1996 (9) TMI 666 - AT - FEMA

Tribunal Overturns Adjudication Order Due to Procedural Errors; Orders Fresh Review & Annuls Currency Confiscation.

The appellate tribunal set aside the impugned adjudication order due to procedural irregularities, including non-supply of essential documents, which ... - Issues:- Appeal against adjudication order imposing penalty for contravention of Foreign Exchange Regulation Act- Non-supply of relevant documents leading to vitiated adjudication proceedings- Legal validity of personal hearing notice without supplying relied upon documents- Request for deferment of proceedings until receipt of documents and denial of allegations- Confiscation of seized Indian currency without jurisdiction- Request for remand for fresh adjudicationAnalysis:The judgment involves an appeal against an adjudication order imposing a penalty for contravention of the Foreign Exchange Regulation Act, 1973. The appellant was penalized for violating sections 9(1)(b) and 9(1)(d) of the Act, with a cumulative penalty of Rs. 1 lakh and confiscation of seized Indian currency amounting to Rs. 14,440. The appellant challenged the order on various grounds, primarily focusing on the non-supply of relevant documents, which he argued vitiated the adjudication proceedings.The appellant's counsel contended that the adjudication proceedings were flawed due to the failure to provide the necessary documents despite repeated requests. The appellant demanded copies of documents referred to in the show-cause notice but was not supplied with them, leading to a lack of opportunity to respond adequately. The appellant's right to file a reply after receiving the documents was reserved, highlighting a violation of procedural fairness and natural justice principles.Furthermore, the appellant's counsel argued that the personal hearing notice was legally defective as it was issued without supplying the relied-upon documents. The appellant reiterated the necessity of having access to all relevant documents to prepare a comprehensive response to the allegations. The failure to provide complete documentation undermined the appellant's ability to present a proper defense, rendering the adjudication process unfair and prejudicial.The appellant also raised objections to the confiscation of the seized Indian currency, arguing that the order lacked jurisdiction. The currency confiscation was based on a personal search under section 34, which did not result in the recovery or seizure of the specified amount. The appellant contended that the confiscation was unjustified and should be set aside due to jurisdictional issues and procedural irregularities.In light of the arguments presented, the appellate tribunal agreed that the adjudication order was flawed and required fresh adjudication. The tribunal emphasized the importance of providing the appellant with the necessary documents and information to enable a fair and effective response. The order of confiscation of the Indian currency was deemed to be without jurisdiction and set aside, ensuring that the adjudicating authority could not make any further decisions regarding the seized amount in the ongoing proceedings.Ultimately, the tribunal waived the pre-deposit requirement and set aside the impugned order. The respondents were directed to supply the appellant with the requested documents, allowing for a reasonable period to submit a reply. If deemed necessary, a fresh personal hearing could be conducted after considering the appellant's response to the show-cause notice. The judgment sought to uphold principles of procedural fairness and ensure a just and thorough adjudication process for the appellant.