1992 (7) TMI 357 - AT - FEMA

Tribunal Upholds Penalties for Foreign Exchange Violations, Considers Leniency, Reduces Penalty for One Dismissed Charge.

S. Raman Versus Director of Enforcement

The Tribunal found the appellant guilty of contravening section 8(1) of the Foreign Exchange Regulation Act by acquiring foreign exchange without ... - Issues:1. Contravention of provisions of section 8(1) and section 8(2) of the Foreign Exchange Regulation Act.2. Whether the appellant acquired foreign exchange in contravention of the Act.3. Whether the appellant contravened section 8(2) of the Act.4. Opportunity for cross-examination of witnesses during adjudication proceedings.5. Imposition of penalties and leniency considerations.Analysis:1. The appellant was charged with contravention of section 8(1) and section 8(2) of the Foreign Exchange Regulation Act. The charges included acquiring foreign exchange without surrendering it within the stipulated time and purchasing foreign exchange without RBI permission. The appellant contested the charges, claiming the confessional statement was obtained under threat and retracted the same day. The appellant also argued against the lack of opportunity for cross-examination and the clubbing of two charges in one notice.2. In the case of SCN-I, the appellant received US $3,768 as a gift from his brother in Saudi Arabia, which he failed to surrender within the prescribed time. The appellant contended that receiving the gift did not amount to contravention of section 8(1). However, the Tribunal found that the receipt of foreign exchange as a gift falls under 'otherwise acquiring' foreign exchange as per the Act. The appellant failed to surrender the amount within the specified time, leading to the imposition of a penalty.3. Regarding SCN-II, the appellant admitted to purchasing US $4,000 without RBI permission and at unauthorized rates. The confessional statements and evidence supported the charge of contravening section 8(1) but lacked clarity on contravening section 8(2) due to the absence of information on authorized conversion rates. The Tribunal upheld the contravention of section 8(1) but set aside the charge under section 8(2).4. The appellant raised concerns about the lack of opportunity for cross-examination during the adjudication proceedings. However, the Tribunal found no substance in this claim as the appellant was given a chance for a personal hearing, and no request for cross-examination was made during the hearing.5. The Tribunal considered the penalties imposed and the appellant's plea for leniency due to economic and physical hardships. While affirming the penalties for contraventions under section 8(1), the Tribunal reduced the total penalty amount due to the charge under section 8(2 not being established. The Tribunal concluded that the penalties were proportionate and the Adjudicating Officer had already taken a lenient view, thus dismissing further leniency requests.