TMI Blog2013 (2) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... currency in contravention of relevant Regulations. Appellant got the foreign currency towards consideration of sale of his immovable property in Iran. Even if such a transaction is assumed to be true, he could not have got or received the money the way he got - No agreement was produced and the affidavit filed by the buyer did not give the details of the amount sent through nineteen (19) persons – Appeal fails and is accordingly dismissed – Against the assessee. - 2 of 2011 - - - Dated:- 30-12-2011 - V.V.S. Rao and B.N. Rao Nalla, JJ. REPRESENTED BY : Shri Ch. Pushyam Kiran, Counsel, for the Appellant. Shri V. Gopala Krishna Gokhaley, Counsel, for the Respondent. [Judgment per : V.V.S. Rao, J.]. The Special Appeal is filed under Section 35 of the Foreign Exchange Management Act, 1999 (hereafter the FEMA) against the order dated 1-8-2008 in Appeal No. 51 of 2006 passed by the Appellate Tribunal for Foreign Exchange, New Delhi. By the said order, the Appellate Tribunal confirmed the order, dated 30-1-2006 of the Special Director (second respondent herein), whereby and whereunder the appeal filed under Section 17 of the FEMA was dismissed confirming the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... $ 5,000 sent by the purchaser from Iran. He also enclosed a copy of Currency Declaration Form (CDF) dated 11-10-2002 in proof of his father declaring $ 20,000 at Bombay Airport. 4. After completing necessary investigation, the third respondent issued a show cause notice dated 23-8-2003. The appellant was asked to explain as to why adjudication proceedings contemplated under Section 13 of the FEMA should not be held for contravention of the provisions of Section 3(a) and 4 of the FEMA and why the foreign currency should not be confiscated to the Central Government under Section 13(2) of FEMA. The appellant submitted explanation reiterating the same pleas. During the enquiry by the adjudicating authority, the appellant produced the Verdict dated 28-8-2003 of Iranian Court declaring the appellant s father as the owner of the property. He also produced an affidavit dated 12-6-2003 allegedly signed by the purchaser Gulam Deljoy declaring that he had remitted lot of monies in dollars to the appellant as sale proceeds of the plot of land inherited by his father. The third respondent gave personal hearing to the appellant, his father Masha Alla Ali and his brother and ordered confiscat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermission of the Reserve Bank of India. Further, as per Reserve Bank of India Regulation No. 33 of Foreign Exchange Management (Possession and Retention of Foreign Exchange Regulations 2000) dated 3-5-2000 and any person is permitted to possess foreign exchange upto US$ 2000 if it is legally acquired. Otherwise no person resident in India is permitted to possess or retain any foreign exchange with him. Shri Mohd. Nasir Boloor, though an Iranian Passport holder is residing in India for a long period and is doing business in India. Hence he is a person residing in India. In terms of Section 4 of FEMA 1999 he cannot hold or possess the said foreign currencies with him. I, therefore, hold him guilty of contravening the provisions of Section 3(c) and 4 of FEMA 1999 read with the aforesaid regulations and pursuant to powers conferred upon me under Section 13(1) of FEMA 1999 I impose a penalty of Rs. 5,00,000/- (Rupees five lakhs only) on Shri Mohd. Nasir Boloor Mehdi Abadi, for contravening the provisions of Section 3(a) and 4 of FEMA 1999 read with the aforesaid notifications. Since the above said seized foreign currencies of US$ 1,26,130 have been unauthorisedly acquired and possessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n buyer was not considered by the authorities. Reliance is placed on Fatima Mohd. Amin v. Union of India Mil - (2003) 7 SCC 436 and P.P. Abdulla v. Competent Authority - (2007) 2 SCC 510 = 2007 (207) E.L.T. 163 (S.C.). 7. The senior standing counsel for Central Excise and Customs Department reiterated the respondents position as brought out in the counter affidavit of the third respondent. He would also further submit that Regulation 6A of the Repatriation Regulations was inserted by an Amendment vide G.S.R. 715(E), dated 23-10-2007 with effect from 18-5-2007. The said Regulation enables the person to retain and keep the foreign currency for a period of 180 days before the surrender or encash, which does not apply to the facts of the case. According to him, Regulation 5 of the Repatriation Regulations as it stood in 2003, obliges every person to sell the realized foreign currency within seven days from the date of receipt and when once such requirement is violated. Sections 3 and 4 are attracted. He would also contend that the third respondent has given valid and acceptable reasons with regard to the improbabilities for not accepting the case of the appellant. The case of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an authorized person de hors the Rules, the Regulations and the provisions of the FEMA is prohibited. Similarly, if a person makes any payment to the credit of any person residing outside India or receives otherwise than through an authorized person, any payments by order on behalf of any person resident outside India in any manner or enter any financial transaction in India as consideration for acquisition or creation or transfer of right to acquire any asset outside India by any person is an offence. All such transactions can only be in accordance with the Rules and Regulations made under the FEMA. The term authorised person is defined in Section 2(c). It means an authorized dealer, money changer, off-shore banking unit or any other person authorized under Section 10(1) to deal in foreign exchange and foreign securities. A person resident outside India means a person who is not resident in India [Section 2(w)]. As per Section 4, except as provided by FEMA, no person resident in India shall acquire, hold, own or possess or transfer any foreign exchange, foreign security or any immovable property situated outside India. Further the acquisition of immovable property or transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ident in India and who is on a visit to India, as honorarium or gift or for services rendered or in settlement of any lawful obligation; or (c) was acquired by him by way of honorarium or gift while on a visit to any place outside India; or (d) represents unspent amount of foreign exchange acquired by him from an authorized person for travel abroad. 12. The Regulation 5 of Repatriation Regulations reads as under. 5. Period for surrender of realized foreign exchange. - A person not being an individual resident in India shall sell the realized foreign exchange to an authorized person under clause (a) of sub-regulation (1) of regulation 4, within the period specified below : (i) foreign exchange due or accrued as remuneration for services rendered, whether in or outside India, or in settlement of any lawful obligation, or an income on assets held outside India, or as inheritance, settlement or gift, within seven days from the date of its receipt; (ii) in all other cases within a period of ninety days from the date of its receipt. (emphasis supplied) 13. By G.S.R. No. 715(E), dated 23-10-2007, Regulation 5 of Repatriation Regulations was sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he has not violated Sections 3, 4 and the Possession Regulations or Repatriation Regulations. According to him, he acquired the foreign currency allegedly by selling his property in Iran, gave a declaration in CDF when he brought major chunk of foreign currency in January and October, 1999; his vendor sent the money through nineteen persons each getting $ 5000 which is within the permissible limits as per the Export Regulations, and he has 180 days to keep the money before encashing through an authorized person. These submissions are not properly substantiated with reference to the law as noticed hereinabove. 17. Section 3(c) of the FEMA prohibits any person from receiving foreign currency otherwise than through an authorized person. Admittedly the appellant got the foreign currency towards consideration of sale of his immovable property in Iran. Even if such a transaction is assumed to be true, he could not have got or received the money the way he got. The law requires remittances to be made only through an authorized person as defined in Section 2(c), which means money changer, off-shore banking unit or any person authorized under Section 10(1) to deal in foreign currency or f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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