2018 (12) TMI 444 - AT - FEMA

Contravention of FERA underhand foreign exchange - Loose sheets found in the house of the main accused Shri Darshan Singh and the statement of the appellant - Held that - There is no evidence to that effect on record. In fact, the appellant in his statement before the DRI and which finds a mention in the impugned order has not stated that the alleged Darshan Singh was in any way involved in foreign exchange transactions. The so-called loose sheets recovered from the residence of Shri Darshan Singh does not establish that the appellant had received or given any money in contravention of FERA. There are no statements or any other evidence which has been produced by the adjudicating authority to prove the involvement of the appellant in receipt or making payments of foreign exchange. Holding of Indian currency or dealing with it is not a crime and if there is a violation of any other law like the income tax etc. that would be dealt with by the respective authorities. The appeal is accordingly allowed.

Summary

Issues involved:
- Alleged contravention of Sections 9(1)(b) and 9(1)(d) of FERA, 1973
- Violation of principles of natural justice
- Retraction of statement under duress
- Reliance on seized loose sheets as evidence
- Lack of incriminating evidence against the appellant
- Rejection of request for cross-examination
- Failure to establish foreign exchange dealings
- Applicability of judgments cited by both parties

Analysis:

Alleged contravention of FERA provisions:
The case involved an appeal against an adjudication order alleging contravention of Sections 9(1)(b) and 9(1)(d) of FERA, 1973 by making payments to individuals resident in India on instructions from a person residing outside India. The appellant, Shri Inder Vijay Singh, was accused of contravening Section 9(1)(d) by making payments based on instructions from a person outside India. The case was primarily based on statements given before the DRI under the Customs Act.

Violation of principles of natural justice:
The appellant raised concerns regarding the violation of principles of natural justice, claiming they were not heard by the adjudicating authority and their request for cross-examination was rejected. However, the respondent argued that principles of natural justice were followed, as evidenced by the records of hearing notices received by the appellant.

Retraction of statement and reliance on seized evidence:
The appellant contended that their statement was made under duress and retracted before the Competent Authority, which was not addressed by the adjudicating authority. The case heavily relied on loose sheets seized from the residence of the main accused, but the appellant argued that no incriminating evidence was found to implicate them in the alleged contravention.

Lack of incriminating evidence:
Upon examination of the case records and hearing both parties, the tribunal found that the adjudication order lacked substantial evidence linking the appellant to foreign exchange dealings. The order failed to establish any relationship between the appellant and the individuals involved in the alleged transactions, casting doubt on the validity of the accusations.

Rejection of cross-examination and legal judgments:
The respondent defended the rejection of the appellant's request for cross-examination, citing the appellant's non-appearance at scheduled hearings. Both parties relied on legal judgments to support their arguments, highlighting the importance of procedural fairness and evidentiary standards in such cases.

Decision and conclusion:
After careful examination, the tribunal concluded that there was no merit in the adjudication order concerning the appellant. The lack of evidence linking the appellant to foreign exchange transactions led to the setting aside of the order and the allowance of the appeal. Consequently, the issues of natural justice and cited legal judgments were deemed unnecessary for further consideration.

In summary, the judgment focused on the insufficiency of evidence to prove the appellant's involvement in foreign exchange contraventions, leading to the appeal's success based on the lack of incriminating proof against the appellant.