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Issues:
Interpretation of the term "person resident outside India" under the Foreign Exchange Regulation Act, 1973. Analysis: The civil miscellaneous appeal was filed by the Union of India challenging the order of the Appellate Board that set aside a penalty imposed on the respondent for contravening section 9(1)(a) of the Act by making a payment to Justus Thomas. The central issue was whether Justus Thomas qualified as a "person resident outside India" as per the Act. The appellant argued that as per the Act, a citizen of India staying outside India for business or vocation qualifies as a person resident outside India. The respondent contended that on the date of payment, Justus Thomas was in India, thus not meeting the criteria. The court analyzed the evidence, including a statement by the respondent admitting to giving a loan to Justus Thomas, whom he met during business visits to Muscat. The court noted that prior to January 18, 1978, Justus Thomas was a resident outside India, meeting the criteria of a person resident outside India as per the Act. The court emphasized the importance of sections 2(p) and 2(q) of the Act in determining residency status. The court rejected the Appellate Board's reasoning based on the nature of Justus Thomas's bank account, stating that the type of account alone does not determine residency status. The court highlighted that the respondent's statement provided clarity on Justus Thomas's residency status. Additionally, the court dismissed the respondent's plea for a reduction in the penalty, noting that no such request was made during the appeal. In conclusion, the court set aside the Appellate Board's order and reinstated the penalty imposed by the first authority. The civil miscellaneous appeal was allowed with costs, emphasizing the correct interpretation of the term "person resident outside India" under the Act.
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