TaxTMI 
TaxTMI 
2025 (11) TMI 379
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....ri D K Jain, the representative of the Appellant, completely waived off the pre-deposit of the penalty amounts. 2. Ld. Counsel for the Appellant stated that the Show Cause Notice (SCN) dated 06.02.2015 alleged contraventions of Sections 3(b) and 3 (d) of FEMA, to the extent of Rs. 3,20,09,401/- for each of the contravention. Ld. Counsel contended that the Impugned Order is bad in law since it is not a speaking Order. Ld. Counsel further contended that the Adjudicating Authority (AA) considered the corrigendum dated 14.01.2016 issued by the Complainant for correction of typographical errors, and hence should have issued corrigendum to the SCN as well. Ld. Counsel stated that the AA has relied upon the statements made before the DRI Authorities citing the provisions of Section 39 of FEMA. Ld. Counsel argued that the AA could not have relied upon such documents as these did not show any proof regarding payments made in contravention of FEMA. Further the case made under the Customs Act was under Appeal, when the matter under FEMA was adjudicated. Ld. Counsel also stated that the seizure of the consignment exported by Shipping Bill No. 01073 dated 23.01.2003 of value Rs. 88,46,209/- ....
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....providing it to M/s Seven Star Trading Co., Ajman, so as to enable it to make the payments for the fraudulent export shipments, thereby the Appellant contravened Sections 3(b) and 3(d) of FEMA. Ld. Counsel for the Respondent pleaded that the Appeal may be dismissed. 5. We have considered the rival submissions and the material on record. We find that the Impugned Order is well reasoned and speaking. While it is true that the information about the contraventions under the Customs Act 1962 was conveyed by the DRI to the Respondent Directorate, it does not necessarily imply that the alleged transactions could not have been in contraventions of the provisions of FEMA. We take note of paragraph 29 of the Impugned Order, which is as follows: "29. In the present case several important circumstances and physical evidences such as, the imported duty free Silk Yarn diverted to the domestic market, Receiving of Cash towards the sale of such Silk Yarn, admission that no accounts were kept for such sales, and confession/admission about shipment of four consignments of bricks and Silk Waste in place of the declared product "Powder Grade Silk Yarn" to M/s. Seven Star General Trading Co....
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....ndependent and cogent evidence, which would lend adequate assurance to the court that it may seek to rely thereupon. We are not oblivious of some decisions of this Court wherein reliance has been placed for supporting such contention but we must also notice that in some of the cases retracted confession has been used as a piece of corroborative evidence and not as the evidence on the basis whereof alone a judgment of conviction and sentence has been recorded." 7. In K.T.M.S Mohamed Vs. Union of India [(1992) 3 SCC 178] the Hon'ble Supreme Court held that merely because statement is retracted, it cannot be regarded as involuntary or unlawfully obtained. In this regard, following observations were made in paragraph 34: "34. ... But suffice it to say that the core of all the decisions of this Court is to the effect that the voluntary nature of any statement made either before the Custom Authorities or the officers of the Enforcement under the relevant provisions of the respective Acts is a sine qua non to act on it for any purpose and if the statement appears to have been obtained by any inducement, threat, coercion or by any improper means then statement must be rejected ....
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....dicial proceeding within the meaning of Section 193 and 228 of the Penal Code, 1860. The solemnity and sanctity attached to the statement made in a judicial proceeding therefore attaches to the statement made under the Customs Act to the DRI. Therefore there is no prohibition in relying upon statements made under the Customs Act 1962 for the purposes of the adjudication proceeding under the FEMA, more so when reliance is placed upon documents to the complaint made to the Adjudicating Authority. 22. Section 3(b) provides that no person shall make any payment to or for the credit of any person resident outside India in any manner. In the present case, there is a complete absence of any legitimate consideration, such as the supply of goods against which an inward remittance as high as Rs. 75.39 crores was received. Hence, the only possible inference that would arise is that the inward remittance of Rs. 75.39 crores was matched by a hawala transaction involving transactions through a person resident outside India. Similarly, under Section 3(d), no person shall enter into any financial transaction in India as consideration for or in association with the acquisition or creation ....