TMI Blog2019 (3) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... ne other person, in which Affidavit, it is claimed that amount totaling to ₹ 26,25,000/- was received by Shri Harish Kumar from the said person (Harchand Singh) on interest for using the same in his business of Goldsmith. It is correctly found in the impugned order that from the seized material and the above-mentioned statements, and find that the said statements, when read with in conjunction with the seized documents/material, brings out the facts that the contention of the Noticee that he was forced to make inculpatory statements is not correct. Not only that these statements are in the form of explanation to the seized documents, it is also a matter of records that the said statements were recorded by Shri B.C. Mahey, Assistant Director and not by Shri Balwinder Singh (the then Chief Enforcement Officer), as alleged by the Noticee. Therefore, as agreeing with the finding arrived in the impugned order that it is established beyond a reasonable doubt that during the years 2002 and 2003, the said Shri Harish Kumar @ Rinku without any general or special permission of Reserve Bank, received amounts totaling to ₹ 2,47,99,350/-, in India, otherwise then through an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 3. Facts are recorded in the impugned order, the same reads as under: (a) During the year 2003, an information was received in Jalandhar Zonal office of the Directorate of Enforcement that one Shri Harish Kumar @ Rinku S/o Shri Kanwar Bhan, R/o H.No. 1969, Sanatan Dharam Mandir, Rajpura Town, District Patiala (Punjab) was indulging in receipt and distribution of compensatory payments on a large and organized scale under the instructions of persons residing abroad. Acting on the above information, on 10.01.2004 the above-mentioned residential premises of Shri Harish Kumar @ Rinku was searched under section 37 of Foreign Exchange Management Act, 1999 read with section 132A(1) of the Income Tax Act, 1961, and as a result thereof Indian Currency totaling to ₹ 21,75,000/- and incriminating documents were recovered and seized. (b). Statement of Shri Harish Kumar @ Rinku was recorded under Section 37 of Foreign Exchange Management Act, 1999 read with Section 132(4) of Income Tax Act, 1961 on 10.01.2004 in which he, inter-alias, stated that his friend Madan, earlier residing in Phase-11, Mohali, Punjab, had gone to U.S.A about 3-4 years ago; that the said Madan propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransactions in the end of every month. While explaining the seized loose sheets marked 1 to 10 and the Diary containing written pages 1 to 10 recovered and seized from his residence he stated that these contained the detailed accounts of receipt and distribution of Hawala Payments; that page No. 7 of the seized loose sheets contained Account No. 181-3-611439 of Hongkong Shanghai Corporation, Kawaloon Branch of one Usman Niyaz Ahmed Sheikh in which Madan was transferring money from U.S.A; that as per page No. 6 of the seized loose sheets he received total amount of ₹ 43,75,000/-on the instructions of Madan residing in America and the Peti written on this page meant ₹ 1,00,000/-; that as per this page he received ₹ 9,00,000/-, ₹ 700,000/-; ₹ 700,000/-; from Singh ₹ 11,50,000/- from Pali, and ₹ 9,25,000/- from Happy under the instructions of Madan residing in U.S.A which he distributed among the persons residing in Patiala, Nakodar, Dhada, Nawanshehar and other areas. On this page 13-29-500 is written before fax which meant that he had distributed ₹ 13,29,500/- to the persons whose details were given in the fax sent by Madan. Whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar Market, Karol Bagh, Delhi which dealt in sale/purchase of foreign exchange, in which he and his father Shri O.P. Ahuja were Directors; that phone No. 25850156, 25755249 were installed at his Residence; Phone No. 25767036, 25801182 were installed at his Shop and his Mobile number was 35002900; that he knew Harish Kumar @ Rinku who was residing in Punjab; that he had given Shri Harish Kumar @ Rinku had visited his Shop two-three times; that when confronted with the Statement dated 10.01.2004 of Shri Harish Kumar @ Rinku, in which he had stated that he had been receiving money from Shri Harvinder Ahuja @ Happy under the instructions of Madan residing in America, he stated he knew Shri Harish Kumar @ Rinku, but had no business with him. Though Shri Harvinder Ahuja @ Happy in his statement dated 03.02.2004 denied any business dealing with Shri Harish Kumar @ Rinku, the documents seized from the Residential premises of Shri Harish Kumar @ Rinku clearly mentioned his name Happy as well as the amounts received by Shri Harish Kumar @ Rinku from him; the total of such payments made by him to Shri Harish Kumar @ Rinku as recorded in the said documents aggregated to ₹ 61,00,000/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in this Diary in the shape of current account so that in case of seizure of these papers, the details of the persons to whom he had distributed the money had been written but the complete details of the persons to whom the money had been distributed was not mentioned in this diary; that the amounts written on the left/right side of the diary had been received by him for distribution from the agents of Shri Harvinder Ahuja @ Happy of Delhi, as per instructions of Madan of USA; that as per Page No. 6 of the Diary he had distributed an amount of ₹ 1,45,69,900/- to different persons as per instructions of Madan of USA, and the balance amount had been received by him in the shape of commission; that he had written the current account of amounts received as per instructions of Madan of USA, in his Diary. (g). Further summons were issued to Shri Harish Kumar @ Rinku on 28.03.2005, 01.04.2005, 12.04.2005, 7.6.2005, 12.7.2005, 27.7.2005, 18.8.2005 and 3.10.2005 but he did not appear in the Office of Directorate of Enforcement, Jalandhar. However, vide his Representation dated nil addressed to the Assistant Director, he inter-alia, claimed that the seized amount was sale proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tried with the appellant, the allegation of receiving payment could have been substantiated with adequate evidence. 7. It is true that the appellant had retracted his statements during the course of investigations as they have been recorded forcefully under the dictation of Shri Balvinder Singh, Enforcement Officer. 8. It is stated on behalf of appellant that as the statements were recorded under the signature of Sh. B.C. Mahey, Assistant Director, the Ld. Adj. Officer did not entertain the appellant s submission and also disallowed the request for cross examination of Sh. Balvinder Singh. It is alleged that had the cross examination been allowed, it could have been proved that it was Sh. Balvinder Singh who recorded the appellant s statements. Denial of cross examination is in violation of principles of natural justice. The appellant had every right to prove his innocence which right has been violated by not allowing the cross examination. 9. It is also alleged that no materials should be relied on against the appellant without his being given an opportunity of explaining them. It is hardly necessary to emphasize that the right to cross-examine the witnesses who give evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant provisions of FEMA, based upon the documents and Indian Currency recovered and seized from his residence, on 10.01.2004 itself. 14. In his statement, Shri Harish Kumar has mentioned facts which were in his knowledge, which could not have been extracted from him, besides providing explanation to the contents of the seized documents, as also with regard to the seized Indian currency. 15. In this statement as also in his subsequent statement dated 15.03.2005, which too was tendered by him before Shri B.C. Mahey, the then Assistant Director, he has mostly explained the contents of the seized documents, besides his modus operandi. Most of the documents recovered/seized were written by Shri Harish Kumar himself, as admitted in his statement dated 15.03.2005. 16. From the above documents/statements the Investigating Officer became aware of the identity of various persons from whom Shri Harish Kumar had been receiving payments in India, under instructions of his friend Madan, residing in USA, who was earlier residing in Mohali. In view of other certain searches were conducted and a number of persons examined and their statements recorded under FEMA, which brought out corrobo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the expiry of almost more than four years. The said period is long period of time. It is after thought thus has no value in the eyes of law. 21. Therefore the penalty is rightly imposed upon the said Shri Harish Kumar @ Rinku penalty of ₹ 25,00,000/- (Rupees Twenty-Five Lakh Only), for the above-mentioned contraventions as well as recovery of the Indian Currency of ₹ 21,75,000/-, from his residential premises on 10.01.2004. The amount is also in contraventions in terms of Section 13 (2) of the said Act. 22. The admission made by the appellant are corroborated with other evidence. Therefore, there is no merit in the appeal. As far as, it is held the seizure of ₹ 21,75,000/- from his residence; be kept by the respondent and shall be forfeited by the respondent as valid, no interference is needed. 23. With regard to the penalty of ₹ 25,00,000/- is concerned, it has come on record that appellant is not in a position to deposit the said amount. The appellant is suffering from undue hardship. The financial condition of the appellant is very weak. He has been residing in House No. 1969, Rajpura Town, Punjab, on rent from the last many years. An affi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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