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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: (i) Whether the appellant had contravened section 8(1) of the Foreign Exchange Regulation Act, 1973 in respect of the seized foreign currency and failed to discharge the statutory burden under section 71(3) of the Act. (ii) Whether the proceedings were vitiated on the ground that the foreign currency had already been seized by the Customs authorities and that the penalty amounted to double jeopardy.
Issue (i): Whether the appellant had contravened section 8(1) of the Foreign Exchange Regulation Act, 1973 in respect of the seized foreign currency and failed to discharge the statutory burden under section 71(3) of the Act.
Analysis: The foreign currency of Fr.Fr. 14,000 was admittedly seized while the appellant was attempting to take it out of the country. Under section 71(3) of the Act, once possession of foreign currency beyond the prescribed limit is shown, the burden shifts to the person concerned to prove that it came into his possession lawfully. The appellant did not produce material to explain lawful possession or discharge that burden. The retraction of the earlier statement did not assist him in the absence of supporting evidence.
Conclusion: The contravention was made out and the penalty was sustainable against the appellant.
Issue (ii): Whether the proceedings were vitiated on the ground that the foreign currency had already been seized by the Customs authorities and that the penalty amounted to double jeopardy.
Analysis: The seizure by Customs did not prevent adjudication under the foreign exchange law. The penalty imposed under the Act was in addition to the confiscation of the currency and did not amount to a second punishment for the same cause in the manner contended. The objection was therefore rejected.
Conclusion: The challenge based on customs seizure and double jeopardy failed.
Final Conclusion: The appeal failed on merits and the penalty order was left undisturbed.
Ratio Decidendi: Where possession of foreign currency is established, the statutory burden under section 71(3) of the Foreign Exchange Regulation Act, 1973 lies on the person concerned to prove lawful possession, and adjudication under the Act is not barred merely because the currency was also seized by Customs.
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