1996 (9) TMI 670 - AT - FEMA

Summary

Issues:
1. Penalty imposition under section 9(3) of the Foreign Exchange Regulation Act, 1973.
2. Applicability of Act to a British subject.
3. Evidence supporting the finding of contravention of section 9(3).
4. Allegations and charges based on the show-cause notice.
5. Examination of receipts and statements as evidence.
6. Conclusion on the charge of contravention of section 9(3).

Detailed Analysis:
1. The appellant filed an appeal against a penalty imposed for contravention of section 9(3) of the Foreign Exchange Regulation Act, 1973. The charge was based on statements made by the appellant in 1986. The argument presented was that the charge could not be sustained based on the evidence provided, leading to a decision to hear the appeal on merits without pre-deposit.

2. The appellant, a British subject, argued that the Act's provisions should not apply as he was not in India when the alleged contravention occurred. However, the focus shifted to challenging the charge itself rather than the applicability of the Act. The contention was that even assuming the facts as presented by the department, the charge of contravention could not be established.

3. The evidence relied upon to support the contravention finding was scrutinized. The respondent alleged that the appellant remitted funds from England to India through unauthorized channels. However, upon careful consideration, it was found that the evidence did not substantiate the charge under section 9(3) as it failed to establish the remittance from a foreign country to India through unauthorized channels.

4. The allegations and charges outlined in the show-cause notice were analyzed. It was observed that the factual allegations did not align with the requirements of section 9(3) of the Act. The charge of contravention could not be sustained based on the allegations presented in the notice, highlighting a lack of compliance with the legal provisions.

5. The examination of receipts and statements as evidence played a crucial role in the analysis. Receipts acknowledging payments were reviewed, and it was determined that they did not support the allegation of remitting funds to a specific entity. Additionally, statements made by the appellant did not indicate instructions to remit funds, further weakening the case against the appellant.

6. Ultimately, the tribunal concluded that the charge of contravention of section 9(3) was not established based on the facts alleged and the evidence presented. As a result, the impugned order penalizing the appellant was set aside, and the appeal was allowed in favor of the appellant.