9911796707
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Issues:
1. Imposition of penalty for failure to furnish evidentiary proof of utilization of foreign exchange. 2. Violation of principle of natural justice in passing the impugned order. 3. Failure to provide evidentiary proof of import or utilization of foreign exchange. 4. Interpretation and application of sections 8(3) and 8(4) of FER Act, 1973. 5. Burden of proof on the person acquiring foreign exchange. 6. Dismissal of appeals due to lack of merit. Detailed Analysis: 1. The Appellate Tribunal for Foreign Exchange heard appeals against an adjudication order imposing a penalty on the appellants for not providing evidence of utilizing foreign exchange acquired and remitted, contravening sections 8(3) and 8(4) of the FER Act, 1973. The appellants did not take steps to prosecute the appeals initially but later requested disposal on merit. The Tribunal considered the provisions of FEMA 1999 requiring appeals to be disposed of within 180 days and granted full dispensation to hear the appeals. 2. The appellants argued that the impugned order violated the principles of natural justice by not allowing cross-examination of witnesses and wrongly attributing the foreign exchange remitted abroad to the individual appellant, who opened the Letter of Credit (L/C), instead of the actual users of the imports. The Tribunal considered these contentions alongside the respondent's argument that the appellants failed to provide evidence of import or utilization of the foreign exchange as required by law. 3. The respondent contended that although the individual appellant opened the L/C for importing copper scrap, the actual users were different parties, and no evidence was presented to show the proper utilization of the remitted foreign exchange. It was highlighted that the appellants did not inquire about non-shipment of goods or take steps to repatriate the funds transferred through the L/C to the foreign importer, leading to a clear contravention under sections 8(3) and 8(4) of the FER Act, 1973. 4. The Tribunal analyzed sections 8(3) and 8(4) of the FER Act, 1973, emphasizing the legal obligation on individuals acquiring foreign exchange to use it for the intended purpose or surrender it within the specified time. It noted that the burden of proof lies with the person prosecuted for contravention, requiring them to demonstrate the proper use of the foreign exchange. In this case, the appellants failed to provide any evidentiary proof of utilizing the foreign exchange, leading to the presumption that it was not used for the intended purpose. 5. As per section 71(2) of the FER Act, the burden of proof rested on the appellants to show the lawful utilization of the foreign exchange, which they failed to do. The Tribunal concluded that the appellants did not present any material to discharge their statutory burden or rebut the adverse presumption under section 8(4) of the Act. Consequently, the impugned order was upheld as the appellants could not demonstrate the proper utilization of the foreign exchange. 6. Ultimately, the appeals were dismissed for lacking merit, and the appellants were given seven days to deposit the respective penalty amounts. Failure to comply would result in the Enforcement Directorate recovering the penalties in accordance with the law.
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