2004 (1) TMI 736 - AT - FEMA

Summary

Issues:
Violation of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973.
Validity of the penalty imposed.
Allegations of illegality or impropriety in the findings and orders of penalty.

Detailed Analysis:
Issue 1: The appellant challenged the orders of the Adjudicating Officer under section 51 of the Foreign Exchange Regulation Act, 1973, for contravention of section 9(1)(b) of the Act. The charge was that the appellant, a resident in India, received payments of Rs. 73,50,000 from individuals in India for the sale proceeds of imported cars on behalf of his brother-in-law, an Indian citizen residing in Sharjah. The Adjudicating Officer found the appellant guilty based on statements and documents, leading to a penalty of Rs. 3,00,000. The appellant argued that the Enforcement Directorate failed to establish the charge and that the penalty was excessive. However, the Tribunal found the evidence sufficient to establish the violation of section 9(1)(b) by the appellant, as payments were received without proper authorization or exemption.

Issue 2: The appellant contested the penalty imposed, seeking a lenient view. The Adjudicating Officer had already invoked leniency in the penalty, but the Tribunal, considering mens rea, reduced the penalty to Rs. 1,50,000, adjusting a previous deposit of Rs. 60,000 towards the penalty. The Tribunal upheld the findings of guilt but modified the penalty amount based on the circumstances and arguments presented during the appeal.

Issue 3: The appellant alleged illegality and impropriety in the findings and orders of penalty, claiming that the investigation was primarily conducted by Central Excise officers and not under FERA provisions. The appellant also argued that the statements recorded were retracted and obtained under coercion. However, the Tribunal found no illegality or infirmity in the Adjudicating Officer's appreciation of evidence. The Tribunal concluded that the evidence, including statements and documents, convincingly established the violation of section 9(1)(b) by the appellant, leading to the affirmation of the guilty verdict and the modification of the penalty amount.

In conclusion, the Tribunal partly allowed the appeal, sustaining the findings of guilt but reducing the penalty to Rs. 1,50,000. The Tribunal emphasized the importance of evidence, rejected claims of illegality or impropriety, and upheld the Adjudicating Officer's decision regarding the violation of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973.