2000 (1) TMI 1033 - AT - FEMA

Summary

Issues:
1. Imposition of penalty for contravention of foreign exchange regulations.
2. Application for condonation of delay in filing the appeal.
3. Determination of legal status as a person resident in India.
4. Interpretation of provisions regarding repatriation of foreign exchange.
5. Applicability of notifications on maintaining foreign accounts by foreign citizens.
6. Quantum of penalty imposed.

Analysis:

1. The appellant appealed against an Adjudication Order imposing a penalty of Rs. 5 lakhs for contravention of foreign exchange regulations. The appellant complied with the directive to close foreign bank accounts and repatriate the funds but contested the penalty imposition, leading to the appeal.

2. The appellant filed an application for condonation of delay in filing the appeal, which was contested by the respondent. The Board entertained the application, considering the circumstances and the appellant's compliance with depositing the penalty amount, ultimately deciding to hear the appeal on merits.

3. The adjudication proceedings were based on the appellant's status as a person resident in India, following a Show Cause Notice regarding funds held in foreign accounts. The appellant's Malaysian origin, stay in India, and expired passport were central to the determination of his legal status.

4. The appellant was found guilty of contravening regulations requiring repatriation of foreign exchange upon becoming a resident in India. The adjudicating officer concluded that the appellant's continued stay in India and retention of foreign funds constituted a violation of the regulations.

5. The appellant's argument challenging the applicability of notifications on maintaining foreign accounts as a foreign citizen residing in India was refuted. The Board emphasized the notification's provisions deeming a person of Indian origin staying in India as permanently resident, thus subjecting the appellant to the regulations.

6. Regarding the quantum of penalty, the appellant's counsel argued for leniency citing lack of awareness of Indian regulations and subsequent repatriation of funds. The Board considered factors like willful violation, ignorance of the law, and the substantial amount involved before upholding the penalty of Rs. 5 lakhs, in line with statutory norms.

In conclusion, the appeal was dismissed, affirming the penalty imposed, with the deposited amount being treated as compliance with the order. The judgment extensively analyzed the appellant's legal status, compliance with foreign exchange regulations, and the applicability of notifications, ultimately upholding the penalty based on established legal principles and factual circumstances.