2008 (12) TMI 840 - AT - FEMA

Summary

Issues Involved:
1. Contravention of Sections 9(1)(b) and 16(1)(a) of the Foreign Exchange Regulation Act (FERA), 1973.
2. Validity of confessional statements.
3. Quantum of penalty imposed.
4. Applicability of Section 72 of the FERA.
5. Liability of partnership firm versus individual partner.

Issue-wise Detailed Analysis:

1. Contravention of Sections 9(1)(b) and 16(1)(a) of the FERA, 1973:
The appellants were charged with receiving payments from Paris on behalf of a person resident outside India without the permission of the Reserve Bank of India (RBI), as per Section 9(1)(b) of the FERA. Additionally, they were charged under Section 16(1)(a) for failing to receive payments amounting to Rs. 5,62,392 from abroad. The evidence revealed that M/s. Anbu Textiles exported goods to Paris, under-invoiced the goods, and received the differential amount through unauthorized channels. The appellants were found guilty by the Adjudicating Officer for these contraventions.

2. Validity of Confessional Statements:
The appellants argued that their confessional statements were obtained under threat and coercion and should not be considered. However, the Tribunal noted that the burden of proving coercion was on the appellants, which they failed to discharge. The statements were detailed and corroborated by other evidence, including the statements of K. Thirugnanasambandam and the seized documents. The Tribunal cited Supreme Court rulings, emphasizing that retracted confessional statements could still be valid if corroborated by other evidence.

3. Quantum of Penalty Imposed:
The penalties imposed were Rs. 1,00,000 against M/s. Anbu Textiles, Rs. 50,000 against K. Sadasivam, Rs. 1,00,000 against Mohan, and Rs. 2,50,000 against K. Sadasivam for various contraventions. The Tribunal found the penalties to be commensurate with the violations and not excessive. The pre-deposited amounts were to be appropriated towards the penalties, and the appellants were directed to pay the balance within 15 days.

4. Applicability of Section 72 of the FERA:
Section 72 of the FERA allows the court to presume the contents of seized documents as true. The Tribunal found that the documents seized from M/s. Shamina Deluxe Theatre and explained by K. Thirugnanasambandam were sufficient to prove the charges against the appellants. The nexus between the appellants and the seized documents was established, and the Tribunal rejected the argument that the documents could not be read against the appellants.

5. Liability of Partnership Firm versus Individual Partner:
The Tribunal referred to the ruling of the Hon'ble High Court of Kolkata in Tarak Nath Sen v. Union of India, which stated that a partnership firm is a compendium name of its partners, and both cannot be held guilty for the same contravention simultaneously. Therefore, the Tribunal decided to absolve M/s. Anbu Textiles from any penalty for the charges and to realize the penalty amount only from the partner, K. Sadasivam.

Conclusion:
The appeals were partly allowed concerning the penalty against M/s. Anbu Textiles, but the other penalties were upheld. The Tribunal directed the appellants to deposit the balance amount of the penalty within 15 days, failing which recovery would be initiated as per the law. The Tribunal found no error in the impugned order and sustained it, emphasizing the gravity of the offenses and the sufficiency of the evidence against the appellants.