2007 (1) TMI 653 - AT - FEMA

Tribunal Upholds Penalty for Unauthorized Payments, Rejects Claims of Misidentification Under FER Act 1973.

Arenja & Co. Versus Directorate of Enforcement

Arenja & Co. Versus Directorate of Enforcement - TMI Issues:Challenge to Adjudication Order imposing penalty for contravention of FER Act, 1973 without RBI permission; Misidentification of appellant; Alleged lack of application of mind by adjudicating authority; Admissibility of statements recorded in English and Urdu; Availability of relied on documents; Burden of proof on appellant.Analysis:The Appellate Tribunal for Foreign Exchange heard an appeal challenging an Adjudication Order imposing a penalty for contravention of the FER Act, 1973. The appellant was penalized for making unauthorized payments to Afghan nationals without RBI permission. The Tribunal granted full dispensation of pre-deposit due to the appeal's old age and proceeded to hear the case on merits. The appellant argued misidentification, lack of application of mind by the adjudicating authority, and the unavailability of relied on documents. The Enforcement Directorate filed written submissions, and the Tribunal took them on record.The Enforcement Directorate contended that the penalty was justified due to a long-standing practice of payments to Afghan nationals in Old Delhi. They argued that the appellant was correctly identified and prosecution was valid. The Tribunal noted that some statements were recorded in Urdu and relied on by the Enforcement Directorate.The appellant's counsel argued misidentification and lack of implication in the statements recorded in English. They contended that the statements were inadmissible as they were not made before police officers. The Tribunal discussed the admissibility of statements made before Enforcement Directorate officials and the burden of proof on the appellant.The Tribunal rejected the appellant's arguments, stating that misidentification was a mere mistake in description and not of substance. They emphasized that the appellant failed to demonstrate errors in the adjudication order or the legality of the penalty. The Tribunal upheld the Adjudication Order, dismissing the appeal and instructing the appellant to deposit the penalty within a week.In conclusion, the Tribunal found no merit in the appeal and maintained the Adjudication Order. The decision was based on the evidence presented and the lack of substantiated arguments by the appellant. The burden of proof was on the appellant, who failed to demonstrate any errors in the order.