1992 (6) TMI 187 - AT - FEMA

Penalty of Rs. 1,000 Upheld for Foreign Exchange Regulations Breach; Appeal Dismissed Due to Serious Contravention.

N. Shaik Mohamed Versus Director of Enforcement

The Board upheld the penalty of Rs. 1,000 imposed on the appellant for contravening section 27(1) of the Foreign Exchange Regulation Act, 1973, by ... - Issues:1. Contravention of section 27(1) of the Foreign Exchange Regulation Act, 1973.2. Challenge to the adjudication order based on materialization of business venture and limitation.3. Applicability of limitation for imposing penalties under the Act.4. Materialization of the business venture and the appellant's contradictory statements.5. Excessive penalty imposition.Detailed Analysis:1. The judgment deals with a case where the appellant associated himself with a provision shop without permission from the RBI, leading to a contravention of section 27(1) of the Foreign Exchange Regulation Act, 1973. The Adjudicating Officer found the appellant guilty and imposed a penalty of Rs. 1,000.2. The appellant challenged the adjudication order, arguing that the business venture did not materialize due to government restrictions and that the transaction occurred in 1981, beyond the limitation period. However, the Act does not prescribe a limitation period for penalties under it, and the Code of Criminal Procedure's limitation provisions do not apply to cases under the Foreign Exchange Regulation Act.3. The Adjudicating Officer noted the appellant's contradictory statements regarding his involvement in the provision shop, where he initially confessed to being a partner and investing in the business but later retracted, claiming the venture did not materialize. The officer deemed the retraction as an afterthought to evade liability, as the appellant failed to prove coercion or involuntariness in his initial confession.4. The judgment upholds the penalty imposed on the appellant as not excessive considering the contravention. The Board found no merit in the appellant's appeal and confirmed the adjudication order, dismissing the appeal.In conclusion, the judgment affirms the penalty imposed on the appellant for contravening the Foreign Exchange Regulation Act, rejecting his arguments regarding the materialization of the business venture and the limitation period for penalties. The Board found the appellant's contradictory statements unreliable and upheld the adjudication order, emphasizing the seriousness of compliance with foreign exchange regulations.