2005 (2) TMI 916 - AT - FEMA

Summary

Issues:
1. Appeal against adjudication order imposing penalty for contravention of FERA provisions.
2. Substitution of appellant by legal heir due to appellant's demise.
3. Allegations of receiving funds from a person resident outside India and failure to surrender foreign currency.
4. Acceptance of confessional statement as true and voluntary.
5. Reduction of penalty amount due to lack of assurance on the quantum of money involved.
6. Imposition and reduction of penalties for contraventions of FERA provisions.

Analysis:
1. The appeal was filed against an adjudication order imposing a penalty for contravention of sections 9(1)(b) and 8(1) of FERA, 1973. The appellant, now deceased, was substituted by the legal heir. The order allowed for the appeal to be disposed of on merits as per records, with dispensation of pre-deposit granted.

2. The adjudication order was based on an admissional statement where the appellant acknowledged receiving funds from a person resident outside India and failing to surrender foreign currency. The appellant received Rs. 3,00,000 from an unknown person on behalf of a person in Malaysia and used the funds for various purposes, including house construction.

3. Two show cause notices were issued to the appellant regarding the contraventions. The appellant explained the circumstances of receiving Indian currency and failing to surrender Singapore $500, citing urgency and forgetfulness. Adjudication proceedings were held, and the impugned order was passed after an oral hearing.

4. The confessional statement supporting the allegations was not retracted, leading to its acceptance as true and voluntary. However, the quantum of money involved required better assurance for penalty imposition, which was lacking in the record.

5. The contraventions of FERA provisions were affirmed, with the penalty amount reduced due to the lack of assurance on the quantum of money. The penalty was reduced to Rs. 25,000 for contravention of section 9(1)(b) and maintained at Rs. 500 for contravention of section 8(1).

6. The total penalty amount was set at Rs. 25,500 against the appellant. The saving bank account discussed in the order was released for the appellant's use. The appellant was directed to deposit the penalty amount within 45 days, failing which the respondent could recover it from the legal heir.