FEMA penalty for missing Bill of Entry fails where import is proved and secondary evidence shows no foreign exchange misuse

Under FEMA, non-production of the original Bill of Entry does not by itself establish a contravention where the import is otherwise proved and secondary evidence is admissible. The note applies the principle that a photocopy bearing customs endorsement, coupled with an explanation that the original is lost or unavailable without negligence, is sufficient to rebut a purely procedural lapse. The enforcement authority must still prove a substantive misuse of foreign exchange or other culpable conduct. On the facts described, no such material was shown, so the penalty was treated as unsustainable and the impugned order was set aside.

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Issues: Whether penalty under the Foreign Exchange Management Act, 1999 could be sustained for non-production of the original Bill of Entry when the import was otherwise evidenced and photocopies were tendered as secondary evidence after an inordinate delay.

Analysis: The proceedings were initiated many years after the remittances, by which time the original records were not traceable. The import itself was not disputed and the photocopy produced by the appellant bore the customs endorsement. The legal position applied was that non-furnishing of the original Bill of Entry, by itself, does not constitute a contravention under the Act, particularly where the alleged lapse is only procedural and the party shows that the original is lost or unavailable without negligence. Secondary evidence is admissible when the original is lost, and the burden remained on the enforcement authority to establish a substantive contravention, namely use of foreign exchange for a purpose other than that declared. No such material was shown.

Conclusion: The penalty was not sustainable, and the appellant was entitled to succeed.

Final Conclusion: The impugned order was set aside and the appeal was allowed, with no costs.

Ratio Decidendi: Non-production of the original Bill of Entry, when the import is otherwise proved and secondary evidence is admissible, does not by itself establish a contravention under FEMA absent proof of misuse of foreign exchange or culpable conduct.

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