FERA adjudication requires effective opportunity and independent findings before penalty or confiscation can stand
An adjudication under FERA based on disputed statements and documentary material should not stand where the authority fails to consider requests for cross-examination, ignores objections to relied-upon documents, and does not independently address defence affidavits or retraction of statements. The proper course in such circumstances is fresh adjudication after giving an effective opportunity to test the evidence and recording independent findings on the contested facts. Where the alleged intermediary itself is part of the charge, that issue also requires specific consideration before any final determination. The matter was therefore remitted for reconsideration in accordance with law.
Issues: Whether the adjudication order imposing penalty and directing confiscation under the Foreign Exchange Regulation Act, 1973 deserved to be set aside and the matter remanded for fresh adjudication in view of the alleged denial of effective opportunity, disputed reliance on statements and documents, and failure to consider material defence contentions.
Analysis: The record showed that the adjudicating authority had proceeded without adequately addressing the appellant's request for cross-examination of mahazar witnesses and without independently examining the objections raised against the documentary evidence, including the telephone diary, STD receipt, chit, and two-rupee note. The reliability of the appellant's statements required a fresh and reasoned examination, particularly because they were retracted and were alleged to have been recorded while the appellant was in custody. The authority was also required to consider the defence affidavits, the request to produce deponents, and the specific contention that the alleged intermediary was a fictitious person, since that fact formed part of the charge. In these circumstances, the matter was found unsuitable for final adjudication on the existing record and required reconsideration after giving proper opportunity and recording independent findings.
Conclusion: The impugned order was set aside and the matter was remanded for fresh adjudication in accordance with law, with refund of the pre-deposit directed but the confiscated amount left under seizure pending the fresh decision.
Final Conclusion: The appeal succeeded to the extent of securing a fresh adjudication on the merits, while the confiscation issue itself was left open for determination by the adjudicating authority after reconsideration.
Ratio Decidendi: Where an adjudication is founded on disputed statements and documentary material without adequate consideration of the defence, independent reasoning, and requested opportunity to test the evidence, the proper course is to set aside the order and remit the matter for fresh adjudication.
TaxTMI 
AI Drafter ✕
TaxTMI 
