2009 (1) TMI 952 - AT - FEMA

Tribunal Confirms Penalties for Unauthorized Forex Transactions; Dismisses Jurisdiction and Justice Violation Claims.

The tribunal upheld the penalties imposed on the appellants for contraventions of the FER Act. The appellants' arguments regarding lack of jurisdiction, ... - Issues Involved:1. Contravention of Section 9(1)(f)(1), 9(1)(d), and 14 of the FER Act.2. Contravention of Section 8(1) and 64(2) of the FER Act.3. Authority and jurisdiction of the adjudicating officer post-repeal of the Foreign Exchange Regulation Act, 1973.4. Violation of principles of natural justice.5. Corroboration and admissibility of retracted admissional statements.6. Proof beyond reasonable doubt.Detailed Analysis:1. Contravention of Section 9(1)(f)(1), 9(1)(d), and 14 of the FER Act:The first appellant was penalized Rs. 25 lakhs for receiving Rs. 45 lakhs from the second appellant in consideration of receiving foreign currency of US Dollar 908598 and Pound 13000 from one Vijay Harish Bhai at Dubai. Similarly, the second appellant was penalized Rs. 25 lakhs for making the payment to the first appellant. The fourth appellant was penalized Rs. 70000 for aiding the second appellant in receiving foreign exchange of US Dollar 16723 in lieu of payment of Rs. 7 lakhs. The sixth appellant was penalized Rs. 15000 for aiding the second appellant in receiving US Dollar 3250 in lieu of payment of Rs. 1,50,000/-.2. Contravention of Section 8(1) and 64(2) of the FER Act:The third appellant was penalized Rs. 25000 for aiding the second appellant in unauthorizedly acquiring US Dollar 69973 and borrowing US Dollar 28000. The fifth appellant was penalized Rs. 25000 for aiding the second appellant in borrowing foreign currency of US Dollar 28000.8.3. Authority and jurisdiction of the adjudicating officer post-repeal of the Foreign Exchange Regulation Act, 1973:The appellants contended that the impugned order was passed after the repeal of the Foreign Exchange Regulation Act, 1973, w.e.f. 31.5.2000, and thus, the adjudicating officer had no authority or jurisdiction to pass the adjudication order. However, this argument was not upheld as the proceedings were initiated before the repeal, and the adjudicating authority continued to have jurisdiction to complete the adjudication.4. Violation of principles of natural justice:The appellants argued that the cross-examination of the co-appellants was not allowed despite repeated demands, leading to a violation of the principles of natural justice. The tribunal found that the appellants had an opportunity to present their case and that the procedural requirements were met.5. Corroboration and admissibility of retracted admissional statements:The tribunal discussed the retraction of admissional statements. It was emphasized that retraction alone does not invalidate the statements unless it is clearly shown that the statements were made under threat and coercion. The tribunal referred to several Supreme Court judgments, including K.T.M.S. Mohd. v. UOI, K.I. Pavunny v. Assistant Collector (HQ), Central Excise Collectorate, Cochin, and others, to establish that retracted confessions can be relied upon if found to be voluntary and true. The tribunal concluded that the admissional statements of the appellants were voluntary and true.6. Proof beyond reasonable doubt:The appellants argued that the proof beyond reasonable doubt was not reached. The tribunal referred to the Supreme Court's judgment in Collector of Customs, Madras & Ors. v. D. Bhoormull, which stated that the burden of proving the case with mathematical precision is not required. The tribunal held that the evidence presented was sufficient to establish the contraventions beyond reasonable doubt.Conclusion:The tribunal upheld the penalties imposed on the appellants for various contraventions of the FER Act. The arguments regarding the lack of jurisdiction, violation of natural justice, and the inadmissibility of retracted statements were not accepted. The tribunal found that the evidence presented was sufficient to establish the contraventions beyond reasonable doubt.