2005 (11) TMI 475 - HC - FEMA

Summary

Issues Involved:
1. Maintainability of the appeal under Section 54 of FERA.
2. Validity of proceedings before the Appellate Tribunal for Foreign Exchange under Section 52(4) of FERA.
3. Merits of the Adjudicating Authority's decision exonerating the respondent under Section 8(1) of FERA.
4. Proper appreciation of evidence and material on record.
5. Alleged forgery of Currency Declaration Forms (CDFs) by the respondent.
6. Onus of proof regarding the source of foreign exchange deposited in India.

Detailed Analysis:

1. Maintainability of the Appeal:
The respondent contended that the appeal under Section 54 of FERA was not maintainable as it lies only on questions of law, and the proceedings in revision before the Appellate Tribunal were misconceived and filed almost a year after the Adjudicating Authority's order. The court held that the appeal involved questions of law that needed to be considered, citing that the High Court has the power to set aside perverse concurrent findings of fact even if reached by two Courts or Tribunals.

2. Validity of Proceedings Before the Appellate Tribunal:
The respondent argued that the proceedings before the Appellate Tribunal were not maintainable under Section 52(4) of FERA or were time-barred. The court disagreed, stating that the Appellate Tribunal rightly entertained the proceedings under Section 52(4) of FERA.

3. Merits of the Adjudicating Authority's Decision:
The Adjudicating Authority had exonerated the respondent of charges under Section 8(1) of FERA, accepting the respondent's claim that the foreign exchange deposited in the Oriental Bank of Commerce was lawfully acquired in the UK and brought to India. The court found this decision to be based on an improper appreciation of evidence and material on record.

4. Proper Appreciation of Evidence:
The court noted that the Adjudicating Authority's decision was not based on a correct and proper appreciation of evidence. The Adjudicating Authority accepted the respondent's claims without adequate inquiry into the existence of the company (Bryan Investment Corporation, UK) or the legality of the remittance according to UK laws.

5. Alleged Forgery of Currency Declaration Forms (CDFs):
The Enforcement Directorate alleged that the respondent forged 8 CDFs by interpolating figures and words to inflate the amount of foreign exchange declared. The court found that forgery was committed by the respondent in the CDFs, which indicated that the foreign currency deposited was in far excess of what was brought into India.

6. Onus of Proof:
The court emphasized that the onus to prove the source of the excess foreign exchange lay on the respondent by virtue of Section 71 of FERA. The respondent's attempt to account for the excess currency by producing a fax message from a purported treasurer of Bryan Investment Corporation was taken at face value without proper inquiry.

Conclusion:
The court concluded that the orders of the Appellate Tribunal and the Adjudicating Authority resulted in a miscarriage of justice. Therefore, the matter was remanded back to the Adjudicating Authority for fresh consideration and decision in accordance with law, after affording the parties due opportunity to present their case. The Adjudicating Authority was directed to make a fresh decision expeditiously, preferably within six months. The appeal was allowed and disposed of accordingly.