Foreign exchange liability requires proof of non-resident status; a visiting card alone is insufficient to sustain penalties.

Liability under sections 9(1)(a) and 9(1)(b) of the Foreign Exchange Regulation Act, 1973 depends on proof that payment was made to, and remittance received on behalf of, a person resident outside India. A citizen of India is not to be treated as a person resident outside India unless the facts bringing him within the statutory exclusion from sections 2(p) and 2(q) are established. A visiting card alone was held insufficient to prove that status. In the absence of concrete, legally acceptable evidence, the basic ingredient of the alleged contravention remained unproved and the penalties and confiscation could not be sustained.

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Issues: Whether the alleged contravention of sections 9(1)(a) and 9(1)(b) of the Foreign Exchange Regulation Act, 1973 was proved, in view of the dispute whether Hameed Abdul Kader was a person resident outside India within the meaning of sections 2(p) and 2(q) of the Act.

Analysis: Liability under sections 9(1)(a) and 9(1)(b) depended on proof that the payment was made to, and the remittance received on behalf of, a person resident outside India. A citizen of India is not to be treated as a person resident outside India unless the necessary facts bringing him within the exclusion from section 2(p) are established. The authorities relied essentially on a visiting card, but that material by itself was held insufficient to prove the status of the person concerned. In the absence of concrete and legally acceptable evidence, the basic ingredient of the charge remained unproved.

Conclusion: The alleged violations were not substantiated and the penalties and confiscation could not be sustained.

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