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2024 (10) TMI 395 - AT - FEMAOffence under FEMA - Allegation of illegal purchase and sell of foreign currency - Confiscation of seized foreign exchange and Indian currency - Penalty imposed - HELD THAT - The two Respondents were indulging in illegal business of buying foreign exchange from the local market so as to sell the same to the passengers who were travelling abroad. These passengers would not only buy the tickets from them but also the foreign exchange against Indian currency. It was well organized network since these passengers used to be identified by Shri T. Abdulla under whose instructions the foreign currency used to be handed over to them. Moreover, Shri Mohd. Salim had made arrangement with one Shri Birbal for purchase of required foreign currency. It has also come out during the investigation that the seized Indian currency of Rs. 10,57,000/-was sale proceed arising from foreign exchange transactions. Adjudicating Authority while imposing penalty of Rs. 24,00,000/- on Shri Abbas Mohd. Poyyail and Rs. 12,00,000/- on Shri Shaikh Mohd. Salim, ordered the confiscation of the seized foreign exchange of US . 6, 370, US . TCs 100/0, Euro 280. Stg. . 160, Qatar Rls. 300, UAE Dhm. 2300, BD 40, OR 154, O. Baisa 200, SR 2571 and KD 1619.50 recovered from the premises of M/s. Safar International Tour and Travels, Mumbai and Shri Shaikh Mohamed Salim under section 13 (2) of FEMA. He further ordered that since no direct evidence was found to link between the seized Indian Currency of Rs. 10,57,000/- with the contraventions, he refrained from passing any order of confiscation for the same. We intervene with the impugned order with respect to the seized Indian currency of Rs. 10,57,000/-. We order the confiscation of the said Indian currency of Rs. 10,57,000/- under section 13(2) of FEMA.
Issues:
1. Contravention of provisions of Foreign Exchange Management Act, 1999 (FEMA) 2. Confiscation of seized foreign exchange 3. Confiscation of seized Indian currency 4. Imposition of penalties on the involved parties Analysis: 1. The judgment pertains to a Revision Petition filed by the Enforcement Directorate against an order passed by the Special Director, Enforcement Directorate, Mumbai, imposing penalties for contravention of FEMA provisions. The penalties were imposed on two individuals for their involvement in illegal foreign exchange transactions amounting to Rs. 1,58,70,789/-. While foreign exchange worth Rs. 7,06,816.40/- was confiscated, the Ld. Adjudicating Authority refrained from confiscating the seized Indian currency of Rs. 10,57,000/-. No penalties were imposed on two other individuals associated with the case. 2. The Enforcement Directorate filed the Revision Petition to challenge the order and sought the confiscation of the seized Indian currency. The petition argued that the impugned order was erroneous in not confiscating the Indian currency despite clear evidence on record. 3. The Appellant's Counsel contended that the Adjudicating Authority failed to properly consider the facts presented by the Customs Department and the statements on record. The Counsel highlighted that the seized Indian currency was obtained through illegal means, as indicated in the impugned order. The Counsel urged the Tribunal to allow the petition. 4. The Respondents' Counsel, on the other hand, argued against reversing the order related to the seized Indian currency and requested the dismissal of the Petition. 5. Upon reviewing the submissions and evidence, the Tribunal found that the involved individuals were engaged in the illegal business of buying foreign exchange from the local market to sell to passengers traveling abroad. The organized network involved identifying passengers, obtaining foreign currency from them against Indian currency, and collaborating with external parties for currency transactions. 6. The Adjudicating Authority had imposed penalties and ordered the confiscation of seized foreign exchange but refrained from confiscating the Indian currency due to a lack of direct evidence linking it to the contraventions. However, based on the evidence and discussions, the Tribunal intervened with the order and directed the confiscation of the Indian currency amounting to Rs. 10,57,000/- under section 13(2) of FEMA. 7. Consequently, the Revision Petition/Appeal was allowed, and the matter was disposed of with the revised order for the confiscation of the Indian currency.
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