2007 (12) TMI 557 - AT - FEMA

Appeal Dismissed: Tribunal Upholds Penalty for Unauthorized Foreign Currency Dealings; Order for Payment Issued.

The Tribunal dismissed the appeal, affirming the penalty imposed on the appellant for unauthorized acquisition and deposits of foreign currency. It found ... - Issues Involved:1. Unauthorized acquisition of foreign currency.2. Unauthorized deposits in NRE accounts.3. Voluntariness and truthfulness of admissional statements.4. Procedural defects in the investigation.5. Quantum of proof and penalty.Issue-wise Detailed Analysis:1. Unauthorized acquisition of foreign currency:The appellant was penalized for contravening sections 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973, for unauthorizedly acquiring foreign currency of US dollar 400 and DM 200 (travellers cheques) recovered from his residence. The appellant argued that the foreign currency was given by a friend for purchasing a camera from a duty-free shop. However, the Tribunal found no substantial evidence to support this claim.2. Unauthorized deposits in NRE accounts:The appellant was accused of unauthorizedly acquiring foreign currency by purchasing it at different rates than prescribed by the RBI and depositing it intermittently in his 16 NRE accounts from 1992 to 1994. The appellant contended that the foreign currency was legally brought into India and deposited, supported by a Currency Declaration Form. However, the Tribunal noted the substantial amounts deposited in various banks and found the appellant's explanations insufficient and unconvincing.3. Voluntariness and truthfulness of admissional statements:The appellant retracted his admissional statements, claiming they were made under threat and coercion. The Tribunal emphasized that mere bald allegations without supporting evidence are insufficient to discard the statements. The Tribunal cited various judgments, including K.T.M.S. Mohd. v. Union of India and K.I. Pavunny v. Asstt. Collector (HQ), Central Excise Collectorate, to affirm that the admissional statements were voluntary and true. The Tribunal concluded that the statements fulfilled the twin tests of voluntariness and truthfulness, making them admissible and acceptable for establishing guilt.4. Procedural defects in the investigation:The appellant argued that the investigation was defective as the same Enforcement Officer who conducted the search also recorded the admissional statements, which is against established legal principles. The Tribunal, however, did not find this argument compelling enough to invalidate the investigation or the admissional statements.5. Quantum of proof and penalty:The Tribunal discussed the quantum of proof required in quasi-criminal proceedings, referencing the judgment in Collector of Customs v. D. Bhoormull, which states that the prosecution is not required to prove its case with mathematical precision. The Tribunal found ample proof to hold the appellant guilty beyond a reasonable doubt. The penalty of Rs. 1 crore was deemed commensurate with the amount involved in the violation and not harsh or excessive. The appeal was dismissed, and the impugned order was affirmed.Conclusion:The Tribunal upheld the penalty imposed on the appellant for unauthorized acquisition and deposits of foreign currency, finding the admissional statements voluntary and true, and dismissed the appeal. The appellant was ordered to deposit the penalty within seven days from the receipt of the order, failing which the Directorate of Enforcement could recover the amount in accordance with the law.