2003 (2) TMI 562 - AT - FEMA

Appeal Dismissed: Penalty for Violating FERA Section 8(1) Upheld but Reduced from Rs. 50,000 to Rs. 25,000 After Pre-Deposit.

Dayal Fatumal Jiandani Versus Director of Enforcement

Dayal Fatumal Jiandani Versus Director of Enforcement - TMI Issues:Challenge to legality of penalty imposed for violation of FERA section 8(1) based on possession of foreign exchange at airport, appellant's residency status, retracted statement, and appeal against currency confiscation.Analysis:The appeal challenges a penalty imposed for violating FERA section 8(1) due to the appellant being intercepted at the airport with foreign exchange. The appellant claimed non-residency in India under FERA section 2(p) citing a case precedent. The appellant's statement to Customs authorities about purchasing foreign currencies through brokers for business abroad was retracted. The appellant argued against contravention of FERA section 8(1) due to admitted currency recovery pending appeal with CEGAT.The Addl. Director rejected the appellant's defense, stating that FERA section 8(1) applies to any person in India, including non-resident Indians (NRIs) while in India. The defense's argument of legal currency accumulation during visits was dismissed for not complying with FERA section 8(3) requiring encashment or surrender within specific time limits. The Addl. Director found no evidence supporting legal acquisition of foreign exchange in India and rejected the defense's contentions.The Chairperson agreed with the Addl. Director's view, noting the absence of CEGAT's order setting aside the currency confiscation. The penalty was reduced to Rs. 25,000 from Rs. 50,000 based on a pre-deposit of Rs. 25,000 by the appellant. The appeal was dismissed with the modified penalty amount.