1992 (7) TMI 358 - AT - FEMA

Tribunal Confirms Violation of Foreign Exchange Regulation Act; Reduces Penalty for Unauthorized Gold, Forex Possession.

Aftab Alam Versus Director of Enforcement

The Tribunal upheld the finding of contravention of Section 8(1) of the Foreign Exchange Regulation Act, 1973, against the appellant, who was found guilty ... - Issues:Violation of provisions of section 8(1) of the Foreign Exchange Regulation Act, 1973.Detailed Analysis:Issue 1: Violation of Section 8(1) of the ActThe appellant was penalized for contravening section 8(1) of the Foreign Exchange Regulation Act, 1973. The appellant was found carrying gold and foreign exchange without proper authorization. The appellant claimed innocence, stating that the recovered gold did not belong to him and that his confessional statement was obtained under duress. The appellant argued that the case against him was fabricated. However, the Adjudicating Officer found the appellant guilty based on the evidence presented.Issue 2: Voluntariness of Confessional StatementThe appellant retracted his confessional statement, alleging coercion. The appellant's counsel argued that a retracted statement should not be relied upon unless corroborated. The respondent contended that the appellant's statements, when read together, indicated voluntariness. The Tribunal noted that a retracted statement can still be valid if proven voluntary and true, as established in previous legal precedents.Issue 3: Circumstantial Evidence and CorroborationThe Tribunal considered circumstantial evidence, such as the location of the seized gold, the appellant's travel details, and the recovery of gold from his person and seat. The Tribunal found the appellant's denial regarding the ownership of the gold beneath his seat unconvincing. The Tribunal emphasized that the burden of proof lay with the appellant, and mere conjectures could not undermine the evidence against him.Issue 4: Quantum of PenaltyThe Tribunal assessed the quantum of penalty imposed on the appellant. While acknowledging that the foreign exchange equivalent to Rs. 53,000 was recovered in the form of seized gold, it noted a direct loss of foreign exchange due to the appellant's spending in Dubai. The Tribunal deemed the original penalty of Rs. 44,000 excessive and reduced it to Rs. 8,500, considering the circumstances of the case.In conclusion, the Tribunal upheld the finding of contravention of section 8(1) of the Act against the appellant but reduced the penalty to Rs. 8,500. The appeal was dismissed, subject to the modified penalty amount.