2009 (9) TMI 1080 - AT - FEMA

Summary

Issues:
Violation of provisions of section 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973 leading to penalty imposition.

Detailed Analysis:

Issue 1: Violation of FERA Provisions
The appeal was filed against an Adjudication Order imposing a penalty for contravention of section 9(1)(b) and 9(1)(d) of FERA. The appellant, along with a co-noticee, was found involved in a transaction where Indian currency was recovered, indicating a violation of FERA. The appellant was located and admitted to making payments as per the transaction details provided by the co-noticee. The appellant contested the confessional statements, claiming they were obtained under coercion and were not voluntary.

Issue 2: Legal Position of FERA Sections
Sections 9(1)(b) and 9(1)(d) of FERA prohibit receiving or making payments without authorization from RBI in cases involving persons resident outside India. The burden of proving coercion in the confessional statement rested on the appellant, as per legal precedents. The Supreme Court rulings highlighted the importance of voluntary and corroborated confessions in such cases.

Issue 3: Evaluation of Confessional Statement
The confessional statement of the appellant, recorded in 1992, detailed the transactions and payments made, implicating the appellant in the violation of FERA provisions. The appellant's claim of coercion lacked substantial evidence or timely retraction, leading to the conclusion that the statement was voluntary and truthful. The circumstantial evidence, including the involvement of a person residing outside India, supported the confessional statement.

Issue 4: Penalty and Judicial Scrutiny
After considering the evidence and circumstances, the Tribunal concluded that the appellant was rightly held guilty of contravening FERA sections. The quantum of penalty imposed was deemed appropriate and in line with the seriousness of the offense. The Tribunal upheld the impugned order, dismissing the appeal for lack of merit. The predeposited amount was to be appropriated towards the penalty, confirming the validity of the penalty imposition.

In conclusion, the Tribunal found the appellant guilty of violating FERA provisions, emphasizing the importance of voluntary confessions and the burden of proof in coercion claims. The penalty imposed was considered justified, and the appeal was dismissed, affirming the initial order.