Verification of defence documents required before penalty for foreign exchange contravention; ex parte order set aside and matter remanded.

Material defence documents were produced to show that foreign exchange had been used for imports and that the failure to furnish papers to the authorised money changer was inadvertent. Because those materials had not been examined in the adjudication and the penalty order had been passed ex parte, the Appellate Tribunal for Foreign Exchange held that the documents required verification before any final finding on contravention under sections 8(3) and 8(4) of FERA. The penalty order was set aside and the matter was remanded for fresh adjudication after notice and hearing, so the Appellant could place evidence and contest the allegations on merits.

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Issues: Whether the impugned adjudication order imposing penalty for alleged contravention of section 8(3) and section 8(4) of the Foreign Exchange Regulation Act, 1973 should be set aside and the matter remanded for fresh adjudication.

Analysis: The Appellant produced material documents asserting that foreign exchange had been utilised for import and that the omission to furnish documents to the authorised money changer was inadvertent. The Respondent sought verification of the documents and noted absence of the banker's confirmation letter. As the supporting materials had not been examined in the adjudication proceedings and the order had been passed ex parte, the proper course was to permit verification and a fresh hearing before the Adjudicating Officer.

Conclusion: The impugned order was set aside and the matter was remanded to the Adjudicating Officer for fresh adjudication after notice to the Appellant.

Final Conclusion: The penalty order did not stand and the controversy was reopened for a fresh decision on merits after opportunity to the Appellant to place evidence.

Ratio Decidendi: Where material defence documents require verification and the adjudication has proceeded without effective opportunity to contest the allegations, the order may be set aside and remitted for fresh adjudication after notice and hearing.

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