2008 (6) TMI 647 - AT - FEMA

Summary

Issues:
1. Imposition of penalties under sections 9(1)(b) and 9(1)(d) of FER Act, 1973 for receiving payment from NRE account.
2. Violation of principles of natural justice in passing the impugned order.
3. Burden of proof in economic offenses and presumption of facts under the Evidence Act.
4. Denial of inspection and cross-examination rights in adjudication proceedings.

Detailed Analysis:

1. The appeal was against an adjudication order imposing penalties on the appellant and a co-noticee for receiving payment from an NRE account in contravention of sections 9(1)(b) and 9(1)(d) of the FER Act, 1973. The appellant contended that the payment was a gift from a non-resident, supported by a gift deed, and that he did not know the co-noticee. The respondent argued that the appellant failed to provide a plausible explanation for receiving a substantial amount as a gift, leading to a clear contravention of the Act. The appellant's failure to prove the existence of love and affection raised doubts, and the burden of proof was on the appellant to explain the gift under section 106 of the Evidence Act, 1872.

2. The appellant claimed a violation of natural justice as he was not allowed to inspect seized documents or cross-examine the co-noticee. However, the respondent contended that inspection was offered, and no request for cross-examination was made during the proceedings. The burden of proof in economic offenses was discussed, emphasizing that the prosecution is not required to prove facts within the accused's knowledge. The appellant's failure to explain the sudden gift raised suspicions, and the denial of cross-examination was deemed not prejudicial without a valid reason.

3. The judgment highlighted the principles of burden of proof in economic offenses, citing the Collector of Customs v. D. Bhoormull case. It emphasized that the burden is on the accused to explain facts within their special knowledge, and failure to do so may lead to adverse inferences. The judgment also referred to the importance of cross-examination in establishing facts, noting that the right must be justified and not used to prolong proceedings without valid reasons. The appellant's failure to request cross-examination during adjudication was considered an afterthought and not permitted to lengthen the proceedings.

4. Ultimately, the Tribunal upheld the adjudication order, finding no fault in it. The penalty imposed was deemed reasonable and not excessive, warranting no interference. The appeal was dismissed for lacking merit, and the adjudication order was sustained and maintained without any identified errors.