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TMI Blog2024 (6) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... her appellant was not involved in any illegal activity taking place at the premises? - r eliability of statements of Jaspal Singh Saluja, who had retracted his statements. HELD THAT:- The noticee was indulging in accepting and placing bets on cricket matches on behalf of his clients that the investigations made revealed that the noticee Shri Satpal Singh Vig had 19 clients who were based overseas out of which accounts of 11 were retrieved from the seized computer which are annexed as `relied upon documents . The net amount outstanding at the end of series of bets accepted/placed by a particular overseas client is arrived at in a manner explained in detail Complaint. As seen that there were 25 outstanding accounts bifurcated into two groups of 15 and 10 being `received/receivable and `paid/payable respectively. It is also mentioned in the Complaint that one Shri Manojbhai based in Dubai is handling these accounts i.e. the dealings with overseas clients on behalf of Shri Satpal Singh Vig@Pali. Therefore section 3(d) of FEMA 1999 is invoked in respect of these amounts and it is appropriate given the nature of transactions involved. These amounts are bets accepted/placed and there is/c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RI : CHAIRMAN And SHRI BALESH KUMAR : MEMBER For the Appellant : Shri Suryanarayan Singh Shri Varun Lal, Advocates For the Respondent : Shri Shoumendu Mukherji Ms. Akanksha Gupta Ms. Megha Sharma, Advocates ORDER FPA-FE-17/MUM/2009 This order would dispose of the appeal preferred by the appellant against the Adjudication Order passed by the Special Director on 31.12.2008. A penalty of Rs. 26 lakhs was imposed for the contravention of Section 4 of the Foreign Exchange Management Act, 1999 (for short `the Act of 1999) and a sum of Rs.98 lakhs for the contravention of Section 3(d) of the Act of 1999. 2. The brief facts of the case are that the respondent received a specific information that the appellant and one Jaspal Singh Saluja were receiving and accepting bets on scores and outcome of cricket matches and other sporting events on behalf of their clients and bookies based locally, nationally and internationally. Their business premises was Flat No. 7, 2nd Floor, Suraj Apartments, Behind ICICI Bank, Ram Maruti Road, Naupada Thane. A search was conducted on 02.08.2004 where documents of incriminating nature in terms of the mobile phones, computers, TV, recording systems, laptop, audi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used cannot be treated as substantive evidence to press into service in passing the order. The Special Director has relied on the statement made by the appellant though it could not have been taken as a piece of evidence to book the appellant and otherwise the statement of co-accused could not have been taken to be a substantive evidence especially when it is not supported by other corroborating evidence. 7. It is also submitted that the documents alleged to have been recovered during the course of raid were written by Anik Shah but he was not compelled to appear before the authority thus, documents could not have been relied. The respondents failed to make endeavour to record the statement of Anik Shah who is said to be the author of the documents seized by the respondents. The reference of the judgment of the Apex Court in the case of TakhajiHiraji Vs . Thakore Kubersing Chamansing reported in (2001)6 SCC 145 has been given. In absence of the statement of Anik Shah, the documents recovered at the time of raid could not have been pressed into service. However, the Special Director ignored the aforesaid while relying on the documents against the appellant. 8. It is further submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he material to prove the contravention of the provisions of the Act of 1999 by the appellant. During the course of search, the various mobile phones, computers, TV, recording systems, laptop, audio cassettes and Indian currency were recovered and seized under Panchnama. It was in the presence of the employee Jaspal Singh Saluja. The retraction of the statement was not immediate but after a lapse of considerable period which could not have been accepted and in absence of retraction, the Department could prove the statement to have been taken under freewill of the appellant and others. In the statement, Jaspal Singh Saluja explained the activities carried out by the appellant in cricket betting and he also vividly explained the documents seized from the premises of the appellant. 13. The premises was taken on rent by the appellant and the work was looked after by Jaspal Singh Saluja apart from the appellant. It is not that only the statements of the appellant and Jaspal Singh Saluja have been relied but the material seized during the course of search was also relied and it was sufficient to substantiate the allegation against the appellant. It is further submitted that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in Flat No. 7, 2nd Floor, Suraj Apartments, Behind ICICI Bank, Ram Maruti Road, Naupada Thane on the specific information about the involvement of the appellant regarding the receipt of amount on the scores and outcome of the cricket matches for their clients and bookies which are nationally and internationally working. The statement of the person engaged by the appellant i.e. Jaspal Singh Saluja was recorded on 02.08.2004 itself followed by his statements on 03.08.2004, 08.09.2004 and 11.10.2004. The statement of the appellant was recorded on 03.08.2004, 04.08.2004 and 06.08.2004. 16. The Special Director has not recorded finding solely based on the statements of appellant and Jaspal Singh Saluja who is said to be co-accused but also based on the documents recovered from the premises. The record further shows that summons were sent to Anik Shah to seek his presence but despite repeated efforts of the respondents, he did not appear. Thus, it is not a case where the respondents failed to produce the relevant witness deliberately rather they made all the efforts for his production. It may be that the Special Director has made an observation that the appellant could have produced An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial to substantiate the allegation against the appellant said to have been written by Anik Shah who was summoned by the respondents but did not appear. There is no illegality, if the documents written by Anik Shah have been relied, which were otherwise recovered at the time of search and seized under the Panchnama signed by Shri Saluja. The documents contained even in the nature of fax messages out of which few were not legible but others were legible. The fax transmission cover sheet sent to M. Abhishek on 27.06.2004 enclosing there with bank wise details and giving details regarding the previous balance amount received from Manojbhai and total balance was 1,64,181.00 Dhs. The fax addressed to Palibhai by Abhishek was again in reference to 55,165 Dhs. Transferred to Abhishek account in UK leaving the balance of 24835 Dhs. There were such similar material referred by the Special Director in his order. It is further alleged that the statements of Manojbhai and Abhishek of Dubai have not been recorded but they were not available in country. 19. Regarding his contention that the Complaint contains terms `received/receivable and `paid/payable which cover amounts of Rs.51,13,900/- an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Special Director apart from the other material. 21. The case in hand is not such where the respondents could not prove the case by adducing the evidence otherwise if we enter into other facts and the evidence, it would be sufficient to show that substantial evidence was led by the respondents to prove the case, however, what has been referred by us would also be sufficient to find out the case against the appellant. Thus, we do not find any error in the findings recorded by the Special Director. 22. The issue now remains about the penalty. A penalty of Rs. 26 lakhs has been imposed for the contravention of Section 4 and Rs.98 lakhs for Section 3(d) of the Act of 1999. We find the penalty amount to be in excess to the contravention of the amount involved therein. The appellant has already deposited Rs.50 lakhs towards the pre-deposit pursuant to the order of Bombay High Court though the Tribunal passed an order to deposit 60% of the amount to satisfy the condition of pre-deposit. In any case, to make the penalty amount proportionate to the contravention, we reduce it and accordingly for contravention of Section 4 of the Act of 1999, penalty of Rs.10 lakhs is imposed and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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