2009 (12) TMI 1066 - AT - FEMA

Summary

Issues:
Violation of provisions of section 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973; Retraction of confessional statement by the appellant; Opportunity for cross-examination of witnesses denied; Quantum of penalty imposed.

Analysis:
The appeal was filed against an Adjudication Order imposing a penalty for contravention of sections 8(1) and 8(2) of the FER Act. The appellant did not appear, but written submissions were considered. The appellant was found with US $4,500 and Indian currency of Rs. 20,000. The appellant claimed financial constraints and denied conscious possession of the foreign exchange, alleging false implication. The appellant's confessional statement was retracted, citing coercion. However, lack of evidence supporting coercion led to dismissal of this claim.

The statements of witnesses corroborated the appellant's involvement in foreign exchange transactions. The appellant's retracted statement was considered valid, and the denial of cross-examination was justified based on legal principles. The appellant's involvement in the sale and purchase of foreign exchange was confirmed, despite his denial in response to the show-cause notice. The appellant failed to explain the source of the foreign exchange, and his selective acceptance of statements was not permissible.

The tribunal found the appellant guilty of contravening sections 8(1) and 8(2) of the FER Act. The penalty imposed was deemed appropriate and proportional to the gravity of the offense. The tribunal upheld the impugned order, dismissing the appeal for lack of merit. The pre-deposited amount was to be appropriated towards the penalty, concluding the judgment.