1992 (10) TMI 278 - AT - FEMA

Summary

Issues:
1. Contravention of provisions of sections 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973.
2. Confiscation of seized amount of US $ 500.
3. Reliability of confessional statement.
4. Quantum of penalty imposed.

Analysis:

Issue 1: Contravention of provisions of sections 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973:
The appellant was alleged to have contravened sections 8(1) and 8(2) of the Act by purchasing and selling foreign exchange at rates other than those prescribed by the RBI. The appellant's defense was that the seized amount of US $ 500 was part of his Foreign Travel Scheme (FTS) amount from 1986. However, the appellant failed to provide sufficient evidence to prove this claim. The confessional statement made by the appellant was retracted later, but the retraction was deemed belated and unconvincing. The Chairman held that the appellant had indeed contravened section 8(1) by acquiring the foreign exchange in question.

Issue 2: Confiscation of seized amount of US $ 500:
The appellant argued that the seized amount was part of his FTS amount, but the evidence presented did not support this claim. The Chairman noted that the burden of proving lawful possession of foreign exchange exceeding Rs. 250 lay with the appellant, and his explanation was found to be lacking. As a result, the confiscation of the seized amount was deemed legally justified.

Issue 3: Reliability of confessional statement:
The appellant contested the reliability of the confessional statement, claiming it was obtained under threat. However, the Chairman found the retraction of the statement to be untimely and lacking in credibility. The Chairman concluded that the confessional statement was voluntary and true, thus upholding its validity in establishing the contravention of section 8(1).

Issue 4: Quantum of penalty imposed:
The appellant's counsel argued for a lenient view on the penalty due to the appellant's physical handicap and the failure to establish the charge under section 8(2). The Chairman agreed that the penalty of Rs. 4,000 was excessive considering the circumstances. Therefore, the penalty was reduced to Rs. 500, taking into account the appellant's handicap and the lack of evidence for contravention under section 8(2).

In conclusion, the Chairman confirmed the contravention under section 8(1), upheld the confiscation of the seized amount, set aside the charge under section 8(2), and reduced the penalty from Rs. 4,000 to Rs. 500. The Enforcement Directorate was directed to return the penalty amount deposited by the appellant after adjusting the reduced penalty within 45 days. The appeal was partly allowed with modifications to the adjudication order.