2008 (6) TMI 645 - AT - FEMA

Summary

Issues:
- Appeal against adjudication order imposing penalty for contravention of FER Act
- Retraction of admissional statement by the appellant
- Burden of proof in adjudication proceedings
- Contravention of Sections 9(1)(b) and 9(3) of FER Act

Analysis:

The Appellate Tribunal for Foreign Exchange heard an appeal against an adjudication order imposing penalties for contravention of the Foreign Exchange Regulation Act (FER Act). The penalties were imposed for contravention of Section 9(3) and Section 9(1)(b) of the FER Act. The appellant was alleged to have paid foreign currency to a non-resident person and received money from a non-resident person in India. The penalty amount was appropriated from the recovered currency, eliminating the need for pre-deposit of penalty. The Tribunal proceeded to dispose of the appeal on merits.

The appellant admitted to receiving Indian currency and making a statement regarding the source of the funds. However, the appellant later retracted the admissional statement, alleging threat and coercion. The Enforcement Directorate issued Show Cause Notices to the appellant, who replied before the adjudication proceedings were held, leading to the impugned order.

Despite the appellant's father claiming ownership of the recovered money, his non-examination did not impact the case significantly. The retraction of the admissional statement after 37 days and the lack of evidence supporting the alleged threat and coercion weakened the appellant's contentions. The Tribunal cited legal precedents emphasizing the voluntary nature of statements made before enforcement authorities.

The Tribunal highlighted the burden of proof in adjudication proceedings, citing legal principles regarding proof in criminal or quasi-criminal cases. The burden lies on the Department to prove contraventions, with the prosecution not required to establish its case with absolute certainty. The Tribunal emphasized the importance of establishing facts beyond a reasonable doubt.

Ultimately, the Tribunal found no merit in the appeal and upheld the impugned order, confirming the penalties imposed for contravention of Sections 9(1)(b) and 9(3) of the FER Act. The appeal was dismissed, and the order was passed accordingly, consigning the appeal to records.