1996 (2) TMI 608 - AT - FEMA

Summary

Issues:
1. Imposition of penalty under section 8(1) of the Foreign Exchange Regulation Act, 1973 for contravention.
2. Appeal against the penalty imposed.
3. Contravention related to acquisition of foreign exchange without permission.
4. Disputed acquisition of foreign exchange from a friend.
5. Consideration of circumstances in determining penalty amount.

Analysis:
The judgment pertains to an appeal filed against a penalty imposed on the appellant for contravention of section 8(1) of the Foreign Exchange Regulation Act, 1973. The appellant was alleged to have acquired foreign exchange without the required permission. The appellant contended financial constraints due to disrupted legal practice in a conflicted area as a reason for not being able to deposit the penalty amount. The respondent argued against the appellant's plea, stating that the appellant failed to refute the findings of the Adjudicating Officer. The appellant claimed to have won a sum of foreign exchange in a game of Rummy and a horse race in Hong Kong, disputing the acquisition of another sum from a friend. However, discrepancies in the appellant's statements were noted, leading to a finding of contravention despite the claimed manner of acquisition.

The Adjudicating Officer's decision was upheld regarding the contravention of section 8(1) based on the lack of permission for the acquisition of foreign exchange, even if acquired through winnings. The notification cited did not exempt the appellant from the contravention. The appellant's financial situation and reasons for the acquisition were considered, leading to a reduction in the penalty amount from Rs. 50,000 to Rs. 25,000. The appellant was granted 30 days to deposit the revised penalty amount, failing which the respondents were authorized to recover the penalty as per the law.

In conclusion, while the appeal partially succeeded in reducing the penalty amount, the finding of contravention under section 8(1) was upheld. The judgment balanced the circumstances of the appellant, acknowledging financial constraints and the nature of the contravention, resulting in a reduced penalty amount to meet the ends of justice.