2009 (1) TMI 950 - AT - FEMA

Summary

Issues:
Violation of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 - Penalty imposed for receiving payments from abroad without RBI permission - Retraction of confessional statement - Cross-examination of witness denied - Amount of penalty imposed - Request for leniency.

Analysis:

1. The appeal was filed against an Adjudication Order imposing a penalty for contravening section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 by receiving payments from abroad without RBI permission. The appellant, Pukhraj Ganeshmal Jain, admitted receiving Rs. 12,00,000 in cash from unknown persons under instructions from Dubai. The appellant contested the order, claiming coercion in his confessional statement and seeking cross-examination of a witness.

2. The appellant's association with A.N. Abdul Rehman was established through seized documents and statements. The appellant's retraction of the statement was challenged, citing lack of evidence of coercion. The burden of proof regarding the alleged coercion rested on the appellant, which was not satisfactorily discharged. The Supreme Court's precedent emphasized the need for voluntary and corroborated confessions.

3. A.N. Abdul Rehman's detailed statements and the appellant's admission of receiving cash for making jewelry corroborated the charges. The appellant's retraction was deemed an afterthought without basis. The appellant failed to explain the incriminating evidence linking him to the illegal payments.

4. The denial of cross-examination of A.N. Abdul Rehman was justified under established legal principles. Refusal of cross-examination was not considered a violation of natural justice, as per Supreme Court rulings. The appellant's contention regarding the lack of cross-examination opportunity was dismissed.

5. The appellant was found guilty of receiving payments from abroad without RBI permission, leading to the imposition of a penalty of Rs. 1,80,000. Considering the circumstances, the penalty was reduced to Rs. 1,50,000 to balance justice. The appellant was directed to pay the remaining penalty amount within 15 days to avoid further legal action.

This judgment highlights the importance of voluntary and corroborated confessions, burden of proof in coercion claims, and the discretion of authorities in denying cross-examination. The penalty amount was adjusted based on the circumstances and the appellant's request for leniency, emphasizing the need for compliance with foreign exchange regulations.