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TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1471
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....cated under Section 13(2) of FEMA. This Tribunal vide Order dated 12.11.2024 disposed of the Applications for waiver of the pre-deposit of the penalty amount with direction to pay Rs. 10,00,000/- each by the two Appellants as pre-deposit with the Respondent Directorate within six weeks of the Order. The Order reportedly has since been complied. 2. Ld. Counsel for the Appellants challenged the Impugned Order on the ground that it violates the principles of natural justice, since the Appellants were neither provided important relied upon documents nor granted any effective personal hearings. Ld. Counsel stated that the present case under FEMA had arisen from the case made out by the State Police under the NDPS Act. However, the case under FEMA continued even when the Appellants herein were exonerated by the Ld. Trial Court under the NDPS Act. Ld. Counsel submitted that summons which were received were duly responded as and when received. Ld. Counsel contended that the Hon'ble Apex Court has ruled in CBI vs. V C Shukla & Ors. [(1998) SCC OnLine SC 790] that contents of loose sheets cannot be relied upon to make allegations of Hawala Transactions. Ld. Counsel further contended that ....
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....to deal in foreign exchange of foreign securities. In the instant case, I find that no evidence has been adduced by the Noticees in the notice of the undersigned which shows that these transactions were carried out by both the Noticees through legal channel in their firm namely M/s Raja & Company, Amritsar. Therefore, I have no hesitation to conclude that these transactions of foreign exchanges were carried out by both the Noticees in unauthorized manner as neither the same were carried out with any authorized person nor the same were carried out in the capacity of authorized person in the firm M/s Raja & Company as there were no authorization/ license issued by Reserve bank of India to them. Moreover, these transactions were mentioned in the loose sheets prepared for the illegal transactions and recovered during the search of their premises. Thus, the Noticees have dealt with in foreign currencies in unauthorized manner in violations of provisions contained in Section 3(a) of FEMA, 1999 and the quantum of such transactions undertaken illegal manner comes to equivalent to Rs. 12,60,52,306/- and the notices have rendered themselves liable for penal action for the said illegal transa....
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....d and seized from the premises at 68, Link Road, Amritsar, it is found that both the Noticees have been disbursed an amount of Rs. 30,00,000/- and Rs. 5,09,60,740/- respectively to the persons resident in India at the instructions of the persons resident outside India. Thus, total amount of Rs. 5,78,80,740/- have been disbursed by the Noticees to the person's resident in India at the instructions of the person's resident outside India in violations of provisions contained in Section 3(b) of FEMA, 1999. Therefore, I hold that Paramdeep Singh and Gagandeep Singh have distributed the payment of Rs. 5, 78, 80,740/- to various persons resident of India on behalf of the persons residing outside India through illegal means and have contravened the provisions of Section 3(b) of FEMA, 1999 and rendered themselves liable for penal action under Section 13(1) of the Act ibid. xxxxx 24.4 The fact that the Noticees were engaged in acquiring foreign currency outside India by way of illegal large scale transfer of foreign exchange either in cash or in their accounts abroad as the details entered on some of the pages pertained to loose papers marked as 1 to 10 and 1 to 35 contai....
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....s are liable for penal action under Section 13(1) of FEMA 1999 for holding the foreign exchange outside India." 5. Ld. Counsel for the Respondent submitted that the Judgment cited by the Appellants relates to the criminal proceedings. However, the Impugned Order is result of civil proceedings wherein the said Judgment is not applicable. Moreover, the Appellants did not co-operate with either the investigation or the adjudication proceedings. Hence, the recovery of the documents in the form of the loose sheets from the premises of the Appellants in the presence of the mother can be relied upon to penalize the Appellants. It is obvious from the evasive behavior of the Appellants that they could not defend the contents of the recovered documents by providing plausible explanations. Further the contents stand established by the fact that the persons, whose statement were recorded were identified on the basis of the details mentioned in the recovered documents. These persons admitted as having received funds from unknown persons at the behest of the relatives living abroad. Ld. Counsel therefore pleaded to dismiss the Appeals. 6. We have considered the arguments and the pleadings ....
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....persons, whose contract details were mentioned in the said documents. 7. We find that the details of each of the contravention has been specifically mentioned in the Impugned Order, which have been brought out in the course of the arguments made by the Ld. Counsel for the Respondent as cited in paragraph 4 of this Order. There is a clear finding in the Impugned Order that the Appellants had undertaken the aforementioned transactions without having any FFMC license or specific authorization from the Reserve Bank of India. We also agree with the confiscation of Rs. 15,00,000/- recovered from the Appellants since they have been unable to explain the source of such cash with them. The challenge by the Appellants that why penalty for each of the violation of the Act has been imposed is best answered from the language used in the statute viz Section 13 (1) and 13 (2) of FEMA, which is as follows: "(1) 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 authorization is issued by the Reserve Bank, he shall, upo....