1995 (3) TMI 505 - AT - FEMA

Summary

Issues:
1. Imposition of penalty for contravention of sections 8(1), 9(1)(b), and section 15 of the Foreign Exchange Regulation, 1973.
2. Waiver of pre-deposit requirement for the penalty amount.
3. Allegations under three show-cause notices (SCN-I, SCN-II, and SCN-III) regarding receiving funds, acquiring foreign currency, and contravention based on a statement.
4. Justification of penalties imposed and confiscation orders.
5. Evaluation of explanations provided by the appellant.
6. Burden of proof on the Department for establishing contraventions.
7. Partial allowance of the appeal and setting aside of penalties under SCN-II and SCN-III.

Detailed Analysis:
1. The appeal was filed against an Adjudication Order imposing a penalty for contravention of various sections of the Foreign Exchange Regulation, 1973. The penalties were based on three show-cause notices alleging receipt of funds, acquisition of foreign currency without permission, and contravention based on a statement made by the appellant.

2. The Chairman considered the submissions and waived the pre-deposit requirement for the penalty amount, citing undue hardship to the appellant if required to deposit before the appeal's consideration on merits.

3. Under SCN-I, the appellant was alleged to have received funds on behalf of her son and relatives, leading to a penalty imposition. The Chairman upheld the penalty, stating that the appellant's receipt of funds was evident, and there was no justification for reducing the penalty.

4. Regarding SCN-II, the appellant was charged with acquiring foreign currency without permission. The Chairman set aside the penalty but sustained the confiscation order, giving the benefit of doubt to the appellant based on the explanation provided.

5. A penalty was imposed under SCN-III based on a statement made by the appellant. The Chairman highlighted the lack of evidence and burden of proof on the Department to establish contraventions, ultimately setting aside the finding of contravention under SCN-III.

6. The appeal was partly allowed, with the Chairman sustaining the penalty under section 9(1)(b) while setting aside penalties under SCN-II and SCN-III. The appellant was given 30 days to pay the penalty amount, and the respondents were directed to release seized assets within the specified timeframe.