Telco Ltd. Vs. Dir. of Enforcement of the Fera Board - Court Judgment

Excerpt:
fera, 1973 - sections 8(3) and 8(4)--licence issued under the import policy no. am-73--covering import of spare parts--appellants imported jolt valves,vibrator valves, squeeze valves, and lift valves--by opening a letter of credit through bank of baroda. - section 34: [d.k. deshmukh, s.j. vazifdar & j.p. devadhar, jj] court fee on petition under section 34 of the act bombay court fees act (36 of 1959), schedule i, article 3, schedule ii, article 1(f)(iii) held, according to article 3 of schedule i, on any plaint, application or petition or memorandum of appeal for setting aside or modifying an award, same court fee is payable as is payable on a plaint or memorandum of appeal under article 1. thus, when an award is challenged by a plaint, application, petition or memorandum of appeal, court fee is payable on ad valorem basis. but from this requirement of payment of court fee on ad valorem basis, article 3 excludes an application or petition or memorandum of appeal filed in civil or revenue court challenging any award made under the arbitration act, 1940.thus, the provisions of article 3 of schedule 1 do not apply when an application is filed or appeal is filed challenging an award made under the arbitration act, 1940. thus the provisions of article 3 of schedule i do not apply when an application is filed challenging an award made under the arbitration act, 1940. the question, therefore, that arises for consideration is whether reference to the provisions of 1940 act found in article 3 of schedule i of the bombay court fees act can be said to include reference to the 1996 act. perusal of the provisions of section 8 of general clauses act shows that where by a central enactment any provision of a former enactment is repealed and re-enacted with or without modification then reference in any other enactment to the provisions so repealed shall, unless a different intention appears, be construed as references to the provisions so re-enacted. in the present case, it is common ground that the former enactment is the 1940 act, the new enactment is the 1996 act and any other enactment is the bombay court fees act, the only provision of the 1940 act referred to in article 3 of schedule 1 of the bombay court fees act is the provisions of section 33 of the 1940act and bare comparison of that provision with the provisions of sub-section (1) of section 34 of the 1996 act shows that the provision of section 33 of 1940 act is repealed and re-enacted in sub-section (1) of section 34 of the 1996 act with slight modification. therefore, reference to the provisions of section 33 of the 1940 act in article 3 of schedule-i of the bombay court fees act has to be construed, in view of the provisions of section 8 of the general clauses act, as reference to the provisions of section 34 of the 1996 act. so far as an appeal filed under section 37 of the 1996 act is concerned, perusal of section 37 shows that an appeal is provided to the appellate court against an order setting aside an arbitral award or refusing to set aside an arbitral award under section 34. thus, as the provisions of article 3 of schedule-i do not apply to an application or petition filed under section 34 of the 1996 act, they will also not apply to the memorandum of appeal filed to set aside or modify an award made by the arbitrator under the 1996 act. in other words nothing contained in article 3 of schedule-i of the bombay court fees act applies to an application, petition or memorandum of appeal to set aside or modify any award made under the 1996 act as it does not apply to an application or petition or memorandum of appeal to set aside or modify an award made under the arbitration act, 1940. perusal of the provisions of section 8 of the general clauses act shows that references in any other enactment to a provision in a former enactment is to be construed as reference to re-enacted provision in the new enactment unless a different intention appears. the different intention may appear either in the new enactment or in the other enactment. nothing was pointed out either in the 1996 act or in the bombay court fees act which can be construed as a different intention or which will show that it was not the intention of the maharashtra legislature to exclude an application or petition or memorandum of appeal filed in court to set aside or modify an award made under the 1996 act, from the provisions of article 3 of schedule-i of the bombay court fees act. it appears that the intention behind excluding an application made, challenging the award made under the 1940 act, from requirement of payment of ad valorem court fee which is required to be paid if the same litigant filed a suit on the same subject matter, was to encourage a litigant to go for arbitration instead of filing a suit. nothing has been pointed out to show that ther4e is any change in that legislative policy. on the contrary, from the preamble of the 1996 act it is clear that the policy of the legislature is to encourage people to adopt the mode of arbitration for resolving disputes. article 3 of schedule-i of the bombay court fees act does not apply to a petition, application or memorandum of appeal filed for challenging an award made under the 1996 act, and court fee on a petition filed under section 34 of the 1996 act challenging an award in high court is payable according to article 1(f)(iii) of schedule ii. section 37: [d.k. deshmukh, s.j. vazifdar & j.p. devadhar, jj] court fee on appeal under section 37 of the arbitration & conciliation act, 1996 - held, court fee is payable according to article 13 of schedule ii of the bombay court fees act. schedule i, article 3 & schedule ii, article 1(f)(iii): [d.k. deshmukh, s.j. vazifdar & j.p. devadhar, jj] court fee on petition under section 34 of the arbitration & conciliation act, 1996 - held, when a petition under section 34 is to be filed before a principal civil court of original jurisdiction which is not a high court, the question arises which article of either first schedule or second schedule would apply. in so far as the challenge to an award made under the 1940 act is concerned, an application under section 33 of that act could be made to a civil court and therefore, payment of court fee was governed by article 1(a) of schedule ii. this was so because the application was to be presented to the court of civil judge which was not a principal civil court of original jurisdiction. but now because of change of definition of term court in the 1996 act, a petition has to be presented, challenging an award made under the 1996 act in terms of the provisions of section 34 thereof, before the principal civil court of original jurisdiction. no entry either in the first schedule or in the second schedule was pointed out which applies to an application or petition to be made before the principal civil court of original jurisdiction, and therefore, when a litigant wants to file petition before a principal civil court having original jurisdiction which is not high court, challenging an award made under the 1996 act, no court fee under bombay court fees act is payable because of absence of a general or specific provision. therefore, it can be said that no court fee under the bombay court fees act is payable when a petition under section 34 challenging an award is filed before any principal civil court of original jurisdiction which is not high court. schedule ii, article 13: [d.k. deshmukh, s.j. vazifdar & j.p. devadhar, jj] court fee on appeal under section 37 of the arbitration & conciliation act, 1996 - held, court fee is payable according to article 13 of schedule ii of the bombay court fees act. - in this case, as pointed out earlier, the authorities have failed to show the foreign exchange acquired by the appellants was utilised for the purpose other than the one for which it was acquired.shafi parkar, j.1. the appellants have taken exception to the penalty imposed by the two authorities below, imposing penalty of rs. 2,500/- on the appellants for the alleged contravention of sub-sections (3) and (4) of section 8 of the foreign exchange regulation act, 1973.2. the facts leading to the present controversy, briefly stated, are as follows :the appellants held import licence dated 9-8-1972 for a c.i.f. value of rs. 20 lakhs covering the import of spare parts required for their plant /machineries. the said licence was issued under the import policy no. am-73. the appellants had, pursuant to the said import licence, imported spare parts i.e. jolt valves, vibrator valves, squeeze valves and lift valves from germany on 23rd march 1974 for their moulding machines installed at jamshedpur. the total value of the goods imported was c.i.f. rs. 56,389/- for which they had opened letter of credit with the bank of baroda who are, admittedly, authorised agents under the provisions of the fera, 1973. on 9-7-1974 the customs authority held that the appellants had exceeded the limit under the import licence to the extent of rs. 26, 389/- as the same were not covered by the subject licence on the ground that the appellants were allowed to import six items each valued at rs. 5,000/- that is to say up to the total limit of rs. 30,000/- for all items together. as the value of the c.i.f. imports was rs. 56,389/- the customs authority held that the import of the goods to the extent of rs. 26,389/- was not covered by the subject licence and, therefore, the appellants were allowed to clear the goods on payment of redemption fine of rs. 13,150/-. the said order, when challenged by the appellants before the collector of customs, was confirmed on 6-5-1977. however, in revision filed before the central government, the penalty was reduced to rs. 6,500/- by the order dated 7-11-1979.in the meantime, i.e. after the order of the collector of customs, the directorate of enforcement, fera, by its order dated 4-10-1978 sought information from the appellants with regard to the said import which was furnished on 20th december, 1978. thereafter, show cause notice was issued under the provisions of the fera to the appellants on 5-5-1980 to which reply was filed by the appellants on 26th june 1980. the deputy director i.e. respondent no. 2 herein by his order dated 17-2-1981 held that the appellants contravened the provisions of sections 8(3) and 8(4) of the fera, 1973 and, therefore, imposed the penalty of rs. 2,500/- on the appellants. the said order was challenged by the appellants before the fera board in appeal no. 132 of 1981. the fera board by its order dated 28th august 1982 upheld the order of the 2nd respondent imposing the penalty of rs. 2,500/- on the appellants after confirming the finding that there was contravention of the fera provisions viz. sections 8(3) and 8(4) of the fera. the said orders have been challenged in this first appeal.3. mr. divan, the learned counsel appearing on behalf of the appellants, contended that there was no fera violation at all. he submitted that the goods in question were imported under the import licence and the value of the said imported goods was paid through the authorised agents i.e. bank of baroda. he further pointed out that the foreign exchange was acquired for the purpose of import of the aforesaid goods i.e. jolt valves, vibrator valves, squeeze valves and lift valves under the import licence dated 9-8-1972 issued to the appellants and the foreign exchange was utilised for the purpose of the said imports only. secondly, he contended that the lower authorities have not pointed out any contravention with regard to the kind, quality or quantity of the goods which were imported by the appellants for which the foreign exchange was acquired. according to him the letter of credit was opened with the authorised dealer i.e. bank of baroda for the purpose of import of their state-wise goods which were covered by import licence. the particulars of the spare parts which were imported under the said import licence were furnished to the authorised agents, under the provisions of the fera, i.e. bank of baroda who after verifying the same and satisfying themselves had paid value of the imported goods. he further pointed out that the authorities have not been able to show that the goods imported did not conform to either the kind, quality or quantity specified under the import licence for which the foreign exchange was acquired and the payment was made through the authorised agents. he submitted that the customs authority had imposed penalty only because the value of the six items which were imported had exceeded the limit of rs. 5,000/- each which was prescribed under the customs regulations. the goods imported by them were treated as items banned for imports by the calcutta customs as per sl. no. 72 of appendix 3 of am 73 of the policy and, therefore, there was a limit prescribed for the import upto 12/2 % of the value of the licence subject to the condition that the value of each item should not exceed rs. 5,000/-. it was submitted on behalf of the appellants that they had imported only six items of valves, as per the permission but the value of each item exceeded rs. 5,000/- and, therefore, they had to pay penalty under the provisions of the customs act. however, there was no contravention to any of the fera provisions, much less, sub-sections (3) and (4) of section 8 of the fera as the foreign exchange was utilised by the appellants for the purpose for which it was acquired and the goods which were imported were of the kind, quality and quantity specified by them at the time of acquisition of the foreign exchange while opening the letter of credit with the bank of baroda.4. i find substance in the contention raised on behalf of the appellants. the deputy director who imposed the penalty of rs. 2,500/- by his order dated 17-2-1981 has only considered or gone by the order of penalty imposed by the customs authorities and held that the appellants had contravened the provisions of sections 8(3) and 8(4) of the fera without demonstrating how the contravention of the said provisions had taken place. the precise reasoning given by the deputy director is that as the customs authority held that the goods of the balance value of rs. 26,389/- were not covered by the licence and hence imports were unauthorised, it would follow that the foreign exchange valued at rs. 26,389/- granted to telco was utilised for the purpose other than the purpose for which the foreign exchange was granted and, therefore, there was contravention of sections 8(3) and 8(4) of the fera. the said authority has not at all shown in what way there was contravention. from the facts narrated above it is clear that the foreign exchange was acquired for the import of valves and the same was utilised for the import of the said items only and not for any other item. even the appellate authority i.e. fera board, while upholding the order of the deputy director, has not shown in what way there was contravention of the provisions of sections 8(3) and 8(4) of the fera by the appellants. it is not the case of the department that the spare parts imported by the appellants were prohibited. nonetheless, it is not pointed out that the foreign exchange acquired was not utilised for the purpose for which it was acquired. in fact, the foreign exchange was acquired for the import of the valves which alone were imported by the appellants.5. mr. toraskar, the learned agp appearing for the respondents also has not been able to point out as to how the appellants can be said to have contravened the provisions of sections 8(3) and 8(4) of the fera, 1973.6. mr. divan relied on the decision of the supreme court in the case of shanti prasad v. director of enforcement reported in : [1963]2scr297 in which it is held that the provisions under the are quasi-criminal in character and it is the duty of the respondents as prosecutor to make out a case beyond all reasonable doubt that there has been a violation of the law. in this case, as pointed out earlier, the authorities have failed to show the foreign exchange acquired by the appellants was utilised for the purpose other than the one for which it was acquired.7. mr. divan also relied on the decision of the supreme court in the case of hindustan steel ltd. v. state of orissa reported in : [1972]83itr26(sc) in which the supreme court has observed that where there is a technical contravention, the penalty need not be imposed. according to mr. divan in this case the appellants who were holding the import licence to the extent of rs. 20 lakhs had imported spare parts as per the specifications which were given by them, but of the value of rs, 5,600/- instead of rs. 5,000/-. the said imports, however, were made bona fide. the customs authority had only found that the value of the imported items exceeded slightly for which the penalty was already imposed on the appellants. even if there is violation, under the provisions of the customs act, it was only technical for which the appellants had paid penalty under the customs act.8. in any way, since the authorities have not been able to show the contravention of the provisions of the fera, there is no question of imposing penalty on the appellants under fera. the appeal is thus entitled to succeed.8. in the result the appeal, is allowed. the impugned orders of deputy director of enforcement dated 17-2-1981, confirmed by the fera board in appeal no. 132/81 by the order dated 28-8-1982 are hereby quashed and set aside.in the facts and circumstances of the case there will be no order as to costs.