1995 (8) TMI 349 - AT - FEMA

Summary

Issues:
- Imposition of penalty under sections 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973
- Confiscation of foreign currency under section 63 of the Act
- Failure of the appellant to appear in the proceedings
- Allegations of illegal dealings in foreign exchange
- Challenge to the imposition and quantum of penalty

Analysis:

The appeal was filed against an Adjudication Order imposing a penalty of Rs. 50,000 on the appellant for contravention of sections 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973. Additionally, foreign currency seized from the appellant's business premises was ordered to be confiscated to the Government under section 63 of the Act. The appellant was alleged to have acquired foreign exchange in violation of the specified sections. The penalty amount of Rs. 50,000 had already been recovered from the seized Indian currency, leading to the disposal of the appeal on merits.

Despite notice, the appellant did not appear, and the postal acknowledgment card confirmed the receipt of the notice. The grounds in the memorandum of appeal related to the show-cause notice allegations, which the Adjudicating Officer found unsubstantiated except for the foreign currency seized from the appellant's business premises. Allegations of dealing in foreign exchange of significant amounts and abetment by the appellant's father were not established. The appellant's challenge on the department's failure to prove the recovery of foreign exchange was deemed untenable as he did not dispute the recovery memo or the possession of foreign currency.

The Adjudicating Officer's findings were not based on the appellant's statements, and the appellant's attempt to shift the burden of proof to the department was rejected. The appellant had opportunities to respond during the adjudication proceedings. The appellant's challenge to the imposition and quantum of penalty was based on the violation of sections 8(1) and 8(2) concerning illegal dealings in foreign exchange. The recovery of foreign currencies indicated the appellant's involvement in illicit transactions, justifying the penalty and confiscation of foreign currency.

Ultimately, the appeal was rejected, upholding the impugned order and penalties imposed. The penalty amount already recovered was considered as payment by the appellant. The decision highlighted the appellant's engagement in illegal foreign exchange transactions, leading to the dismissal of the appeal and affirmation of the penalties imposed.