TaxTMI 
TaxTMI 
2024 (9) TMI 1033
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..... Ltd. for contravention of the provisions of the FEMA, 2002. 2. As per the facts of the case, on 21.05.2007, the officers of Income Tax Department (AIU), New Delhi searched the baggage of Captain G.A. OJEDOKUN at Departure Terminal of IGI Airport, New Delhi, under Section 132 of Income Tax Act, 1961, which resulted in recovery of US $ 22,34,826 and out of the which amount US $ 22,27,800 was seized under panchnama dated 21.05.2007, as per following details. S. No. Description of Currency Denomination Total 1. US $ 22218 100 US $ 2221800 2. US $ 2600 50 US $ 13000 3. US $ 20 1 US $ 20 4. US $ 5 1 US $ 5 5. US $ 1 1 US $ 1 Total Foreign Currency recovered US $ released Currency Notes of US $ seized US $ 2234826 US $ 7026 US $ 2227800 Captain G.A. OJEDOKUN in his statement dated 21.05.2007 and 06.04.2007 under Section 131 of Income Tax Act, 1961, at the office of DDIT (Inv.), Air Intelligence Unit, Terminal-II, Departure Lounge by the officers of Income Tax Department, stated: - (i) Since February, 2007 he has been working in Nigerian High Commission at N....
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....gerian High Commission in India and in reply thereto under a note No. 148/2007 dated 02.07.2007, the Nigerian High Commission submitted as under: (i) Captain G.A. OJEDOKUN was the head of the Defence Section at Nigerian High Commission and having full authority to make withdrawals of any amount from the Defence Section Account with Bank of Tokyo, New Delhi, without any reference to anybody; (ii) Captain G.A. OJEDOKUN and the warrant officer Sh. Lawrence A Odelade were the two authorized signatories to the Defence Section Account in the said bank; (iii) The Nigerian Government did not ask Captain G.A. OJEDOKUN to make any withdrawal during 26.04.2007 to 25.05.2007; (iv) Captain G.A. OJEDOKUN was not officially permitted by the Nigerian Government to obtain foreign currency US $ 22,27,800 from open market without taking prior approval of RBI; (v) Captain G.A. OJEDOKUN was not asked by the Nigerian Government to carry the foreign exchange to Nigeria in person. After pursuing the matter with the Ministry of External Affairs, New Delhi, statement of Mr. Lawrence Ajayi, S/o Shri Odelade, R/o Nigerian High Commission, Chanakya Puri, New Delh....
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....persons at black market rates. Statements of Shri Sumesh Duggal were recorded under Section 37 of FEMA, 99 on 30.05.07 in which he stated that his mother Smt. Saroj Duggal and his brother Shri Umesh Duggal and he, himself were the Directors of M/s Duggal Forex (P) Ltd., his mother was not coming to shop and she was not involved in day-to-day business affairs of M/s Duggal Forex (P) Ltd. The phone numbers 24698486, 24690128 and 24652387 were installed at his shop and phone number 95120-2774813was installed at his residential premises his mobile number was 98119-64693 the officers of Directorate of Enforcement searched his shop and during the course of search, they recovered and seized some documents and the following foreign currency and Indian currency as it did not tally with the records: - EURO 3690, AUS $ 100, Sing $ 1650 and US $ Cash 6116 and Indian Currency Rs.11,00,000/-. As per records / books, maintained there was excess of EURO 690 and shortfall of AUS $ 1525, Sing $ 1000 and US $ Cash 7629.He has not fulfilled all the conditions of RBI, as he was not maintaining the proper records. It was true that sometimes he purchased and sold foreign exchange on black market....
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....l dealings or transactions. He also directly sold US $ 10000 cash on 16.05.07 to Shri Lawrence and handed over the same at Nigerian High Commission, New Delhi. The mobile number of Shri Lawrence was 98105-97843 and on so many times, Shri Lawrence made calls to him from his mobile number 98105-97843. Several summonses were issued to Shri Sumesh Duggal for recording his statement on the seized documents, ultimately, he appeared on 12.09.2007 and his statement was recorded wherein he stated that the statements tendered by him on 30.05.2007, 31.05.2007 and 05.06.2007 were true and correct. Certain loose sheets have been recovered from the business premises on 30.05.2007 by the officers and his explanation in regard to seized documents as follows: - Page no.1 This page was not in his handwriting; however, it was regarding sale/purchase of foreign exchange. The first transaction was related to the sale of US $ 1000 @Rs.47 per $ to one Sanjay Gupta and second transaction might be in respect of sale / purchase of US $ 6500. Third transaction was regarding sale of US $ 2500 (TC) and forth transaction was regarding US $ 1000 and he did not remember their details. Page No. 4 On this ....
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.... Captain G.A. OJEDOKUN at Airport and came back with Sh. Lawrence Ajayi to Vasant Vihar, New Delhi. He knew Sh. Sumesh Duggal of M/s Duggal Forex (P) Ltd., New Delhi. Shri Sumesh Duggal clearly stated in his statement dated 30.05.2007 that he has not fulfilled all the conditions laid down by the RBI for which he got license of FFMC in the name of M/s Duggal Forex (P) Ltd., in which he was one of the Director and looking after day-to-day business activities of the company. He further stated in his statement dated 30.05.2007 that the foreign currency and Indian currency which were recovered and seized by the officers were not tallying with the books of accounts and even-though he was not maintaining any books including day books. It is thus accomplished that M/s Duggal Forex (P) Ltd., 209, Mohan Singh Market, INA Market, New Delhi, who was issued FFMC license by RBI for dealing in foreign exchange, on the undertaking that they will not involve themselves in any such transactions which contravene the provisions of FEMA or of any rule, regulation, notification, direction or order made there under. However, they did not comply with the directions or comply with the directions of R....
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.... the business premises of Shri Sumesh Duggal, involved in the contravention in aforesaid manner, be confiscated in terms of Section 13(2) of FEMA, 1999 as the said FFMC failed to comply with the conditions laid down by the RBI in terms of Section 10 and 47 of FEMA, 1999. It was also prayed that foreign exchange US $ 300(TC), US $ 20, HK $ 20 and Rs.7,25,000/- seized from the business premises of Shri Rajinder Singh Duggal, involved in the contravention in aforesaid manner, be also confiscated in terms of Section 13(2) of FEMA, 1999 as the said FFMC failed to comply with the conditions laid down by the RBI in terms of Section 10 and 47 of FEMA, 1999 and the said amounts were involved in the contravention. Accordingly, Show Cause Notice No. T-4/02/D/2009 dated 17.07.2009 was issued to all the noticees for contravention made by them as mentioned in the above paras, requiring them to explain adjudication proceedings under Section 13 of FEMA, 1999 should not be held against them for the said contravention. The noticee no. 1 & 2 (herein appellants) filed reply vide letter dated 04.12.2014 wherein they stated that all the records were examined by the officers during the search an....
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....his reply during personal hearing, he again denied all the allegations. Ld. Adjudicating Authority concluded that the retractions of the noticees no. 1 & 2 respectively does not appear to be genuine. Statement dated 30.05.2007 and 31.05.2007 of Shri Sumesh Duggal wherein he has given information about the illegal sale/purchase of foreign currency through various persons residing in Delhi, does not appear to be inconsistent or inhibited and his entire narration reflects a conscious state of mind. Therefore, the said statements are credible. The said statements are also corroborated with the other material on record. No charges were proposed in the complaint against Captain G.A. OJEDOKUM and Sh. Lawrence Ajayi in view of the Ministry of External Affairs orders regarding Diplomatic Missions and Diplomats enjoying immunity from criminal and administrative jurisdiction of the receiving State as per Article 36(1)(a)(b) of the Vienna Convention Diplomatic Relations, 1961, against Captain G.A. OJEDOKUN and Sh. Lawrence Ajayi. On the basis of the above material on record, the Adjudicating Authority confiscated the Indian and foreign currency recovered from the possession of the appellant....
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....690 is duly explained, but respondent ED seized Euro 3690 from the office of the appellant. He further pointed out that applicant had sold US $ 7629, Sing $ 1000, Aus $ 1525 to M/s Transcorp International Ltd. on 30.05.2007 vide bills annexed with his letter marked A-3 to A-5, at page no. 143 to 145. The authenticity of the said three documents is also not challenged by respondent ED by recording the statement of any employee from M/s Transcorp International Ltd. Accordingly, he submitted that there was no shortfall of the foreign currency and hence, official of respondent ED wrongly seized the balance US $ 6116, AUS $ 100, Sing $ 1650 under the pretext that there is shortfall of foreign currency, by ignoring the true facts. Therefore, the question of seizing the same during the search and confiscating the same vide impugned order is arbitrary and mala-fide. He contended that the alleged excess of Euro 690 and shortfall of Aus $ 1525, Sing $ 1000 and US $ 7629 as claimed by the Department cannot be made ground for seizing and confiscating the available foreign currency which was found by the officers duly recorded in the books at the time of search. He argued that the reply to the ....
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....nt, Sumesh Duggal. This fact is also corroborated by Shri Lawrence Ajayi, Military Assistant, Finance, of Nigerian High Commission. He pointed out that mobile no. 9810597843 of Mr. Lawrence revealed that he was in touch with the present appellant and the other foreign exchange dealers. The call detail records of mobile no. 9818964693 and landline nos. 24651387, 24698486 & 24690128 of appellant Sumesh Duggal and M/s Duggal Forex Ltd. revealed that appellant Sumesh Duggal was regularly in touch with Mr. Lawrence on his mobile no. 9810597843 and landline nos. 24122147, 24122144 & 24122138 of Nigerian High Commission at Delhi. This reflects that he was instrumental in exchanging the cash with US $ on a premium rate at the request of officials/officers of Nigerian High Commission. This fact is also admitted by appellant Sumesh Duggal in his statement recorded u/s 37 of FEMA. The documents recovered from the office of Sumesh Duggal reflected many irregularities (as mentioned in para no. 2 above). Shri Mahender Kumar @ Kumar, driver of Nigerian High Commission also proved the unauthorized sale of US $ by appellant Sumesh Duggal and by the other money changers. He further argued that reply....