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TMI Blog2008 (7) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... f litigation where the matter was earlier decided by this Tribunal vide its order dt. 01.04.03 which was set aside by Hon'ble High Court of Mumbai vide its order dt.31.08.07 and the matter was remanded back to the Tribunal for afresh decision according to Law. Vadilal Shah, the appellant in appeal no.307/91, died on 09.11.02 where an application was moved by the legal representatives, his wife, Mrs. Vasanthben Shah and his sons Hitendra Shah and Raju Shah which was allowed and they were substituted in place of deceased appellant. 4. I have heard elaborate arguments from Shri. Madhu M. Patel, Advocate, on behalf of the appellant and Shri. A.C. Singh, DLA, for the respondent and gone through the record, relevant law and judicial pronouncements carefully. The SCN No. T-4/33-B/SDE/PKA/97 (SCN-XII) dt.12.03.97 was issued against the appellants allelging that one Niranjan J. Shah, a person resident in India, had received payment of Rs. 38,60,823 in India during September, 1991 to May, 1992 from appellants Vadilal Shah, Hitendra Shah, Mrs. Vasantben Shah and Mrs. Alka Shah without general or special exemption granted by the RBI, as consideration for acquisition/receipt of US $ 149806. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eof from Niranjan Shah where they wanted to claim immunity under the remittances of Foreign Exchange Immunities Act, 1991. But the Adjudicating Officer observed that the appellants were not entitled to said immunity and were held guilty under Section 9(1)(f)(i) of the Foreign Exchange Regulation Act, 1973 where being aggrieved this appeal has been preferred by the appellants against the impugned order. 8. It is argued by Ld. Advocate, Shri. Madhu ML Patel that though Niranjan Shah in his statement described the mode of arrangement adopted by him for remittance of foreign exchange in the form of gifts from NRE A/c but he did not name the appellants in his statement. The appellants did not receive the gift from Niranjan Shah. The gifts were received by the appellants from abroad which were mentioned by the appellants in the return of income in their income tax return. The assessing officer has accepted the return of income filed by them which includes the gift item received from Niranjan Shah during Immunity Scheme 1991-92. No inference could be drawn against the appellants on the basis of floppies recovered from the custody of Niranjan Shah. The statutory declaration of the gift che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Jairaj Java with Bank of New York. 11. Jairaj V. Java in his statements dt. 20.09.95 and 21.09.95 under Section 40 of FERA had deposed that two remittances of US $ 2 lakhs each were received into his account with Bank of New York, New Yort from the bank accounts in Dubai of Nilesh Vadhani as per arrangement made by Harshad Mehta, Bombay through Niranjan J. Shah. The names of Mr. P.G. Mehta, Mrs. C.P. Mehta, J.P. Mehta and P.G. Mehta are figured in the list at pages 3 4 of seized file A-9 against US $ 25000 each. It has been found on investigation that the respective persons had received US $ 25000 each on 8/10.10.91. S.K. Patel, Pranit S. Patel and certain other recipients, Ravindra S. Borkar, Pramod K. Desai and Jyoti R. Borkar had admitted in their statements recorded under Section 40 of the FERA that they had received remittances as recorded in the seized documents. The amounts were found recorded against date 30.10.91 on the debit side of Niranjan's A/c at page 71 of A-3 and also the corresponding credit entry in favour of Nilesh J. Vadhani for the remittances made to these persons at page 164 of document marked A-11. The appellants are also such recipients whose names f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid down by the Supreme Court in this regard in State of Rajasthan v. Kashi Ram AIR 2007SC 144 at Page 150. In this case the accused was not on cordial terms with his wife who was last seen with his wife and daughter in the evening of 3.2.98 in his house. The house was found locked on 4 th 5th and 6th February 1998 and on 6th February 1998, the dead bodies of wife and daughter were found from the house who were found strangulated. The accused continued traceless till he was arrested after about ten days on 17th February 1998 who failed to offer any explanation in defence. The Court observed that incriminating circumstances formed complete chain to prove the guilt of accused. The Court observed: There is considerable force in the argument of counsel for the State that in the facts of this case as well it should be held that the respondent having been seen last with the deceased, the burden was upon him to prove what happened thereafter, since those facts were within his special knowledge. Since, the respondent failed to do so, it must be held that he failed to discharge the burden cast upon him by Section 106 of the Evidence Act. This circumstance, therefore, provides the missing li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns which have not been answered by .the appellant which leads to unmistaken conclusion that the appellants have rightly been held guilty by the Adjudicating Officer. In view of the above discussions, I find no force in the averment of Ld. Advocate that the there is no evidence that the appellants made any payment to Niranjan Shah in lieu of gift cheques which have directly come from Dubai, outside India in foreign exchange. Niranjan Shah has not admitted receipt of any cash payment in lieu of gift cheques. It is argued by Learned Advocate that the Enforcement Officers have obtained the confessional statements of other recipients under compelling circumstances where the case of appellants was distinguishable from them which is not acceptable. However, common human conduct does not permit gifting away of huge sum of money to some unknown persons. The presumption of fact in the circumstances can be drawn against the appellant. Section 114 of the Evidence Act provides that the court may presume existence of any fact which it thinks likely to have happened regard being had to the common course of natural events, human conduct and public and private business in their relation to the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Foreign Exchange and Investment in Foreign Exchange (Immunities Exemptions) Act, 1991 whieh hereinafter referred to as the Act . Under Section 2 (b), remittances means remittance made in foreign exchange by any person resident outside India to a person resident in India on or after the date of commencement of this Act, but before the specified date, in the form of draft, travelers cheques, cheques drawn on banks situated outside India, telegraphic transfers, mail, transfers, money orders or by way of transfer from Non-resident (External) Account, Foreign currency Non-Resident Account or Foreign Currency Non-Resident Special Deposit Account maintained in India under the rules made under the FERA, 1973. 20. Section 3 (1) sets out that no recipient who claims immunity under this Chapter, in accordance with such scheme as the Reserve Bank of India may by Notification in the official gazette, specify for the purpose of receiving remittances under this Chapter, shall not be required to disclose for any purpose whatsoever, the nature and source of the remittance to him. Section 3 (2) sets out that nothing in sub section (1) shall apply to any foreign exchange which is required to be brou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey have rightly been held guilty by the Adjudicating Officer. Now coming to the question of the quantum of the penalty amount, it is argued on behalf of the appellants that this Tribunal in appeal no.490 491/01 in the matter of Hitesh vs. Bawaria Anr., vide its judgement dt.16.03.06 has taken a lenient view in the similar circumstances and reduced the quantum of penalty to minimum. However, each case is to be decided on its own merits depending on tine gravity of the charges. Having considered the gravity of the charges in the appeals where substantial amount is involved in the contravention, the contention is liable to be rejected. However, considering the fact that the amount has been declared with the income tax assessing officers, and is not meant for hawala payments, I am of the view that the amount of the penalty is excessive, which should be reduced to 75% of the total penalty imposed against the appellants to achieve the ends of justice. The appeals are, therefore, liable to be partly allowed. The appellants have made payment of the 20% of the amount of penalty which may be appropriated towards penalty. The appellants are directed to deposit the balance amount of penalty i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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