2006 (10) TMI 522 - AT - FEMA

Tribunal Upholds Penalty for Foreign Exchange Violation Despite Retracted Confession; Compliance Emphasized.

The tribunal dismissed the appellant's appeal, upholding the penalty for contravening section 9(1)(b) of the FER Act, 1973, by receiving funds without RBI ... - Issues:Violation of provisions of section 9(1)(b) of FER Act, 1973 by receiving funds without RBI permission.Detailed Analysis:Issue 1: Violation of FER Act, 1973The judgment pertains to an appeal against an adjudication order imposing a penalty for contravention of section 9(1)(b) of the FER Act, 1973. The appellant, Smt. A.P. Rajani, received Rs. 70,000 from a person in India on instructions from her husband, a resident of Muscat, without RBI permission. Despite multiple notices and opportunities, the appellant did not contest the appeal, leading to it being heard ex parte. The Enforcement Directorate found incriminating evidence during a search, including a letter from the husband instructing the appellant to receive the funds. The appellant admitted to receiving the money and purchasing land with it. The appellant contested the order, claiming the confession was retracted and lacked evidence linking the funds to the charge. However, the tribunal found the confession corroborated by the husband's letter and other evidence, upholding the penalty and dismissing the appeal. The appellant was directed to pay Rs. 15,000 within 15 days.Conclusion:The judgment highlights the importance of adhering to foreign exchange regulations and the consequences of violating such provisions. The tribunal emphasized the significance of corroborating evidence to support confessional statements and upheld the penalty imposed for the contravention. The decision serves as a reminder of the legal obligations regarding cross-border financial transactions and the repercussions of non-compliance with regulatory requirements.