9911796707
TMI Blog2013 (2) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... namely "Bawarchi" in Partnership with his brother and brother-in-law. In December, 2007, he went to Iran. On 2-1-2003, the Deputy Director of Income Tax (Investigation) Unit-1(3) conducted search at the house of Khazim Boloor, the brother of the appellant and seized US $ 1,26,130. By a letter dated 6-1-2003, the third respondent informed the Assistant Director, Directorate of Enforcement, Hyderabad, to take necessary action in the matter. After obtaining authorization dated 9-1-2003 issued by the Director of Enforcement; foreign currency was taken over by the authorities under Section 37 of FEMA read with Section 132A of the Income Tax Act. As a part of the investigation under the FEMA, summons were issued to the appellant and Khazim Boloor. The latter appeared and in the statement under oath on 20-5-2003, he admitted that the foreign currency seized from him belongs to his brother, which was given to him while he was leaving for Iran on 26-12-2002. 3. The appellant came back on 3-1-2003 but he did not obey the summons dated 20-5-2003. He sent a communication on 26-5-2003 stating that (i) he is the owner of ancestral landed property admeasuring three shares of plaques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount will not give any money without entering into any agreement and Shri Nasir Boloor's failure to submit the said agreement clearly shows that this version has been given by him only to escape from the proceedings under FEMA, 1999. Further he has stated that Sri Deljoy, has sent US$ each through 19 persons who had come to India from Iran. He has produced copies of the passports of the said persons with his letter dated 21-8-2003. But he has not produced any evidence to show that the said 19 persons actually brought the said foreign currencies with them. Further the department also could not contact the said 19 persons and make further investigations, as Sri Mohd. Nasir Boloor, failed to produce the present addresses and whereabouts of the said persons, as undertaken by him during the course of investigation. During the course of personal hearing Shri Nasir, had produced a copy of the affidavit dated 12-6-2003 of Shri Gulam Deljoy, wherein Sri Deljoy, has stated that all the money which has been attached/confiscated by the tax officers of India were sent by him to Shri Nasir Boloor or for purchase of plots. But in the said affidavit he has not stated the exact amount which was se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon me u/s 13(2) of FEMA 1999. 5. The appellant, his father and his wife preferred appeals under Section 17(2) of the FEMA. By order dated 30-1-2006, the second respondent confirmed the confiscation order passed by the adjudicating authority but reduced penalty amount as noticed supra. The appellant then preferred appeal under Section 19 of the FEMA. The learned appellate Tribunal dismissed the appeals filed by the appellant, his father and wife. Submissions of the counsel 6. The senior counsel for the appellant would submit that the adjudicating authority (third respondent), the appellate authority and the appellate Tribunal ignored Regulation 6 of the Foreign Exchange Management (Export and Import of Currency) Regulations, 2000 (hereafter, Export Regulations) and Regulation 3 of the Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2000 (hereafter Possession Regulations). According to him, Export Regulations do not prohibit bringing of foreign currency not exceeding $ 5,000 or its equivalent and there is no necessity to make a declaration in CDF. He would also submit that as per Regulation 6A of Foreign Exchange Management ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw 8. The FEMA is a consolidating and amending law relating to foreign exchange. Besides, facilitating external trade and payments and promoting orderly development and maintenance of foreign exchange market in India, it also regulates and provides for managing foreign exchange transactions. Sections 3 and 4 are relevant and read. 3. Dealing in foreign exchange, etc. - Save as otherwise provided in this Act, rules or regulations made thereunder, or with the general or special permission of the Reserve Bank, no person shall- (a) deal in or transfer any foreign exchange or foreign security to any person not being an authorized person; (b) make any payment to or for the credit of any person resident outside India in any manner; (c) receive otherwise through an authorized person, any payment by order or on behalf of any person resident outside India in any manner. Explanation. - For the purpose of this clause, where any person in, or resident in, India receives any payment by order or on behalf of any person resident outside India through any other person (including an authorized person) without a corresponding inward remittance from any place outside Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h include imprisonment in civil prison. 10. The attention of this Court has been drawn to Regulation 6 of the Export Regulations, which reads. 6. Import of foreign exchange into India. - A person may - (a) send into India without limit foreign exchange in any form other than currency notes, bank notes and travellers cheques; (b) bring into India from any place outside India without limit foreign exchange (other than unissued notes) : Provided that bringing of foreign exchange into India under clause (b) shall be subject to the condition that such person makes, on arrival in India, a declaration to the customs authorities in Currency Declaration Form (CDF) annexed to these Regulations : Provided further that it shall not be necessary to make such declaration where the aggregate value of the foreign exchange in the form of currency notes, bank notes, or traveller's cheques brought in by such person at any one time does not exceed US $ 10,000 (US Dollars ten thousands) or its equivalent and/or the aggregate value of foreign currency notes brought in by such person at any time does not exceed US $ 5,000 (US Dollars five thousands) or its equivalent. 11. We may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... By G.S.R. No. 715(E), dated 23-10-2007, Regulation 5 of Repatriation Regulations was substituted and Regulation 6A was inserted, which reads as under. 6A. Period for surrender of received/realized/unspent/unused foreign exchange by Resident individual. - A person being an individual resident in India shall surrender the received/realized/unspent/unused foreign exchange whether in the form of currency notes, coins and travellers cheques, etc. to an authorized person within a period of 180 days from the date of such receipt/realization/purchase/acquisition or date of his return to India, as the case may be. 14. The FEMA is a comprehensive legislation dealing with foreign exchange, inter alia regulating the dealings and transfers of foreign exchange, transactions in India involving foreign exchange in association with acquisition or creation or transfer of assets, export, import and holding of foreign currency, the deposits between the persons resident in India and persons resident outside India and the like. Section 4 prohibits any person from holding, owning, possessing or transferring any foreign exchange or any immovable property situated outside India. Section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s money changer, off-shore banking unit or any person authorized under Section 10(1) to deal in foreign currency or foreign securities. The confiscating authority, the appellate authority as well as the Tribunal recorded a finding against him on the question of sale of property to Iran buyer as no agreement was produced and the affidavit filed by the buyer did not give the details of the amount sent through nineteen (19) persons. 18. The submission that the appellant can retain the amount for a period of 180 days is belied by reference to Regulation 5 of the Repatriation Regulations which obliges any person to sell the realized foreign exchange to an authorized person within seven days from the date of its receipt. The Regulation 6A on which reliance is placed no doubt provides 180 days for selling the foreign exchange but having been inserted by G.S.R. 715(E), dated 23-10-2007 with effect from 18-5-2007, it has no application to the case of the applicant. From the findings recorded by the authorities that the appellant unauthorisedly acquired foreign currencies and retained the currency in contravention of relevant Regulations is sound and a question of law would not arise o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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