1999 (4) TMI 662 - AT - FEMA

Summary

Issues Involved:
1. Residential status of the appellant.
2. Validity of the findings of the Adjudicating Officer.
3. Directions for repatriation of sale proceeds of the appellant's house in London.
4. Directions for repatriation of the amount of pound sterling 749.33.

Issue-wise Detailed Analysis:

1. Residential Status of the Appellant:
The appellant contested the requirement of pre-deposit, arguing that the findings regarding his residential status were unsustainable. He claimed he was a person resident outside India during the relevant period, which, if upheld, would absolve him of the charges under the SCNs. The adjudicating officer had noted that the appellant "returned to India in the year 1982" and frequently traveled for business, concluding that he was a person resident in India under sections 2(p)(ii)(b) and (c) of the Act. However, the Board found that the adjudicating officer failed to provide a categorical finding on when the appellant ceased to be a non-resident. The evidence showed the appellant had established business in London and continued his business activities abroad even after 1986-87. His stay in India was involuntary due to legal proceedings, and he maintained his business and properties in the UK. Thus, the Board concluded that the appellant never ceased to be a person resident outside India.

2. Validity of the Findings of the Adjudicating Officer:
The adjudicating officer's conclusion that the appellant was carrying on business in India was based on unreliable evidence. The business of International Stamps and Coins was a partnership involving the appellant's wife and another partner, Todywala. The appellant's role was managerial, not ownership. The Board noted that proper investigation into the partnership's affairs was lacking. The evidence did not support the finding that the appellant intended to stay in India indefinitely. The Board emphasized that the fulfillment of the second element of the definition under section 2(p)(ii) was a pre-condition for considering the third element. Since the appellant did not cease to be a person resident outside India, the charges could not be sustained.

3. Directions for Repatriation of Sale Proceeds of the Appellant's House in London:
The adjudicating officer directed the appellant to dispose of his house in London and repatriate the sale proceeds to India. The Board found this direction to be without jurisdiction, as section 63 of the Act did not empower the adjudicating authority to issue such directions. The power to issue such directions was specifically conferred on the Central Government under the now-omitted sub-section (3) of section 25. Therefore, the direction was set aside.

4. Directions for Repatriation of the Amount of Pound Sterling 749.33:
The adjudicating officer also directed the appellant to repatriate the amount of pound sterling 749.33. The Board set aside this direction as well, given the conclusion that the appellant was not guilty of the charges.

Conclusion:
The appeal was allowed, and the impugned order was set aside. The Board found that the appellant was not a person resident in India during the relevant period, invalidating the charges and the directions issued by the adjudicating officer.