1999 (4) TMI 664 - AT - FEMA

Summary

Issues:
Violation of provisions of section 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973 - Imposition of penalty - Appeal against Adjudication Order.

Detailed Analysis:

1. Violation of Provisions:
The appeal was against the Adjudication Order imposing a penalty of Rs. 40,000 on the appellant for contravention of section 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973. The appellant had made a pre-deposit of Rs. 10,000 as per an order by the FERA Board, and the balance amount was waived. The appeal was disposed of on merits after the deposit.

2. Allegations and Evidence:
The appellant was alleged to have received sums of money from an unknown local person on the instructions of a resident outside India, and made payments to unauthorized persons, contravening the Act. Various documents, including chits of paper seized during a search, Mahazars, and statements of the appellant, were relied upon as evidence.

3. Adjudication and Penalty Imposition:
The appellant did not file a written reply but was heard orally through counsel. The adjudicating authority found the appellant guilty based on the evidence and imposed a penalty of Rs. 40,000. The appellant's counsel sought leniency citing the appellant's health and financial situation.

4. Board's Analysis and Decision:
The Board noted the allegations of receiving and making payments, with specific details of transactions. While some evidence was accepted, the source of the money delivery remained unknown. The Board upheld the violation only regarding a specific amount of Rs. 1,05,000, reducing the penalty to Rs. 10,000, already deposited by the appellant.

5. Reduction of Penalty:
Considering the appellant's health and financial conditions, the Board reduced the penalty to the deposited amount of Rs. 10,000. The contravention of sections 9(1)(b) and 9(1)(d) was upheld only for the mentioned amount, and the respondent was directed to treat the deposited amount as payment of penalty.

This judgment highlights the process of adjudication in cases of foreign exchange regulation violations, the importance of evidence in proving contraventions, and the consideration of mitigating factors in determining penalties.