Prima facie evidence and round-tripping allegations justified interim relief by staying the pre-deposit in foreign exchange proceedings.

At the stay stage in foreign exchange contravention proceedings, the tribunal found that the adjudicating authority had not relied on prima facie documentary or other conclusive evidence to establish unauthorised transfer of foreign exchange or round tripping. Issues such as common directors, the actual source of funds, and the alleged offshore investment structure were treated as matters for final hearing. On that basis, the appellants were held to have a strong case on merits for interim relief, and the pre-deposit was stayed in their favour.

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Issues: Whether the appellants made out a prima facie case for staying the pre-deposit in proceedings alleging contravention of foreign exchange law.

Analysis: The allegations were that foreign exchange was transferred without prior RBI permission and that the funds invested through an offshore company reflected round tripping. The order records that, at the stay stage, there was no prima facie documentary or other evidence relied upon by the adjudicating authority to conclusively establish the charges. Questions regarding round tripping, common directors, and the actual source of funds were treated as matters for final hearing. On that footing, the appellants were found to have a strong case on merits for interim relief.

Conclusion: The pre-deposit was stayed in favour of the appellants.

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