1996 (3) TMI 578 - AT - FEMA

Penalty Reduced in FERA Violation for NRE Account Transaction; Refund Ordered for Excess Pre-Deposit.

Smt. Shanti Devi Jain Versus Director of Enforcement

The Chairman upheld the finding of contravention under section 9(1)(a) of FERA, 1973, against the appellant, who was alleged to have received Rs. 2 lakhs ... - Issues:1. Imposition of penalty under section 9(1)(a) of FERA, 1973 for contravention.2. Allegation of receiving Rs. 2 lakhs from NRE account.3. Denial of contravention by the appellant.4. Consideration of evidence and circumstances by the Adjudicating Officer.5. Submission regarding lack of direct evidence in FERA violations.6. Determination of penalty amount based on circumstances and contravention.Analysis:1. The judgment revolves around the imposition of a penalty under section 9(1)(a) of FERA, 1973 on the appellant for contravention. The appellant was alleged to have received Rs. 2 lakhs from an NRE account, leading to the penalty.2. The appellant denied the contravention, claiming the amount was a gift from a friend of her late husband. However, the Adjudicating Officer rejected this claim, citing lack of evidence regarding the alleged relationship between the parties and the nature of the transaction.3. The appellant contended that the documents in the show-cause notice did not implicate her in the contravention. She also challenged the order for not explicitly imposing a penalty while directing the deposit of Rs. 60,000. However, the Adjudicating Officer inferred the penalty imposition based on the circumstances.4. Dr. Shamsuddin, representing the respondent, argued that the denial of payment by the appellant should be viewed in light of related facts. He pointed out other similar payments made by the alleged donor to different individuals, suggesting a pattern inconsistent with a genuine gift.5. The judgment addresses the issue of the scarcity of direct evidence in FERA violations. It emphasizes the need to consider circumstantial evidence and scrutinize charges based on the available facts and circumstances, rather than strict criminal trial standards.6. Ultimately, the Chairman upheld the finding of contravention but reduced the penalty to Rs. 10,000 considering the appellant's circumstances and the beneficial impact of the transaction on foreign exchange reserves. The appellant was directed to receive a refund of the excess amount deposited as pre-deposit within 45 days.