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1999 (9) TMI 1012 - AT - FEMA

Issues:
1. Appeal against penalty and confiscation under Foreign Exchange Regulation Act, 1973.
2. Allegations of contravention of section 9(1)(b) of the Act.
3. Disclosure of facts in the Show Cause Notice (SCN).
4. Interpretation of the appellant's statements and actions.
5. Legal implications of receiving payments from non-residents.
6. Validity of the adjudicating officer's findings.
7. Justification for penalty and confiscation orders.

Detailed Analysis:

1. The appeal challenged an adjudication order imposing a penalty of Rs. 17,000 and confiscating Rs. 1,70,000 under the Foreign Exchange Regulation Act, 1973. The appellant had already paid the penalty amount. The appeal was heard on its merits.

2. The adjudication proceedings were initiated based on an SCN alleging that the appellant received Rs. 1,70,000 from a local person on behalf of a non-resident, which was a contravention of section 9(1)(b) of the Act. Evidence included statements and seizures related to the transactions involving the appellant and the non-resident.

3. The impugned SCN lacked specific details on how the appellant contravened section 9(1)(b). The department relied on information regarding a payment from a non-resident to the local person, leading to the appellant receiving a portion of that amount. However, discrepancies in the statements and actions of the individuals involved raised doubts.

4. The appellant's statements indicated that he received the amount in question based on prior transactions with the non-resident, where a balance was promised and subsequently paid. The appellant's actions were in line with the terms of the transactions, and the adjudicating officer's interpretation was challenged by the appellant's counsel.

5. Legal analysis focused on whether the appellant received the amount on behalf of the non-resident or as a due payment. The judgment emphasized that receiving a payment from a non-resident does not automatically imply acting on their behalf. The key issue was whether the appellant received the amount on his own behalf or as an agent of the non-resident.

6. The appellant's counsel argued that the incriminating portions of the statements were false and contested the findings of the adjudicating officer. The judgment highlighted discrepancies in the evidence and concluded that the charge under section 9(1)(b) could not be sustained based on the department's allegations.

7. Ultimately, the judgment allowed the appeal, setting aside the penalty and confiscation orders. It was determined that the appellant did not contravene section 9(1)(b) even if the department's version of events was accepted. The confiscation of the amount seized from the appellant was deemed unjustified, and the authorities were directed to return the confiscated amount and the penalty deposit within a specified timeframe.

 

 

 

 

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