2006 (10) TMI 521 - AT - FEMA

Appeal Dismissed: Tribunal Confirms Penalty for Foreign Exchange Regulation Act Violation; Coercion Claims Rejected.

Dr. S.M.A. Razvi Versus Director, Enforcement Directorate

Dr. S.M.A. Razvi Versus Director, Enforcement Directorate - TMI Issues:- Appeal against adjudication order imposing penalty for contravention of FER Act provisions.- Allegations of making payments to persons outside India and borrowing money from a foreign resident.- Challenge to impugned order based on coercion in obtaining confessional statement.- Dispute regarding payments made to foreign nationals.- Lack of opportunity for cross-examination.- Defense arguments against penalty imposition.- Examination of evidence and legal considerations.- Confirmation of charges and dismissal of appeal.Analysis:The appeal before the Appellate Tribunal concerns an adjudication order imposing a penalty against the appellant for contravening provisions of the Foreign Exchange Regulation Act, 1973. The appellant, Dr. S.M.A. Razvi, was penalized for making payments to individuals outside India and borrowing money from a foreign resident. The appeal was initiated in response to an order passed in 1985 by the Additional Director, Mumbai, imposing a penalty of Rs. 45,000 on the appellant. Despite the appellant's absence and lack of representation, the Tribunal proceeded with the matter for final disposal on its merits.The allegations against the appellant include making payments to foreign nationals and borrowing money from a Saudi Arabian resident. The appellant contested the impugned order, claiming that his confessional statement was obtained under coercion and that he did not agree to the payments mentioned in the order. He argued that certain payments were made by his agents and not at his instance. Additionally, discrepancies were raised regarding the nationality of the recipients of the payments and the lack of opportunity for cross-examination during the proceedings.The Defense Legal Advisor argued in favor of confirming the penalty, stating that sufficient evidence supported the imposition of the penalty. The Tribunal carefully considered the submissions and evidence on record. It was noted that the appellant's agents confirmed making payments on his behalf and that the appellant had admitted to certain transactions during his statement. The appellant's defense of coercion in obtaining the confessional statement was rejected due to lack of supporting evidence.The Tribunal found that the charges against the appellant were proven based on corroborated evidence and circumstances. Referring to legal precedent, the Tribunal emphasized the admissibility of retracted confessions if corroborated by other evidence. In this case, the Tribunal concluded that the impugned order was valid and upheld the findings of the Adjudicating Officer.Ultimately, the Tribunal dismissed the appeal on its merits and directed the appellant to deposit the penalty amount within a specified timeframe. Failure to comply would result in the respondent recovering the amount in accordance with the law. The decision was based on a thorough examination of the evidence, legal principles, and the appellant's arguments, leading to the confirmation of the penalty imposed.