2008 (6) TMI 639 - AT - FEMA

Summary

Issues:
1. Contravention of provisions of the Foreign Exchange Regulation Act, 1973.
2. Validity of confessional statement and corroborating evidence.
3. Search and seizure procedures.
4. Proof of guilt under sections 8(1) and 8(2) of the FERA.
5. Quantum of penalty imposed.

Analysis:

Issue 1: Contravention of FERA Provisions
The appeal was filed against an Adjudication Order imposing a penalty for contravention of sections 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973. The appellant was found guilty of unauthorized sale and purchase of foreign exchange, leading to the confiscation of seized currencies. The appellant admitted engaging in unauthorized transactions, which formed the basis of the charges.

Issue 2: Validity of Confessional Statement and Corroborating Evidence
The appellant retracted the confessional statement, alleging coercion during its recording. However, the Tribunal found the statement corroborated by recovered documents and currencies. The burden to prove coercion was on the appellant, but no substantial evidence was presented to support this claim. The Tribunal cited legal precedents emphasizing the voluntary nature of confessions and the need for corroboration, concluding that the appellant failed to discharge this burden.

Issue 3: Search and Seizure Procedures
The search and seizure actions were conducted lawfully, with proper documentation and witness signatures. The appellant's challenges to the Panchnama's credibility were dismissed, as minor discrepancies in witness statements did not undermine the overall legality of the process. The Tribunal found the search and seizure actions in accordance with the law and dismissed the appellant's objections.

Issue 4: Proof of Guilt under FERA Sections
The Tribunal upheld the charges under sections 8(1) and 8(2) of the FERA, emphasizing the importance of preventing economic offenses that threaten national interests. The Tribunal highlighted that while proof beyond reasonable doubt is required, absolute precision is not necessary. The appellant's guilt was established based on the confessional statement, corroborating evidence, and circumstantial factors, leading to the dismissal of the appeal.

Issue 5: Quantum of Penalty Imposed
The Tribunal considered the gravity of the evidence and the appellant's plea for mercy due to being a senior citizen. Despite the confiscation of foreign exchange, the penalty amount was deemed commensurate with the offense. The Tribunal confirmed the penalty and directed the appellant to pay the balance amount within a specified timeframe, failing which legal action would be taken.

In conclusion, the Tribunal dismissed the appeal, finding the impugned order valid and the penalty justified based on the established contraventions of FERA provisions.