The Appellate Tribunal found the Appellant in contravention of ...

Appellate Tribunal Confirms FERA Violation, Orders Bank Guarantee for Penalty; Adjusts Penalty for Proportionality.

June 15, 2024

Case Laws     FEMA     AT

The Appellate Tribunal found the Appellant in contravention of the Foreign Exchange Regulation Act (FERA) for instructing Indian Banks to credit accounts of non-residents, leading to prohibited transactions. The Tribunal directed the Appellant to provide an unconditional bank guarantee for the penalty amount u/s 52(2) of FERA. The Appellant's denial of responsibility despite initiating the transactions showed intentional engagement in prohibited activities. FERA aimed to regulate foreign exchange transactions for economic development. The burden of proof regarding culpable mental state was on the Appellant, which it failed to discharge, establishing abetment under FERA sections. The Tribunal deemed the penalty amount disproportionate to the offense and adjusted it for justice.

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