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FEMA - Case Laws
Showing 601 to 620 of 1378 Records
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2011 (1) TMI 1333
Issues involved:
The writ petition seeks to challenge the withdrawal of benefits and show cause notices issued by the respondents, alleging them to be illegal and arbitrary, violating constitutional provisions.
Withdrawal of benefits:
The petitioners established a unit in Himachal Pradesh based on clarifications from the Directorate General of Export Promotion. The eligible exemption was withdrawn, leading to a show cause notice being issued. The petitioners claim the withdrawal was communicated late, hindering their ability to respond. The court notes the option for the petitioners to seek clarification from the Directorate General of Export Promotion and directs them to make a representation within two weeks. The third respondent is instructed to consider the representation and provide a decision within two months, allowing for a hearing if requested.
Conclusion:
The court disposes of the writ petition without delving into the merits of the petitioners' contentions, leaving all arguments open for future consideration. The petitioners are permitted to approach the Directorate General of Export Promotion for interim relief while the matter is pending before them. All pending applications are also disposed of by the court.
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2011 (1) TMI 1269
Whether the representations filed on behalf of the detenus were not disposed of in accordance with the mandate of Article 22(5) of the Constitution?
Whether the manner of consideration and rejection of representation by the Central Government is in accord with the principles laid down by this Court on this aspect in several cases?
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2011 (1) TMI 1241
Transfer of share in favour of NRI - Permission for such transfer was not obtained from RBI - Compounding of offence by RBI - Imposition of penalty - Held that:- offence has taken place when FERA was in force as it is clearly reflected by the letter of RBI who refused to entertain the application for compounding stating that the violation is under FERA and the provision of compounding was not there under the said Act. The compounding is permissible only under the provisions of FEMA. The show cause notice in the present case is issued on 20th May, 2009 i.e. after the expiry of 2 years of sun set period provided under Section 49(3) - violation has taken place when FERA was in force and therefore under Section 49(3) of FEMA it was necessary for the Directorate Enforcement to take notice of the said violation before 31st May, 2006 i.e. before expiry of sun set period. As the show cause notice was issued in 2009 for violation of provision of FERA the same cannot be set to be within limitation and in accordance with law - Decided in favour of appellant.
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2011 (1) TMI 1239
Violation of Section 9(1)(b), 9(1)(c) and 9(1)(d) of FERA - Imposition of penalty - Confiscation of seized money - Admissibility of evidence - Held that:- Adjudicating Authority has recorded statement of Smt. Gurmej Kaur who in her statement admitted that her husband is staying at Dubai and the documents (loose sheets and diary) is written in the handwriting of her husband who alone can explain the same regarding recovery of Rs. 65,000/- seized from her resident - Smt. Gurmej Kaur did not retract with her statement. Apart from that statement of Narinder Singh are also on record in which he has admitted that he has paid a sum of Rs. 2,30,000/- to Smt. Gurmej Kaur. Thus, her statements are corroborated by the statement of Narinder Singh to that extent and thus, receipt of Rs. 3,30,000/- is proved. Apart from that statement of Gulzar Singh, Kuldip Kaur, Surinder Kaur, Harmesh Lal, Gurdev Singh Fauji, Piara Lal, Rattan Singh, Pushapawati of Ludhiana are on record. These persons shows that the appellant has paid a sum of Rs. 8,37,000/- to these persons at different time in different amount.
Thus, there is ample evidence on record to show that Harbhajan Singh was involved in selling of foreign exchange without permission of Reserve Bank of India (RBI) and he sold foreign exchange to the tune of Rs. 8,57,000/-. However, there is no evidence on record to show that the appellant has disbursed a sum of Rs. 1,35,28,275/-. As the loose papers recovered from his house, appellant does not fall with Section 34 of the Evidence Act which provides that entries in a Book of Account recovery kept in the course of business are admissible in evidence. The entries in the diary and the loose sheets cannot be said to be account kept in regular course of business and, therefore they are not admissible in evidence - Penalty reduced - But confiscation sustained - Decided partly in favour of Appellant.
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2011 (1) TMI 1237
Issues:
1. Violation of Section 9(1)(a) of FERA.
2. Opportunity for cross-examination in FERA proceedings.
3. Nature of proceedings under FERA - civil or criminal.
4. Imposition of penalty based on preponderance of probabilities.
Detailed Analysis:
1. The appeals were filed against an Adjudication Order imposing a penalty for violating Section 9(1)(a) of FERA. The case involved misuse of provisions related to remittances of foreign exchange, where individuals were accused of depositing black market foreign exchange into NRE Accounts. The appellants admitted receiving cheques without RBI permission, leading to the penalty imposition by the Adjudicating Authority.
2. The issue of the right to cross-examine witnesses was raised, alleging a violation of natural justice. While the appellants contended for this right, the Tribunal noted that they had admitted receiving the cheques and had opportunities for personal hearings but chose not to cross-examine witnesses. Citing precedents, the Tribunal concluded that by not attending the personal hearing, the appellants waived their right to cross-examination.
3. The nature of FERA proceedings was debated, with one party arguing for quasi-criminal status based on a Supreme Court judgment. However, the Tribunal referenced various judgments, including Director of Enforcement v. MCTM Corporation Pvt. Ltd., to establish that FERA proceedings are civil in nature. The Tribunal emphasized that penalties are imposed for civil breaches, not criminal offenses, based on preponderance of probabilities.
4. Considering the lack of evidence regarding a relationship between the appellants and the individual issuing the gift cheques, the Tribunal inferred that the appellants likely made payments to convert black money into white. The Tribunal held that without a plausible relationship, the appellants violated Section 9(1)(a) of FERA by receiving gifts, leading to the dismissal of all appeals and upholding the penalty imposition.
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2011 (1) TMI 1236
Issues:
Violation of Section 8(3) of FERA - Imposition of penalty
Issue 1: Violation of Section 8(3) of FERA - Imposition of penalty
The appeal was filed challenging the order imposing a penalty of Rs. 12,000 on the appellant for the alleged violation of Section 8(3) of FERA. The facts of the case revealed that foreign currency was seized from the residential premises of the appellant, who claimed to have acquired it for a business promotion tour from Authorized Dealers. The appellant stated that he was abroad from 18-3-1992 to 18-8-1992 and was required to surrender the foreign exchange within 90 days from the date of return, as per a Notification issued by the Reserve Bank of India.
The Directorate of Enforcement contended that as per Notification No. FERA/73/88-RB, unutilized foreign exchange should be surrendered within 90 days from the date the individual becomes aware that it cannot be used. The raid was conducted within 10 days of the appellant's return from the foreign tour, falling within the stipulated period. However, it was argued that in such circumstances, the appellant could not be held guilty of violating Section 8(3) of FERA.
The appellate tribunal, chaired by Justice Subhash Samvatsar, found that the appellant could not be deemed to have contravened Section 8(3) of FERA, and that the penalty imposed by the Directorate of Enforcement was erroneous. Consequently, the appeal was allowed, the impugned order was set aside, and the penalty amount deposited by the appellant was directed to be returned to him.
This detailed analysis provides a comprehensive overview of the legal judgment, focusing on the issue of violation of Section 8(3) of FERA and the subsequent imposition of a penalty. The summary encapsulates the key arguments, findings, and the ultimate decision rendered by the appellate tribunal, ensuring a thorough understanding of the case.
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2011 (1) TMI 1235
Issues:
Violation of Section 9(1)(b) and 9(1)(d) of FERA - Imposition of penalty based on retracted statement and corroborating evidence.
Detailed Analysis:
The judgment by the Appellate Tribunal for Foreign Exchange, New Delhi pertains to two appeals against an order passed by the Special Director of Enforcement, Bombay, imposing a penalty on the appellant for violating Section 9(1)(b) and 9(1)(d) of FERA. The case involved the appellant depositing a significant amount in a fictitious account, allegedly on behalf of a resident of Dubai, thereby breaching FERA provisions. The appellant contested the charges, claiming that his statement was obtained under duress and retracted, citing the Apex Court's ruling in Vinod Solanki v. Union of India.
The appellant argued that his retracted statement, the basis for the penalty, was coerced during custody by the Enforcement Directorate, rendering it unreliable. The Adjudicating Authority, however, relied on this statement, suggesting self-inflicted injuries to explain the retraction. The Tribunal highlighted the burden on the department to prove the voluntary nature of statements recorded in custody, as per the Vinod Solanki case. In this instance, the department failed to demonstrate the statement's voluntariness, undermining its validity as evidence.
Furthermore, the Tribunal scrutinized the corroborating evidence, emphasizing the necessity of supporting the retracted statement. The raid on the appellant's premises yielded no incriminating documents, raising doubts about the search and seizure procedures. The appellant's defense regarding the ownership of the premises and the documents found therein added complexity to the case. Despite the appellant's attempt to discredit the seized documents, Section 72 of FERA presumes the authenticity of such documents unless proven otherwise.
Ultimately, the Tribunal concluded that the retracted statement, when substantiated by the recovery of bank deposit slips, validated the charges against the appellant. The corroborative evidence indicated the appellant's involvement in depositing funds on behalf of a Dubai resident, aligning with the alleged FERA violations. Consequently, the Tribunal upheld the penalty imposed by the Adjudicating Authority, dismissing both appeals for lack of interference in the impugned order.
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2011 (1) TMI 1234
Issues:
Challenge to order dropping proceedings for violation of FERA, Competency of Deputy Legal Adviser to file revision on behalf of Director of Enforcement.
Issue 1: Challenge to order dropping proceedings for violation of FERA
The appeal before the Appellate Tribunal for Foreign Exchange, New Delhi involved a revision filed by the Deputy Legal Adviser for the Director of Enforcement challenging an order passed by the Addl. Director General, DGICC, Enforcement Directorate, New Delhi. The order in question, dated 6-10-2004, dropped the proceedings against the respondent for violation of the provisions of the Foreign Exchange Regulation Act, 1973 read with Section 49(3) of FEMA, 1999. The facts of the case revealed that the appellant and a co-noticee were served with a Show Cause Notice for the alleged violation, but the proceedings against the co-noticee were dropped as he was not served due to being in the USA. However, the proceedings against the appellant were also dropped on the grounds that the department did not provide copies of the documents relied upon in the Show Cause Notice. The appellant contended that this order was illegal and contrary to law.
Issue 2: Competency of Deputy Legal Adviser to file revision on behalf of Director of Enforcement
The second issue raised in the appeal was the competency of the Deputy Legal Adviser to file the revision on behalf of the Director of Enforcement. The respondent's counsel argued that the Deputy Legal Adviser lacked the authority to file the revision. In support of this argument, reference was made to a judgment of the Delhi High Court in the case of M/s. M. I. Enterprises v. Director of Enforcement, where it was held that the Deputy Legal Adviser of the Director of Enforcement did not have the authority to file a revision before a specific date. This argument was further supported by citing a judgment of the Tribunal in the case of J.K. Jain v. Director of Enforcement, where a similar view was upheld. Based on the precedents and legal interpretations, the Tribunal concluded that the appeal was not maintainable due to the lack of authority of the Deputy Legal Adviser to file the revision on behalf of the Director of Enforcement and consequently dismissed the appeal.
In conclusion, the Appellate Tribunal for Foreign Exchange, New Delhi, addressed the issues of challenging the order dropping proceedings for violation of FERA and the competency of the Deputy Legal Adviser to file the revision on behalf of the Director of Enforcement. The Tribunal found the order dropping proceedings to be legal and dismissed the appeal based on the lack of authority of the Deputy Legal Adviser to file the revision.
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2011 (1) TMI 1072
Benefit under International Price Reimbursement Scheme (TPR Scheme’)denied - Proprietary concern and a merchant-exporter exported various automotive components, by virtue of the said export - contention of the Petitioners that since the EEPC had already found the claims to be in order, it had to necessarily issue orders releasing the payment - Held that:- Refusal by the EEPC to clear the Petitioners’ claims for payment in terms of the IPR Scheme cannot be said to be either arbitrary or unreasonable. Unless the complete documentation in terms of the IPR Scheme was made available to the EEPC by the Petitioners, they could not expect the EEPC to clear their claims, no merit in either of the petitions and they are dismissed as such with no order as to costs
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2011 (1) TMI 315
Waiver of repatriation - The petitioner has complied with the order but has filed the present petition challenging the legality and validity of Sections 18(2) and 18(3) of FERA on the ground that they are manifestly arbitrary and irrational - The impugned Sections only raise a presumption against the exporter, but the same can be rebutted by the exporter - constitutional legality and validity of Sections 18(2)and 18(3) of FERA has already been upheld by the Supreme Court in Seema Silk & Sarees and Another vs. Directorate of Enforcement and Others, (2008) 5 SCC 580 - it is apparent that FERA finds place in the Ninth Schedule of the Constitution of India and in accordance with Article 31-B of the Constitution, none of the Acts specified in the Ninth Schedule can be held ultra vires even if the provisions of the said Act are inconsistent or abridge any of the fundamental rights contained in Part-III of the Constitution of India - The writ petition is dismissed
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2010 (12) TMI 1079
Issues:
Violation of Section 8(3) and 8(4) of FERA - Failure to submit Exchange Control Copy of Bill of Entry for imports - Service of Show Cause Notice at the correct address - Principles of natural justice - Burden of proof on the appellant - Remand and opportunity to produce required documents - Penalty amount deposited by the appellant.
Analysis:
The appeal challenges the penalty imposed on the appellant for violating Section 8(3) and 8(4) of FERA by failing to submit Exchange Control Copy of Bill of Entry for imports. The appellant contended that the Show Cause Notice was not served at the correct address, leading to an ex parte order. The appellant argued that the order violated principles of natural justice as the notice was not served at the registered office. However, it was found that under FERA, the notice can be served at the place of business or residence of the person concerned, as per Rule 3 of the Foreign Exchange Regulation Rules, 1974.
The appellant relied on judgments related to natural justice, but it was clarified that those judgments do not apply when ex parte orders are issued after issuing notices. The key issue was whether the notice was served on the appellant as per the law. The appellant claimed to have changed the address before the Show Cause Notice was issued, but as per Section 71 of FERA, the burden of proof that the foreign exchange was used for the permitted purpose lies on the appellant. To ensure justice, the appellant was granted an opportunity to produce the required documents, specifically the Bill of Entry, to prove compliance with the Exchange Control Manual.
In the interest of justice, the matter was remanded back to the Director of Enforcement for further inquiries upon the appellant's production of the necessary documents. The appellant was directed to pay a cost of Rs. 10,000 for not updating the address with the authorized dealer. The penalty amount deposited by the appellant would be subject to the final order passed by the Director of Enforcement and refunded accordingly. The Director of Enforcement was instructed to make inquiries and pass an appropriate order within two months from the appearance of the parties.
In conclusion, the appeal was disposed of with the appellant given a chance to meet the allegations by producing the required documents, subject to further proceedings by the Director of Enforcement.
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2010 (12) TMI 657
Violation FERA - Proceedings under FEMA - taking notice versus issuing notice - period of limitation of 2 years - whether the adjudicating officer has taken notice of the alleged contravention of FERA within the period of two years from the commencement of FEMA so as to adjudicate upon such contravention of FERA under the provisions of FEMA - Held that:- the adjudicating officer on taking notice of the alleged contravention of FERA has signed signing the show cause notice on 31-5-2002. Since the adjudicating officer has taken notice of the alleged offence on 31-5-2002 which is within a period of two years from the commencement of FEMA as contemplated under Section 49(3) of FEMA, the adjudicating officer would have jurisdiction to adjudicate the notice dated 31-5-2002. The fact that the said notice was posted on 5-6-2002 and served upon on 6-6-2002 would not invalidate the proceedings initiated by show cause notice dated 31-5-2002, because for the purpose of Section 49(3) of FEMA what is relevant is ‘taking notice’ and not issuance or service of notice. - Petition dismissed.
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2010 (12) TMI 18
Illegal seizure – seizure of gold and cash – period of holding under seizure – seizure under FEMA as well as under Income Tax simultaneously - seizure of both the gold and cash took place way back on 11th July 2005 and for over five years now even no show cause notice has been issued to the Petitioner – Held that: - It is not understood how, despite not issuing any legal justification for detention of the Indian currency amounting to Rs. 1,49,000/- and 6 kgs of gold, it was retained by the ED till 28th August 2009 i.e. for over four years. The affidavit dated 19th November 2009 filed by the ED admitted that 6 kgs of gold as well as the seized Indian currency were handed over to the IT Department only on 28th August 2009. On its part the IT Department admitted to thereafter having received both the gold as well as the Indian currency and admitted having issued the warrant of authorization under Section 132A of the IT Act. - A perusal of Section 37 of the FEMA reveals that it cannot be invoked to seize Indian currency. The ED had itself admitted before this Court that there was no basis for seizure by the ED of the 6 kgs of gold. As far as Section 132A of the IT Act is concerned, it does not permit indefinite detention of the seized items by the IT Department without even issuing show cause notice to explain the legal basis of detention of the seized item – direction issued to release of goods
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2010 (11) TMI 737
Writ petition - Search and seizure - petitioner did not deposit a sum of Rs. 10,00,000/- imposed against him as penalty. Along with the appeal, he filed an application under Section 52(2) of the Act seeking to dispense with such deposit on the ground that he does not have wherewithal to deposit the same and insisting for such deposit would cause undue hardship to him - amount seized by the department from the petitioner has been subjected to confiscation, no materials available on record to disbelieve the statement of the petitioner that he does not have wherewithal and there appears to be some truth in the claim of the petitioner and finally having regard to the fact that the petitioner is a chartered accountant by profession, and so, he must have some reasonable income, conditional order in favour of the petitioner to direct him to deposit a sum of Rs. 2,00,000/- (Rupees two lakhs only) within a period of 45 days from the date of receipt of a copy of this order for entertaining the appeal as provided in Section 52(2) of the Act. To that extent the impugned order needs interference.
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2010 (11) TMI 611
Whether any requisite and reasonable steps had been taken by the appellant to recover the export proceeds from the overseas buyers - specific charge against the appellant was that for the non-repatriating the outstanding proceeds by way of foreign exchange to the country within the stipulated period, the appellant contravened the provisions of Section 18(2) read with 18(3) of the FERA - It is, no doubt the appellant was continuously in touch with their Agent- Commercial at France to take steps to recover the amount and finally the Agent-Commercial expressed his inability to recover the amount - according to the appellant, further steps such as filing a suit at France, contacting the Indian Embassy at foreign countries, etc. would amount to expending huge amount of good money for bad dues whether the correspondence produced by the appellant that had been exchanged between themselves and their Agent-Commercial and the Legal Representative are sufficient enough to come to the conclusion that the appellant had taken necessary and reasonable steps to recover the amount or not - any amount of correspondence sent by the appellant to the foreign buyers or to the Legal Representative or to the Agent-Commercial, is only an internal correspondence - The letter correspondence between the appellant and their foreign buyers is not sufficient enough to prove the reasonableness of the appellant to secure the foreign proceeds within the purview of the Act - civil miscellaneous appeals are dismissed
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2010 (10) TMI 1158
Issues involved: Contravention of Sections 8(1) and 40(3) of FER Act, penalty imposition, retraction of confessional statements, false statement under Section 40 of FER Act.
Contravention of Sections 8(1) and 40(3) of FER Act:
The appeals were filed against an Adjudication Order imposing penalties for contravention of Sections 8(1) and 40(3) of FER Act. The investigation revealed that foreign exchange and Indian currency were recovered from the appellants without a legitimate source being explained. The confessional statements of the appellants were retracted, but lacked substantial evidence to support the claim of coercion. The Supreme Court precedent emphasizes the burden of proof on the maker of the statement to establish any coercion, which was not fulfilled in this case. The retracted confessional statements were found to be voluntary and true based on corroborating evidence.
False statement under Section 40 of FER Act:
One of the appellants was charged for giving a false statement under Section 40 of the FER Act. The appellant's statement was contradicted by another individual, leading to the conclusion that a false statement was indeed given. The retraction of the false statement was considered an afterthought made under legal advice, lacking substantial evidence of coercion. The sequence of events, statements, and evidence provided corroboration to the initial statement, indicating its voluntary and truthful nature. The charges were proven beyond reasonable doubt, resulting in the appellants being held guilty and the penalty upheld.
Conclusion:
After careful consideration of the facts, evidence, and circumstances, it was determined that the charges against the appellants were proved beyond reasonable doubt. The penalty amount imposed was deemed appropriate considering the gravity of the charges. The impugned order was confirmed and upheld, leading to the dismissal of the appeals due to lack of merit. The pre-deposited amount was to be appropriated towards the penalty as per the judgment of the Appellate Tribunal for Foreign Exchange.
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2010 (10) TMI 1157
Issues:
1. Condonation of delay in filing an appeal.
2. Ex parte adjudication order.
3. Lack of communication from the Tribunal.
4. Grounds for review of the order dated 1-6-2010.
Condonation of Delay in Filing an Appeal:
The review petition was filed against the Tribunal's order dismissing the appeal due to a delay of over four years in filing the appeal. The petitioner argued that the Adjudication Order was passed ex parte, received in 2001, and not served properly. The Tribunal found discrepancies in the petitioner's submissions regarding the date of receipt of the Adjudication Order and reasons for the delay. The Tribunal concluded that the appeal was rightly dismissed due to the delay and lack of sufficient justification provided by the appellant.
Ex Parte Adjudication Order:
The petitioner claimed that the Adjudication Order was received ex parte in 2001, leading to the delay in filing the appeal. However, the Tribunal found that the petitioner failed to disclose crucial information regarding the receipt of the order and the reasons for the delay. The Tribunal noted discrepancies in the petitioner's statements and concluded that the order was passed after considering all aspects, including the delay issue.
Lack of Communication from the Tribunal:
The petitioner argued that there was a lack of communication from the Tribunal after a specific date, leading to confusion about the appeal status. The Tribunal refuted this claim, stating that the petitioner had a history of absenteeism in adjudication proceedings. The Tribunal found that the petitioner's delay in enquiring about the appeal and failure to provide reasons for the four-month gap contributed to the dismissal of the appeal.
Grounds for Review of the Order:
The Tribunal highlighted that the order dated 1-6-2010 was not reviewable unless there was an apparent error on the face of the order. The Tribunal explained the limited grounds for review, such as errors in the record or the availability of new substantial evidence. The Tribunal emphasized that a review cannot be based on dissatisfaction with the reasons provided in the original order. The review petition was deemed not maintainable and was rejected based on the facts, evidence, and circumstances of the case.
In conclusion, the Tribunal upheld the dismissal of the appeal due to the delay in filing, lack of proper justification, and discrepancies in the petitioner's submissions. The review petition was rejected as it did not meet the criteria for review, emphasizing the importance of providing accurate information and timely action in legal proceedings.
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2010 (10) TMI 1050
Issues involved: Determination of the effect of a concession granted by Counsel on behalf of a party to Court which is not in accordance with law.
Summary:
1. The Respondent, a grandson of a Freedom Fighter, was nominated for Government service by his grandmother. However, his application was rejected after his grandmother's demise.
2. The Respondent challenged the rejection through a Writ Petition, and the Court directed the Government to provide appropriate employment to him based on his grandmother's nomination.
3. The Petitioner sought a review of the order, arguing that the appointment requisites were not fulfilled, such as informing the Employment Exchange and following government circulars.
4. The Petitioner contended that the concession made by Counsel on law does not bind the Petitioner, citing legal precedents like Uptron India Ltd. Vs. Shammi Bhan & Anr.
5. The Court held that a wrong concession by Counsel on a question of law is not binding, as seen in cases like Central Council For Research in Ayurveda & Siddha and Anr. Vs. Dr. K. Santhakumari.
6. The Review Petition was allowed, setting aside the previous order, and the Writ Petition will now be heard on its merits by the regular Court.
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2010 (10) TMI 944
Issues Involved: Alleged contravention of Section 9(1)(a), 9(1)(b), and 9(1)(d) of FERA, violation of principles of natural justice, reliance on confessional statements, burden of proof on prosecution, lack of independent witnesses, cross-examination of witnesses.
Summary:
Alleged Contravention of FERA:
The appellant, along with co-accused, faced allegations of contravening Section 9(1)(a), 9(1)(b), and 9(1)(d) of FERA. Transactions involving payments and drafts were scrutinized, leading to a penalty of Rs. 2 lakhs imposed by the adjudicating authority, which was upheld in appeals dismissed by the Director, Enforcement Directorate.
Principles of Natural Justice:
The appellant contended that the denial of the opportunity to cross-examine witnesses violated principles of natural justice. It was argued that the prosecution must prove the case beyond doubt, ensuring the voluntariness of confessions without coercion. Lack of independent witnesses supporting the prosecution's case was highlighted.
Reliance on Confessional Statements:
While the defense emphasized the need for independent corroborative evidence, the prosecution relied on confessional statements recorded under Section 40 of FERA. The defense argued that the impugned orders were supported by material evidence, including seized documents, and were not solely based on confessions.
Burden of Proof and Lack of Evidence:
Citing a Supreme Court judgment, it was clarified that the burden of proof lies with the prosecution to establish charges beyond suspicion. The absence of evidence demonstrating the voluntary nature of confessions raised doubts about the basis for imposing penalties. The appellant's alleged violations of Sections 9(1)(a) and 9(1)(b) required concrete proof of transactions with non-residents, which was lacking.
Judgment and Conclusion:
Upon review, it was found that the reliance on confessions without evidence of voluntariness and the lack of legal support for the findings undermined the penalty imposition. Consequently, the appeal was allowed, and the penalty of Rs. 2,00,000 was set aside due to the absence of substantial legal evidence supporting the charges.
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2010 (10) TMI 936
Issues involved: Contravention of Section 9(1)(b) of the FER Act regarding receipt of payment from a person resident outside India without RBI permission.
Summary:
The appeal was filed against an Adjudication Order imposing a penalty for contravention of Section 9(1)(b) of the FER Act. The appellant received Rs. 1,30,000 in 1993 from a person resident outside India without RBI permission. The appellant admitted to receiving the amount and using it to purchase a property for his daughter. The Enforcement Directorate seized Rs. 1,15,000 from the appellant's residence. The appellant later retracted his statement, claiming it was obtained under threat and coercion.
The legal position under Section 9(1)(b) of the FERA, 1973 was considered, which prohibits receiving payments from a person resident outside India without RBI permission. The burden of proving that the confessional statement was obtained under duress was on the appellant, which he failed to discharge. The delay in retracting the statement and lack of documentary evidence to support the retraction were noted. The Supreme Court precedent highlighted the importance of proving inducement or coercion in such cases.
The appellant's retracted statement was corroborated by the statement of another individual involved in hawala payments and circumstantial evidence. The retraction was deemed an afterthought made under legal advice. The appellant's assertion of threat and coercion lacked evidence to support it. The confessional statement was considered voluntary and true based on the evidence presented.
Ultimately, the charges of contravening Section 9(1)(b) of the FER Act were found proved against the appellant. The penalty imposed was deemed commensurate with the gravity of the charge. The appeal was dismissed, directing the appellant to deposit the penalty amount within 30 days, failing which the respondent could recover it in accordance with the law.
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