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2019 (8) TMI 135 - AT - FEMAHawala transactions - Receiving payments under the instructions of persons resident outside India - contravention of Section 3(c) of FEMA, 1999 - distribution of payments under the instructions of persons resident outside India - contravention of Section 3(b) of FEMA, 1999 - imposition of penalties - relaibility on retracted statements - opportunity of cross-examination - principles of natural justice. HELD THAT - The appellants contention that they had retracted the statement is a little difficult to accept. The retraction was purportedly done by sending a letter to the Directorate of Enforcement on 15.09.2011 by Shri Shamsher Singh and 04.08.2011by Shri Dimple Thakur. In the case of Shamsher Singh it was done after 43 days from his first statement and after recording eight statements on different dates. Moreover, the appellant has given no proof that the retraction letter was actually sent since the adjudicating authority has clearly mentioned in the order that no such letters had been received - he statements of number of people taken during various points of time that they have been receiving money from Shamsher Singh various points of time on instructions from abroad cannot be brushed aside especially when the appellant has given no evidence to prove that those statements were wrong. Both the appellants statements as well as the appellants of at least 26 others and the CFSL report conclusively proves that there were illicit transactions. Opportunity to cross-examine - HELD THAT - Cross-examination is not a part of natural justice. The underlying principle of natural justice is of hearing the appellant and providing adequate opportunity to place their case before the adjudicating authority which has been fulfilled in this case - there is no reason to interfere in the impugned order on this ground. The appellant has accepted in his statement that this money was kept as a part of hawala proceedings gets proven by their own statements, by the statements of independent 26 others, by the CFSL report, and by the contradictory affidavit all of which are on record - in a case like the present one, it is not possible or necessary to prove the culpability to the last penny. Appeal dismissed.
Issues:
Appeal against order in original dated 01.10.2014 of the Special Director, ED regarding contravention of FEMA, 1999. Analysis: 1. Allegations and Contravention of FEMA, 1999: - Enforcement Directorate searched premises of appellants in Ludhiana and seized Indian currency and documents. - Appellants were found involved in distributing payments under instructions of persons outside India, contravening Section 3(b) and 3(c) of FEMA, 1999. - Penalties were imposed based on these findings. 2. Appellants' Submissions: - Appellants denied foreign currency involvement and applicability of Section 3(b) and 3(c). - Challenged lack of corroborative evidence and reliability of accomplices' statements. - Claimed seized amount belonged to appellant's wife and sought cross-examination. 3. Respondent's Arguments: - Respondent emphasized burden of proof on accused in hawala cases. - Cited multiple corroborative statements and CFSL report confirming international communications. - Disputed appellants' retractions and highlighted lack of proof for the same. 4. Judgment and Findings: - CFSL report verified international communications by appellants. - Appellants' statements confirmed involvement in illicit transactions. - Retractions were deemed unconvincing due to timing and lack of evidence. - Lack of proof for seized amount's legitimate source discredited appellants' claims. - Upheld penalties based on preponderance of evidence and appellants' own statements. 5. Natural Justice and Cross-Examination: - Cross-examination not mandatory as per natural justice principles. - Adjudicating authority provided adequate opportunity for defense. 6. Conclusion: - Dismissed the appeal due to substantial evidence supporting contravention of FEMA, 1999. - Upheld penalties based on findings of illicit transactions and lack of credible explanations for seized amount. This detailed analysis covers the issues, arguments, judgment, and key findings of the appellate tribunal's decision on the contravention of FEMA, 1999 by the appellants.
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