Appeal under FEMA

By | August 14, 2015
(Last Updated On: August 14, 2015)

Appeal under FEMA

FEMA provides for appeal against order of Adjudicating Authority. If the adjudicating authority is Assistant Director of Enforcement or Deputy Director of Enforcement, appeal will lie with Special Director (Appeals). Further appeal lies with ‘Appellate Tribunal for Foreign Exchange’. If the adjudicating authority is senior to Deputy/Assistant Director, appeal lies directly with Appellate Tribunal.

Appeal to Director (Appeals)

Appeal against order of Assistant Director or Deputy Director as Adjudicating Authority can be filed with Director (Appeals) u/s 17 within 45 days from receipt of copy of the order of adjudicating authority. Director (Appeals) can condone delay in filing appeal if sufficient cause is shown. Special Director (Appeals) will hear the parties and then pass his order. Copy of order will be sent to the parties to appeal and also to concerned adjudicating authority. Proceedings before him shall be deemed to be judicial proceedings and shall be deemed to be a civil court for purposes of sections 345 and 346 of Code of Civil Procedure. [section 17(6)].

As per rule 6 of Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000; the copy of appeal will be sent to Director of Enforcement. Notice will be given and hearing will be given to appellant as well as presenting officer of Directorate of Enforcement. Then, Special Director (Appeals) will pass order within 180 days from date of appeal.

Appellate Tribunal for Foreign Exchange

Appeal from order of Director (Appeals) can be filed with ‘Appellate Tribunal for Foreign Exchange’ (ATFE) within 45 days. Similarly, if adjudication order is issued by officer senior to Deputy/Assistant Director, appeal can be filed directly to Tribunal. [section 19(1)]. The Tribunal has been established w.e.f. 1-6-2000.

Mr. Sarvesh Chandra was first Chairperson of Appellate Tribunal for foreign exchange (ATFE). Later, Justice G D Sharma was Chairperson. Subsequently, Justice O P Nahar has been appointed as Chairperson.

1.2 Tribunal under FEMA

Tribunal is formed by Central Government u/s 18 of the Act. Tribunal is the final fact finding authority and final departmental remedy of appeal. The Tribunal consists of Chairperson and other members. [section 20(1)]. The Tribunal will sit in benches. It will sit at New Delhi or at other places as may be notified. Case can be transferred from a single member bench to large bench. [section 20(4)]. Chairperson of Tribunal shall be qualified to be a Judge of High Court. A member shall be qualified to be a District Judge. Terms of Chairperson and member shall be five years. [section 22]. Terms and conditions of office will be prescribed by Central Government. [section 23]. Chairperson or member can resign from his office. He can also be removed after asking to show cause. [section 25]. Staff of Tribunal will be provided by Central Government. [section 27]. Chairperson can distribute business among benches (section 29) or transfer case from one bench to other. [section 30]. Chairperson and members of Tribunal are public servants. – section 33.

Provisions relating to Tribunal are contained in Appellate Tribunal for Foreign Exchange (Recruitment, Salary and Allowances and Other Conditions of Service of Chairperson and Members) Rules, 2000.

Benches of Tribunal – Single member benches and division benches has been formed. Division bench will hear cases in which penalty exceeds Rs. five lakhs and single member bench will hear cases when penalty is less than Rs. five lakhs. – Notification No. SO 388(E) dated 22-3-2004.

Appearance before Tribunal – A person can appear himself before Tribunal or take assistance of a legal practitioner or a Chartered Accountant. [section 32]

1.2-1 Powers of adjudicating and appellate authorities

The adjudicating authority, Special Director (Appeals) and Appellate Tribunal have powers under sections 16(5), 17(6) and 28(5). These are discussed earlier and hence not reproduced here as powers are same in both the cases. All proceedings before Adjudicating Authority, Special Director (Appeals) and Appellate Tribunal shall be deemed to be judicial proceedings u/ss 193 and 228 of Indian Penal Code. -. – The Adjudicating Authority, Special Director (Appeals) and Appellate Tribunal is deemed to be civil court for purposes of sections 345 and 346 of Code of Criminal Procedure.

1.2-2 Procedure of appeal

The procedure for adjudication and appeal has been specified in Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000. The provisions are as follows –

Appeal to Special Director (Appeals) – Appeal to Special Director (Appeals) will be in Form I in triplicate duly signed by applicant. Appeal will be accompanied by fees of Rs. 5,000. Appeal will set forth grounds of objection to the order appealed against, without any narrative. The grounds will be numbered consecutively. Appeal shall be filed within 45 days. In case of delay, reason for delay shall be specified. After hearing, Special Director (Appeals) will pass a reasoned order.

Special Directors for four zones of India have been appointed vide Notification No. SO 44(E) dated 8-1-2008 [81 SCL 29(St)].

Appeal to Appellate Tribunal – Appeal to Appellate Tribunal will be in form II in triplicate, duly signed. Appeal shall be accompanied by fee of Rs. 10,000. Penalty imposed shall also be deposited. However, Tribunal can waive the requirement of deposit of penalty if Tribunal is of opinion that it would cause undue hardship to the person. Appeal shall be filed within 45 days. In case of delay, reason for delay shall be specified. After hearing, Appellate Tribunal will pass a reasoned order.

1.2-3 Revision by Tribunal

Appellate Tribunal can call for records of any proceedings before Adjudicating Authority to examine its legality, propriety or correctness of the order passed and make such orders as it deems fit. The Tribunal can do so either on its own or otherwise [section 19(6) of FEMA].

No time limit has been prescribed. In UOI v. Ravi Prakash Arora (2008) 87 SCL 142 (Bom HC DB), it was held that revision application should be filed within reasonable time. In this case, revision application was filed by Government after a period of four years and five months. It was held as the application is time-barred.

Jurisdiction of civil court barred

Civil Court will have no jurisdiction to entertain any suit or proceeding in respect of matter before Special Director (Appeals) or Tribunal. – section 34. [Of course, writ jurisdiction of High Court and Supreme Court cannot be barred by any legislation].

Appeal to High Court on question of law

Appeal to High Court can be made against order of Tribunal within 60 days from date of communication of order. Government can also file appeal against order of Tribunal. Appeal can be filed only on question of law [section 35]. Tribunal is final fact finding authority and appeal on facts cannot be filed.

In Raj Kumar Shivhare v. Assistant Director (2010) 100 SCL 211 (SC), it was held that since there is provision to file appeal against any order, High Court should not entertain a writ petition where appeal can be filed with High Court.

High Court does not have jurisdiction to condone delay beyond 60 days – Kartik K Parekh v.Appellate Tribunal for Foreign Exchange (2011) 271 ELT 356 (Bom HC DB) * UOI v. Ashok J Ramsinghani (2011) 107 SCL 335 = 11 taxmann.com 157 = 272 ELT 534 (Bom HC DB) * UOI v.Reliance Industries (2012) 112 SCL 127 = 18 taxmann.com 330 (Bom HC DB).

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