2001 (8) TMI 1456 - AT - FEMA

Summary

Issues:
1. Appeal against Adjudication Order for contravening FERA
2. Application for amending memorandum of appeal and condonation of delay
3. Alleged violations involving seized currency and cheques
4. Evidence of foreign exchange transactions and penalty imposition
5. Calculation errors in determining penalty amount

Analysis:
1. The appeal was filed against an Adjudication Order imposing a penalty for contravening section 8(1) of FERA. The appellant, who had passed away, sought to amend the memorandum of appeal through his widow and guardian of minor children. However, the proposed amendments were not pressed by the appellant's counsel, who chose to argue the appeal on its merits.

2. The appellant's counsel argued that the seized currency and cheques did not involve foreign exchange violations. The cheques were encashed in Indian rupees, and there was no evidence of foreign currency transactions by the appellant. The counsel contended that the penalty imposed was excessive.

3. The respondent submitted that the impugned order was supported by evidence, including seized documents indicating foreign exchange transactions. The appellant's failure to explain the seized documents and transactions raised suspicions. The respondent highlighted the applicability of section 72 of FERA and the burden of proof on the appellant.

4. The Tribunal carefully considered the submissions and evidence. The seized documents revealed foreign currency transactions, and the appellant's refusal to explain raised adverse inferences. The appellant's involvement in foreign exchange dealings was evident from the seized materials, leading to the conclusion that he contravened FERA.

5. The Tribunal reviewed the calculation of the penalty amount imposed by the respondents. Errors were found in including certain amounts related to cheques not directly involving the appellant. The duplication of figures in seized documents also led to discrepancies in the penalty calculation. Consequently, the Tribunal reduced the penalty from Rs. 5 lakhs to Rs. 1,60,000, aligning it with the value of illegal transactions. The adjustment of the seized Indian currency against the reduced penalty amount was directed for due payment.

In summary, the appeal was partly allowed, modifying the impugned order to reduce the penalty amount based on the discrepancies in the calculation of illegal transactions and excluding certain amounts not directly linked to the appellant's violations.