TaxTMI 
TaxTMI 
2025 (12) TMI 228
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.... Hawala transfer of funds abroad by the Appellant is based upon the surmise and conjecture of the Respondent Directorate that the Appellant indulged in under valuation of imports. Ld. Counsel stated that no proceeding was initiated by the Customs Department. Moreover, the Appellant has relied upon the evidence of the values of the contempourneous imports in this regard. The Appellant has filed an affidavit dated 14.11.2025 as permitted by the Tribunal, which clearly shows that the imports made by the Appellant were at higher unit price than the unit price of the contemporaneous imports. Ld. Counsel further argued that the statements tendered by the Appellant have been retracted. The grounds for rejection of the retractions in the Impugned Order are incorrect and baseless. The Ld. Adjudicating Authority (AA) has inferred from the statements of the Appellant which were taken under coercion. Moreover, no independent document was produced as evidence to corroborate the statements. Ld. Counsel contended that the reliance upon the E-mail communication between the Appellant and the foreign buyer is incorrect as there is no mention that it relates to imports of goods by the Appellant. Ld. ....
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....Shri Setty and affixed his signatures on the sheets, which related to transfers at his behest and were recovered from the premises of Shri Setty. Ld. Counsel stated that the Appellant in his further statement dated 03.02.2010 corroborated his earlier statements of having indulged in undervalued imports from his overseas suppliers M/s Precision Mastech Enterprises Company, Hongkong and M/s Quick Electronic Co., China. He also confirmed that the under- invoiced portion of the value of imports would be remitted through non- banking channels for which, he utilized the services of Shri Settty. Ld. Counsel contended that after having filed the retraction, which was denied by the Directorate, Shri Setty in his statement dated 18.06.2010 admitted his past statements as well as the veracity of the statements made by the Appellant. Ld. Counsel pleaded that the Appellant had thus indulged in making payment of Rs. 4,85,34,020/- to Shri Setty from Feb, 2006 to December, 2009, so as to enable Shri Setty to arrange credit of equivalent foreign exchange to overseas suppliers of the Appellant. Ld. Counsel therefore pleaded to dismiss the Appeal. 4. We have considered the rival submissions and th....
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....a [(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 brevimanu. At the same time, it is to be noted that merely because a statement is retracted, it cannot be recorded as involuntary or unlawfully obtained. It is only for the maker of the statement who alleges inducement, threat, promise, etc. to establish that such improper means has been adopted. However, even if the maker of the statement fails to establish his allegations of inducement, threat, etc. against the officer who recorded the statement, the authority while acting on the inculpatory statemen....
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.... or (ii) has been received from any place outside India (duly authenticated by such authority or person and in such manner as may be prescribed) in the course of investigation of any contravention under this Act alleged to have been committed by any person, and such document is tendered in any proceeding under this Act in evidence against him, or against him and any other person who is proceeded against jointly with him, the court or the Adjudicating Authority, as the case may be, shall- (a) presume, unless the contrary is proved, that the signature and every other part of such document which purports to be in the handwriting of any particular person or which the court may reasonably assume to have been signed by, or to be in the handwriting of, any particular person, is in that person's handwriting, and in the case of a document executed or attested, that it was executed or attested by the person by whom it purports to have been so executed or attested; (b) admit the document in evidence notwithstanding that it is not duly stamped, if such document is otherwise admissible in evidence; (c) in a case falling under clause (i), also presume....
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....that since no case of under invoicing of the import of goods has been detected by the Customs Department, the underlying basis of the present case under FEMA cannot be sustained. In this regard, as prayed by the Ld. Counsel for the Appellant a table of the value of the contemporaneous imports was allowed to be filed under an affidavit. On perusal of the affidavit, we find that the table was taken as printout from the CD sold by M/s Tips Software Services Pvt. Ltd., Mumbai. We find that the source of the data contained in the table has not been disclosed either in the affidavit or in the documents filed by the Appellant and the private publisher. Moreover, the function relating to the value determination for the import of goods even on the basis of the value of contemporaneous import is that of the Customs Department. Such determination cannot be made in the process of present Adjudication of the Appeal. The pleadings have been made in the Appeal, that nothing has been produced by the Respondent as to show that the contraventions of the Customs Act 1962 have occurred. We observe that the proceedings under the Customs Act and those under the FEMA are independent of each other. Even i....
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....unsel for the Appellant has pleaded that penalty could not be imposed on the Appellant in view of the Judgment in Hindustan Steel Ltd. vs. State of Orissa. The provisions of Section 13(1) of FEMA are reproduced below: "If any person contravenes any provision of this Act, or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes any condition subject to which an authorisation is issued by the Reserve Bank, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in such contravention where such amount is quantifiable, or up to two lakh rupees where the amount is not quantifiable, and where such contravention is a continuing one, further penalty which may extend to five thousand rupees for every day after the first day during which the contravention continues." Thus, there is nothing in the Section which can indicate directly or indirectly requirement of mens rea. Words like "willful", "deliberately", "intentionally" etc. are missing. The Hon'ble Supreme Court in the Judgment dated 23.05.2006 in the matter of The Chairman, SEBI v. Shriram Mutual Fund, [(2006) 5 SCC 361] ha....