2019 (8) TMI 134 - AT - FEMA

Receipt of payments under the instructions of a person resident outside India - delay in issuance of SCN - Validity of confession - HELD THAT - The statement recorded from the appellant does not contain any admission/confession and instead contains clear denial of any involvement in the case. The issuance of the show cause notice and the findings of guilt solely basing on the discrepancy in the travel details of the appellant is unsustainable. The appellant was in India as per pass-port details produced by the respondent. The appellant has also failed to produce his pass-port when his counsel was asked who only stated now that the same is not traceable. Therefore, presumption is that he may be the same person as alleged by the respondent - It is stated that he is a poor old man and suffering from Parkinson Diseases and showing symptoms of Alzheimer‟s Diseases. He has also loss memory. The delay in issuing the show cause notice running into ten years without any valid reason for modification of order. The said long delay is unexplained in issuing the show cause notice. No explaination is given during the course of hearing - The customs authorities did not initiate any proceedings against the appellant after the receipt of a reply submitted by the appellant. It is also a matter of fact that the Customs as well as the Enforcement had searched his residential premises, nothing was seized therefrom. The appeal is disposed of with the direction that the 25% of the penalty amount already deposited by order dated 31.07.2017 i.e. a sum of ₹ 5 Lakhs shall appropriated by the respondent and a full and final penalty amount in view critical condition and bad health of the appellant - appeal disposed off.

Issues Involved:
1. Legality of the search and seizure conducted by the Central Excise and Customs Commissionerate.
2. Examination and admissibility of statements and documents seized.
3. Identification and involvement of the appellant in the alleged illegal activities.
4. Delay in issuing the show cause notice and its implications.
5. Health condition of the appellant and its impact on the case.
6. Appropriateness of the penalty imposed.

Detailed Analysis:

1. Legality of the Search and Seizure:
The search conducted on 18.08.2001 at the residence of an individual in Malappuram district resulted in the seizure of 38 gold biscuits, Indian and foreign currency, and incriminating documents. The Directorate of Enforcement took over the documents from Customs under Section 37 of FEMA, 1999, read with Section 132A of the Income Tax Act on 01.05.2002.

2. Examination and Admissibility of Statements and Documents Seized:
Statements from various individuals, including employees and relatives of the searched individual, were recorded under Section 108 of the Customs Act and Section 37 of FEMA. These statements indicated involvement in compensatory payments and gold business. The seized documents included email and fax messages from the UAE, which were used as evidence of illegal transactions.

3. Identification and Involvement of the Appellant:
The appellant's involvement was inferred from the seized documents indicating receipt of payments during July-August 2001. However, the appellant denied any dealings with the individual from whose residence the documents were seized. The appellant argued that the name "Moidu Haji Annara" in the documents did not specifically identify him, as it lacked further personal details.

4. Delay in Issuing the Show Cause Notice:
The Enforcement Directorate recorded the appellant’s statement on 29.04.2003, but the complaint was filed on 04.12.2012, with the show cause notice issued on 04.01.2013. The appellant contended that the ten-year delay was unexplained and led to a bona fide belief that proceedings had been dropped. The Tribunal noted this significant delay and the lack of further investigation after the initial statement.

5. Health Condition of the Appellant:
The appellant's health condition, including suffering from Parkinson’s and Alzheimer’s diseases, was considered. The Tribunal acknowledged the appellant's deteriorating health and the impact it had on his ability to defend himself.

6. Appropriateness of the Penalty Imposed:
The Tribunal noted that the Customs authorities did not proceed against the appellant after his reply, and nothing was seized from his residence. Given the appellant's critical health condition and the unexplained delay, the Tribunal decided to reduce the penalty. The appellant had already deposited ?5 Lakhs as directed on 31.07.2017, which was appropriated as the full and final penalty.

Conclusion:
The appeal was disposed of with the direction that the ?5 Lakhs already deposited by the appellant would be considered the full and final penalty amount. The Tribunal took into account the appellant's health and the procedural delays in reaching this decision. No costs were awarded.

Separate Judgments:
No separate judgments were delivered by different judges in this case.

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