Foreign exchange penalty set aside where bank evidence explained remittance discrepancy by inclusion of interest.

Penalty for alleged contravention of sections 8(3) and 8(4) read with section 68 of the Foreign Exchange Regulation Act, 1973 was held unsustainable because the remittance discrepancy was satisfactorily explained. The appellant showed that the apparent difference arose from interest being added to the original import payment, and a bank letter corroborated that the total amount paid, including interest, matched the figure in the adjudication order. As the only basis for the contravention finding was not supported by the evidence on record, the penalty could not be sustained and was set aside.

---

---

Issues: Whether the penalty imposed for alleged contravention of section 8(3) and section 8(4) read with section 68 of the Foreign Exchange Regulation Act, 1973 was sustainable on the evidence on record.

Analysis: The discrepancy in the remittance figure was explained by the appellant on the basis that interest had been added to the original amount. A letter from the bank supported that explanation and showed that the total amount paid for imports, after adding interest to the original sum, matched the figure mentioned in the adjudication order. In these circumstances, the sole basis on which the penalty was imposed was not sufficient to sustain the finding of contravention.

Conclusion: The penalty order was unsustainable and was set aside.

---