1997 (11) TMI 554 - AT - FEMA

Summary

Issues:
1. Violation of sections 8(1) and (2), read with section 64(2) of the Foreign Exchange Regulation Act, 1973.
2. Alleged contravention of the Act due to possession of foreign exchange during a search.
3. Failure to attend adjudication proceedings due to financial constraints.
4. Allegation of decision made without considering appellant's reply.
5. Grounds of appeal based on natural justice, financial condition, and violation of law.
6. Inability to personally attend proceedings and reliance on written submissions.
7. Burden of proof on appellant to show legal possession of foreign currency.
8. Lack of documentary proof regarding the source of foreign currency.
9. Adjudication Officer's rejection of appellant's claim regarding the currency.
10. Consideration of appellant's financial condition in determining penalty.
11. Reduction of penalty from Rs. 5,000 to Rs. 2,000 for the appellant.

Analysis:
The judgment pertains to an appeal against an order alleging contravention of sections 8(1) and (2), along with section 64(2) of the Foreign Exchange Regulation Act, 1973. The Enforcement Directorate conducted a search where foreign exchange was seized from the appellant's possession. The appellant did not attend adjudication proceedings personally or through legal representation due to financial constraints. The appellant claimed that the Assistant Director made a decision without proper consideration, leading to prejudice. The grounds of appeal included violations of natural justice, failure to consider financial condition, and alleged errors in the decision-making process.

The appellant argued that the order was against natural justice and failed to consider all aspects, including financial constraints and reasons provided in the reply. The appellant contended that the Assistant Director did not properly investigate the source of the foreign currency found in the appellant's possession. Despite the appellant's claim that the currency belonged to his deceased father, no documentary evidence was presented to support this assertion. The Adjudicating Officer rejected the appellant's plea, leading to the upholding of the confiscation order and penalty imposed.

The appellant's financial condition was taken into account, leading to a reduction in the penalty from Rs. 5,000 to Rs. 2,000. The appellant was directed to deposit the reduced penalty within 45 days. Failure to comply would result in the Enforcement Directorate recovering the amount in accordance with the law. The judgment emphasized the importance of proving legal possession of foreign currency and the adherence to principles of natural justice in such cases.