1999 (4) TMI 667 - AT - FEMA

Summary

Issues:
Violation of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973
Violation of section 14 of the Foreign Exchange Regulation Act, 1973

Analysis:

Violation of section 9(1)(b):
The appellant was alleged to have contravened section 9(1)(b) by receiving Rs. 50,000 in India on behalf of a non-resident, Krishan Lalwani. However, the tribunal found that the charge was misplaced as the appellant received the money for his own services and not on behalf of Lalwani. The tribunal highlighted that there is no prohibition for a resident Indian to receive money in India for services rendered. The tribunal concluded that the charge under this section was not sustainable based on the facts presented by the department.

Violation of section 14:
Regarding the alleged contravention of section 14, which involves owning or holding foreign exchange outside India, the tribunal noted that the department failed to charge the appellant under section 8(1) for acquiring foreign exchange in the USA. The tribunal emphasized that the charge under section 14 hinges on proving that the individual held foreign exchange abroad. The evidence presented, including Doshi's statement and seized documents, was deemed insufficient to prove that the appellant received foreign exchange equivalent to Rs. 2,50,000. The tribunal concluded that there was a lack of evidence to support the charge under section 14.

Conclusion:
The tribunal allowed the appeal, setting aside the penalties imposed on the appellant. It directed the respondents to refund the pre-deposited amount of Rs. 90,000 to the appellant within 45 days. The judgment highlighted the importance of substantial evidence in proving violations under the Foreign Exchange Regulation Act, emphasizing the need for clear and concrete proof to sustain charges.