2007 (11) TMI 713 - AT - FEMA

Tribunal Confirms Penalties, Seized Currency Confiscation for FER Act Breach; Appeals Dismissed for Lack of Merit.

Prem Singh Versus Special Director, Enforcement Directorate

Prem Singh Versus Special Director, Enforcement Directorate - TMI Issues:Adjudication order imposing penalties for contravention of FER Act provisions without RBI permission, reliance on seized documents and statements, admissibility of confessional statements, violation of natural justice principles, admissibility of seized documents, cross-examination rights, confiscation of seized currency, quantum of penalty.Analysis:The appeals challenged an adjudication order imposing penalties and confiscation of seized currency for contravening FER Act provisions without RBI permission. The appellants were accused of purchasing and selling foreign exchange illegally. The order was based on seized documents and statements, including confessional statements. The appellants contended that the confessional statements were retracted and obtained under duress, lacking corroborative evidence. They argued against the admissibility of the statements and the confiscation of seized currency as part of illegal dealings. The respondent, however, argued that the statements were voluntary and provided sufficient grounds for conviction.The Tribunal considered the admissibility of retracted confessional statements, citing legal precedents. It was noted that retracted statements could be used as evidence if corroborated, emphasizing the voluntary and truthful nature of the statements. The Tribunal found the statements admissible and reliable in this case, rejecting the appellants' arguments against their use.Regarding the principle of natural justice, the Tribunal addressed the appellants' claim of violation due to the lack of English versions of seized documents and cross-examination rights. It was held that the failure to provide English versions was not a violation, especially when the author of the documents was known. The Tribunal also clarified that cross-examination rights in quasi-judicial proceedings are not absolute, citing relevant legal principles.The Tribunal further discussed the admissibility of seized documents, distinguishing FERA proceedings from criminal trials under the Indian Evidence Act. Loose sheets seized were considered admissible in FERA proceedings, even if not classified as account books under the Evidence Act. The Tribunal dismissed the argument that the documents were inadmissible.Addressing the confiscation of seized currency, the Tribunal found the appellants' explanations inadequate. Prem Singh admitted the seized amount was from foreign exchange sales, while Rajender Singh failed to prove ownership or legitimate sources. The Tribunal upheld the confiscation based on lack of evidence supporting the appellants' claims.In conclusion, the Tribunal upheld the adjudication order, dismissing the appeals for lack of merit. The penalties imposed were deemed appropriate given the amounts involved. The appellants were directed to pay the remaining penalty amounts within a specified timeframe, allowing the respondent to realize the outstanding sums if not paid promptly.