2004 (1) TMI 735 - AT - FEMA

Summary

Issues:
- Appeal against imposition of penalty under section 9(1)(b) of Foreign Exchange Regulation Act, 1973
- Application for dispensation of pre-deposit due to financial difficulties
- Challenge of the quantum of penalty imposed

Analysis:

The appeal before the Appellate Tribunal for Foreign Exchange, New Delhi, challenged the imposition of a penalty of Rs. 24,000 on the appellant for contravening section 9(1)(b) of the Foreign Exchange Regulation Act, 1973. The appellant received Rs. 80,000 in India through an unauthorized channel at the instance of her husband working in Saudi Arabia without requisite permission. The appellant admitted the receipt but claimed it was due to misunderstanding and unawareness of legal provisions. The appellant sought leniency and dispensation of pre-deposit due to financial difficulties, which was granted by the Tribunal as uncontested by the respondents.

The appellant, a teacher earning a modest salary, argued in her appeal that the penalty was unjust considering the circumstances. The respondent did not contest the contravention but argued the penalty was intended to be a deterrent. The Tribunal noted that penalties up to Rs. 4,00,000 could have been imposed, but the Adjudicating Officer imposed Rs. 24,000 after considering all facts. The Tribunal referred to the Hindustan Steel Ltd. case, emphasizing that penalties should not be imposed for technical breaches and must consider all relevant circumstances.

Upon examination, the Tribunal found the appellant's contravention was not deliberate, as she acted out of urgency and ignorance of the law. The appellant's subsequent conduct, immediate admission, and lack of prior adverse notice were considered. The Tribunal concluded that the contravention was venial, or pardonable, and quashed the penalty without disturbing the guilt finding. The Tribunal emphasized the appellant's honest conduct and lack of intention to breach the law, aligning with the principles laid down by the Supreme Court in previous cases.

In light of the above analysis, the Tribunal disposed of the appeal by quashing the penalty while upholding the guilt finding, considering the appellant's mitigating circumstances and lack of deliberate intent to contravene the law.