Penalty Reduced for FERA 1973 Violation: Appellate Tribunal Cuts Fine from Rs. 10 Lakhs to Rs. 1 Lakh, Ensures Accountability.

The Appellate Tribunal for Foreign Exchange reduced the penalty imposed on the appellant for contravening sections 9(1)(b) and 9(1)(d) of the FERA, 1973, from Rs. 10 lakhs to Rs. 1 lakh. The Tribunal ordered the appellant to deposit the remaining balance within three months, adjusting the confiscated Rs. 27,000 against the penalty. This decision balanced justice by offering relief to the appellant while maintaining accountability for the contravention.

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Issues: Alleged contravention of section 9(1)(b) and 9(1)(d) of the FERA, 1973, imposition of penalty, appeal for reduction of penalty amount.

Analysis:

The judgment by the Appellate Tribunal for Foreign Exchange, New Delhi involved a case where the appellant was accused of contravening section 9(1)(b) and 9(1)(d) of the FERA, 1973, leading to the imposition of a penalty of Rs. 10 lakhs. The Enforcement Directorate received information that the appellant was to receive a payment of Rs. 6 lakhs from an individual named Shri Kanthi Bai, resulting in the seizure of Rs. 27,000 and incriminating documents during a search of the appellant's premises. The appellant disclosed that he was involved in a scheme where he received money from individuals in Riyadh and distributed it in Bangalore, earning a commission for each lakh distributed. The appellant was found guilty of the contravention, and the penalty was imposed based on the evidence gathered during the investigation.

Shri Mahendra Singh, representing the appellant, challenged the findings on the grounds that there was no concrete evidence of the alleged payments. However, the adjudicating officer upheld the charges, stating that the documents seized corroborated the appellant's statement and the individuals involved confirmed the transactions. The officer rejected the claim of duress in obtaining the appellant's statement, leading to the imposition of the penalty and confiscation of the seized amount.

In response to the penalty amount, Shri Mahendra Singh argued that Rs. 10,00,000 was excessively harsh and requested a reduction. The tribunal, considering the circumstances, reduced the penalty to Rs. 1,00,000 and directed the appellant to deposit the balance amount within three months, with the confiscated Rs. 27,000 to be adjusted against the penalty. This adjustment was deemed sufficient to meet the ends of justice, providing some relief to the appellant while upholding the penalty for the contravention of FERA, 1973.

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