2004 (10) TMI 644 - AT - FEMA

Summary

Issues:
1. Challenge against Adjudication order imposing a penalty for contravention of Foreign Exchange Regulation Act.
2. Lack of evidence in the impugned order.
3. Allegations of clandestine payments and debt acknowledgment.
4. Interpretation of human conduct and judicial notice.
5. Appeal for quashing the impugned order and return of the pre-deposit amount.

Detailed Analysis:
1. The appellant challenged an Adjudication order imposing a penalty for contravention of the Foreign Exchange Regulation Act. The order alleged that the appellant acknowledged receipt of bank drafts from foreign residents, leading to the penalty. The appeal was heard on merits for final disposal.

2. The appellant's counsel argued that the impugned order lacked substantial evidence and was based on imagination and surmises. The order suggested that the appellant must have acknowledged a debt to the foreign donors, which the counsel contended was unfounded. Reference was made to previous judgments to support the argument against the lack of evidence.

3. The respondent's argument centered around the allegation of clandestine payments and debt acknowledgment by the appellant. It was contended that the appellant, not related to the donors, could not have received the amounts as gifts, leading to suspicions of repayment acknowledgment. The involvement of the appellant's father in the gift arrangement was also raised before the adjudicating authority.

4. The discussion delved into the interpretation of human conduct and the need for judicial notice in such cases. The basis of the impugned order was scrutinized, emphasizing the lack of commitment or debt acknowledgment in the circumstances of receiving gifts from unrelated foreign donors.

5. The Appellate Tribunal, after detailed analysis, quashed the impugned order and allowed the appeal. The lack of evidence against the appellant and the insufficiency of suspicions to pass an adverse order were highlighted. The order directed the return of the pre-deposit amount to the appellant within a specified timeframe, concluding the matter in favor of the appellant.