1999 (2) TMI 730 - AT - FEMA

Summary

Issues:
- Appeal against imposition of penalty under section 9(1)(f)(i) of the Foreign Exchange Regulation Act, 1973.
- Appellant's plea for reduction or waiver of penalty amount.
- Department's submission regarding penalty reduction.
- Determination of penalty amount by the Appellate Tribunal.

Analysis:
The judgment of the Appellate Tribunal pertains to an appeal against the imposition of a penalty under section 9(1)(f)(i) of the Foreign Exchange Regulation Act, 1973. The appellant was penalized for allegedly contravening the Act by paying a sum to an individual in consideration of the receipt of foreign currency. The appellant's counsel, Shri S.C. Puri, acknowledged the contravention but pleaded for a reduction or waiver of the penalty amount. He argued that the appellant had already faced a criminal trial and paid a substantial fine, making further penalties unjust. Shri Puri contended that the appellant was used by others due to financial constraints, and the real beneficiaries should be held accountable instead.

In response, the department's representative, Shri A.C. Singh, did not contest the contravention finding and agreed to a reduction in the penalty amount. However, he advocated for maintaining a reasonable penalty, opposing a complete waiver. The Appellate Tribunal, chaired by Sarvesh Chandra, considered the submissions of both parties. While upholding the contravention finding, the Tribunal acknowledged the excessive nature of the original penalty amount of Rs. 2,50,000, given the circumstances and the nominal sum involved in the contravention. The Tribunal noted that the appellant had already faced significant consequences through the criminal trial and imposed a reduced penalty of Rs. 6,400, approximately 10% of the contravened amount. This decision aimed to balance the need for penalty with the appellant's previous punishment and financial situation, ensuring justice was served.

In conclusion, the appeal was partly allowed, affirming the contravention finding but reducing the penalty amount significantly. The appellant was directed to pay the reduced penalty within 15 days. The judgment exemplifies the Tribunal's discretion in determining penalties based on the specific facts and equities of each case, ensuring a fair and proportionate outcome.