1988 (5) TMI 379 - AT - FEMA

Tribunal Upholds Violations but Modifies Confiscation, Orders Car Release with Rs. 25,000 Penalty for Fairness.

C.P. Devasay Versus Director of Enforcement

The Tribunal partially allowed the appeal, confirming the Adjudicating Officer's findings of contraventions under sections 8(1) and 9(1)(d) of the Foreign ... - Issues:- Alleged contravention of section 8(1) of the Foreign Exchange Regulation Act, 1973- Alleged contravention of section 9(1)(d) of the Act regarding receipt of funds from a non-resident son- Alleged contravention of section 9(1)(d) regarding payment to a resident on behalf of a non-residentAnalysis:1. The Appellant, a retired Lecturer, had his premises searched under the Foreign Exchange Regulation Act, resulting in the seizure of US dollars and incriminating documents. He admitted receiving funds from his son and making payments to others. Show-cause notices were issued for contraventions of sections 8(1) and 9(1)(d) of the Act.2. The Appellant admitted to the statements given but pleaded innocence due to lack of awareness of the law. Penalties and confiscations were imposed by the Adjudicating Officer, leading to the current appeal against the order.3. The Appellant argued that any contravention was unintentional due to ignorance. He explained the circumstances of receiving funds from his son for purchasing a car, emphasizing his urgent need post a heart attack. The department supported the penalties imposed.4. The Tribunal considered the contentions of both parties. The Appellant's arguments regarding technical nature of contraventions were not accepted for charges under show-cause notices 1 and 3, as they were proven based on his statements and supporting evidence.5. The Appellant appealed for the release of the confiscated car, stating it was essential for health reasons and purchased urgently after his health incident. The Tribunal acknowledged the receipt of funds from his son as a contravention but considered the intention behind the transaction for penalty determination.6. The Tribunal discussed the possibility of confiscation under section 63 of the Act, emphasizing that confiscation should be justified and not automatic. The Appellant offered to pay a penalty in lieu of confiscation for the car.7. The Tribunal found the contravention of section 9(1)(b) proved due to the receipt of funds from the non-resident son. The intention behind the transaction was considered for penalty determination, leading to a decision on the confiscation of the car.8. Confiscation under section 63 was discussed further, emphasizing the need for justifiable grounds for confiscation. The Tribunal agreed that penalties should be proportionate to the contravention amount, leading to a decision on the penalty for the contravention under show-cause notice 2.9. The Tribunal concluded that confiscation of the car was not justified, and the penalty for the contravention under show-cause notice 2 was fixed at Rs. 25,000. The car was to be released on payment of this penalty, modifying the Adjudicating Officer's order accordingly.10. The appeal was partly allowed, confirming the findings of the Adjudicating Officer but specifying the release of the car upon payment of the penalty.