been passed by the Assistant Director, any appeal aginst it would lie with the Special Director (Appeals) as per the provisions of FEMA. They further stated that the remand order of the tribunal dated 16.11.2007 had directed for grant of a fresh set of documents to the appellants. The appellants are not denying that they have received the same. But on merits they are not relying on those documents before the tribunal. This only shows that the appellant is only trying to delay the decision. They argued that the adjudicating authority has given them a number of occasions to appear for personal hearing but it was the appellant who did not avail of the same. They drew attention to the para in the adjudication order wherein it is recorded that “fresh personal hearing was fixed on 12.05.2008, 22.07.2008 and the noticee Shri Suresh Jumani requested for adjournment of eight weeks on account of to locate and pursue the relevant documents pertaining to the case for the period 199395. Considering this request, further hearing was fixed on 28.07.2008, 09.11.2013, 26.11.2013 and 29.11.2013…….. Shri Suresh Jumani again quoted the order dated 16.11.2007 (of Tribunal) and again requested for fresh set of documents. On 06.12.2013, fresh set of documents was forwarded under intimation that the case will be finally decided on 16.12.2013. On 16.12.2013, neither Shri Jumani nor his advocate appeared and I constrained to decide the issue on the basis of available

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records and documents……..” This would prove that enough opportunities have been given but they have not availed the same. The respondent further stated that appellant is not arguing on merits and is only basing his case on principles of natural justice which has been duly followed as explained above. On merits, they stated that in all the three statements taken from the appellant has accepted the offence and his involvement. The statements clearly bring out that fictitious claims were made for getting the export benefits under various schemes of the Government of India, and also getting foreign exchange remittances without any actual export having taken place. That there was no retraction by the appellant at any stage. That Section 9(1)(f)(i) is very much applicable as they have received payment from abroad in contravention of the provisions of FERA.

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I have examined the case and have gone through the documents on record as well as heard both the parties. The whole case emanated from the investigations done by the Customs Authority into fictitious exports to claim the benefits under the DEEC scheme. The investigation by the Customs Authority have established these cases. The appellant has given his statement thrice taken by the ED officials on three occasions wherein he had admitted that no exports had actually taken place and he was doing these fictitious exports to (a) get foreign exchange remittances and (b) to obtain benefits under the DEEC scheme. The whole case of the appellant before the tribunal is non-observance of principles of natural justice. They have not denied the facts, except stating that his statements were taken under coercion and that he had retracted them. During the hearing they were asked to produce the certified copies of retraction, for which they sought some time and the same was granted. However, on the next date of

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hearing, they were unable to produce any certified copy of any such retraction which they had purportedly made before the Chief Metropolitan Magistrate Esplanade, Bombay. The counsel for the appellant fairly agreed that since they were unable to produce the certified copy of the so called retraction, they will not be relying on the same. Hence, it follows from the above that the statements were given voluntarily on three occasions by the appellant where he has accepted his involvement in the case.

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On the principles of natural justice, the adjudicating authority has recorded that the fresh set of documents was sent to him vide their office letter dated 03.04.2008 which has not been denied by the appellant. In fact, pursuant to the personal hearing notice of 22.07.2008, the appellant requested for adjournment of eight weeks but did not dispute, receipt of the documents sent by the office letter dated 03.04.2008. On the other hand, a fresh set of documents was again sent to them on 06.12.2013 which the appellant accepts to have received but has stated that they did not have enough time to go through it, before the next date of hearing fixed for 16.12.2013. That on 16.12.2013, they did appear for the hearing but as the time was not fixed by the adjudicating authority they were not able to meet the adjudicating authority for the hearing. From the above it is clear that the documents had been received by them earlier but they are not acknowledging the same but not disputing the same either. The tribunal‟s direction on remand was therefore fulfilled way back in 2008 and the government is under no obligation to forward the set of documents again and again to the appellant who has not appeared before the adjudicating authority when the case was fixed for hearing on a number of occasions right from 2008 onwards as recorded in the adjudication order and

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reproduced at para 4 supra. They are only relying on one notice dated 06.12.2013 fixing the hearing for 16.12.2013 stating that they had not been indicated the time for hearing, and hearing fixed for 09.11.2013 which was purportedly a second Saturday and therefore a holiday. But they are silent on the earlier dates which were given to them and therefore it can be concluded that they were aware of the earlier dates of hearing but did not appear deliberately.

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On the question of jurisdiction to hear this appeal as raised by the respondent, I find that an earlier bench of the erstwhile Tribunal for Foreign Exchange had vide its order dated 05.10.2016, allowed the present appeal to be heard here. Hence, I will rest this matter there. Of course this will not have any precedent value.

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On the basis of above discussions, I find that principles of natural justice has been duly followed and the appellant have failed to avail of the opportunities given to him. Moreover, his silence over receipt of the relied upon documents afresh in 2008 after the Tribunal‟s remand order of 16.11.2007 also casts shadow on his intentions except that he appears to be trying to delay the decision. On merits as discussed above, his 3 statements which are voluntarily and the investigations done by the Customs brings out the offence as well as his involvement. The Bombay High Court in the case of Vinod M. Chitalia vs. UOI in FERA appeal No. 8/12 decided on 28.03.2012 has held as follows “The statements made to DRI (Customs) can be used in the present proceedings as they pertain to the same transaction. It must be borne in mind that under Section 108 of the Customs Act, 1962 the statements recorded before the DRI are deemed to be in a judicial proceeding within the meaning of Section 193 and 228 of the Indian

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Penal Code, 1860......... Therefore there is no prohibition in relying upon statements made under the Customs Act for the purpose of the adjudication proceedings under FEMA..........” Hence inference can be drawn from the above that the investigations done under Customs Act, can be used for the purpose of FERA/FEMA also, as the transaction in this case also is the same. The court further held that “in assessing these findings, the Court cannot be oblivious of the fact that clandestine transaction of the nature involved in the present case, are within the peculiar knowledge of persons such as the appellant who are parties to those transactions. The burden which is cast upon the adjudicating authority to establish a violation must be assessed from a robust and common sense perspective. Clandestine violations take place under the cloak of secrecy. To impose a burden of establishing in an adjudication proceeding, every conceivable link of an unlawful transaction would result in a manifest failure of justice and would defeat the underlying purpose of the Act.” Incidentally, the fact of the present case and the case before the Bombay High Court were similar.

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Accordingly, I do not find any merits in the appeal and therefore dismiss it as rejected.

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(Ananya Ray) Member

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New Delhi, 30^th October, 2018

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„A‟

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