1996 (3) TMI 579 - AT - FEMA

Summary

Issues: Appeal for dispensing with pre-deposit, Contravention of FERA provisions, Financial condition of the appellant, Reduction of penalty amount

Issue 1: Appeal for dispensing with pre-deposit
The appellant filed an application requesting a hearing in Calcutta due to health and financial issues. The appellant sought dispensation of pre-deposit on compassionate grounds, emphasizing his poor financial condition, cooperation during investigation, and lack of knowledge about FERA provisions. The Chairman reviewed the appellant's plea and decided to waive the pre-deposit requirement, considering the urgency of the appeal proceedings and the appellant's financial situation. The Chairman proceeded to dispose of both appeals without personal hearing, granting the appellant's request for waiver.

Issue 2: Contravention of FERA provisions
The appellant was found guilty of contravening sections 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973. The charges were based on evidence including the appellant's statements, seized letters, and statements of other individuals involved. While the appellant admitted to some transactions, he maintained his innocence regarding certain amounts. The Chairman carefully analyzed the evidence and found that the charges related to specific amounts were not adequately supported by evidence. Consequently, the Chairman set aside the charges related to certain amounts while upholding the contravention charges for a specific amount of Rs. 70,000.

Issue 3: Financial condition of the appellant
The appellant, besides pleading for mercy, did not present strong legal arguments in defense. The Chairman acknowledged the appellant's financial struggles and the circumstances that led to his involvement in the case. Considering the appellant's financial position, lack of legal defense, and the interconnected nature of the contraventions, the Chairman reduced the penalty amount to Rs. 5,000. The Chairman balanced the need for accountability with the appellant's financial hardships and the nature of the contraventions to arrive at a judicious penalty amount.

Issue 4: Reduction of penalty amount
In another appeal, the appellant was charged with contravening section 16(1)(b) of the Act. The allegation was related to the appellant's failure to receive a payment from a foreign entity without proper permission. The Chairman scrutinized the evidence and found that the appellant did not have a legally enforceable right to receive the payment in question. As a result, the Chairman set aside the contravention charge and the penalty imposed, emphasizing the lack of concrete evidence supporting the allegation. The appeal was allowed, and the penalty was revoked.

In conclusion, the Chairman partially allowed Appeal No. 257 of 1994, sustaining contravention charges for a specific amount and reducing the penalty to Rs. 7,000. Appeal No. 308 of 1994 was allowed, setting aside the impugned order. The appellant was granted 30 days to pay the reduced penalty amount, failing which the respondents could take legal action to recover the sum.