1995 (12) TMI 435 - AT - FEMA

Summary

Issues:
Alleged contravention of sections 9(1)(b), 9(1)(d), and 8(1) of the Foreign Exchange Regulation Act, 1973; Confiscation of seized amount of Rs. 3,50,000.

Analysis:

1. The appeal challenged the Adjudication Order holding the appellant guilty of contravening specific sections of the Foreign Exchange Regulation Act, 1973, with penalties totaling Rs. 32,000 and confiscation of Rs. 3,50,000. The dispensation application for pre-deposit was waived, and the appeal proceeded on merits, culminating in this final order.

2. The appellant's counsel argued against the evidence presented, emphasizing the lack of substantial proof beyond the appellant's statement under section 40 of the Act. The timing and circumstances of the appellant's statement raised doubts about its reliability, especially concerning the alleged receipt and utilization of the seized amount of Rs. 3,50,000.

3. The respondent reiterated the Adjudicating Officer's reasoning, emphasizing corroborative evidence supporting the findings. However, upon review, the Chairman found merit in the appellant's submissions regarding the lack of substantial evidence to uphold the charge of contravention of section 9(1)(b) and subsequent confiscation of the amount.

4. Regarding the contravention of section 9(1)(d), the Chairman analyzed the evidence related to the chits seized from the appellant's premises. While discrepancies existed, the lack of a convincing explanation from the appellant regarding the presence of certain documents led to upholding the charge for a specific amount but dismissing others due to insufficient evidence.

5. Concerning the seized foreign currency, the appellant failed to provide satisfactory evidence to justify its lawful possession, leading to the Chairman's decision not to interfere with the finding of contravention of section 8(1) and the subsequent penalties and confiscation.

6. The final decision partially allowed the appeal, setting aside certain findings and penalties while upholding others. The contravention of section 9(1)(b) and the associated penalty were overturned, along with the confiscation of the Rs. 3,50,000. However, the contravention of section 9(1)(d) was upheld for a specific amount, and the penalty for section 8(1) was sustained. The appellant was directed to pay the sustained penalty from the confiscated amount, with the balance to be refunded within a specified timeframe.