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Issues:
Violation of section 8(1) of the Foreign Exchange Regulation Act, 1973 - Contravention of FERA provisions - Penalty imposition - Confiscation of foreign exchange - Appeal against Adjudication Order - Possession vs. Acquisition of foreign currency. Analysis: The judgment pertains to an appeal against an Adjudication Order imposing a penalty for contravention of section 8(1) of the Foreign Exchange Regulation Act, 1973. The appellant was penalized for allegedly acquiring US $2,000 without prior RBI permission. The appellant had already deposited the penalty amount, leading to the disposal of the appeal on merit. The adjudication stemmed from a search at the appellant's business premises where US $2,000 was seized from the appellant. The appellant explained that the currency was left by his son for his wife and daughter's travel expenses. The appellant requested the return of the seized amount, citing it was gifted by his sons for travel purposes. The appellant's counsel argued that the appellant did not acquire the foreign exchange but held it in trust for his family's travel expenses. The counsel contended that even if a technical violation occurred, it did not warrant the penalty imposed. The appellant's explanation was supported by evidence of air tickets for his family's travel. The counsel also challenged the confiscation, highlighting the lawful remittance of foreign exchange by the appellant's son for share purchase, indicating no illicit activities. The respondent argued that the Adjudicating Officer found the appellant guilty after considering the charge and the appellant's explanation. However, the judgment noted that the seized documents were not relied upon, suggesting their non-incriminating nature. The appellant's letter requesting the return of the seized amount was considered as an attempt to address the violation highlighted during interrogation. The judgment emphasized that mere possession of foreign currency, even if conscious, does not equate to acquisition under section 8(1). The judgment critiqued the Adjudicating Officer's reliance on the appellant's conscious possession of foreign currency as proof of acquisition. It highlighted that the possession alone does not establish acquisition. The judgment referenced legal precedents to support the argument that a plea of guilt does not automatically establish contravention. Ultimately, the judgment allowed the appeal, setting aside the penalty and confiscation. The respondents were directed to refund the penalty amount and convert the seized foreign currency into Indian currency for the appellant within 45 days.
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