AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 723
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.... On the basis of information, a search operation was conducted on 14.09.2022 where several incriminating documents were seized from the residential premises of the appellants. Their statements were recorded on five different dates and the appellants were confronted with crucial documents and were asked to explain their association with the foreign assets lying with M/s EEL. The appellants failed to provide proper explanation for the said foreign exchange held by them outside India. The order of seizure was issued on 01.06.2023 by the Assistant Director, Directorate of Enforcement under Section 37A(1) of the Act of 1999. 3. During the course of investigation, it was revealed that peak balance of USD 4,619,734.20 equivalent to Rs. 30,60,11....
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.... foreign exchange in contravention of Section 4 of the Act of 1999. The respondents failed to make differentiation between the company and the individual. The company is an artificial juridical person having a separate legal identity, distinct from its members. The Members/Directors of a company cannot be considered owners of the company's assets. In fact, the respondents failed to make distinction between the asset of the company and of the individual and for that corporate veil ought to have been pierced to treat the foreign exchange in the foreign bank accounts as being 'held' by the appellants. The counsel referred to the word 'held' which means that a person should be holding foreign exchange outside India in contravention of Section 4....
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.... amount so that the appellants may get a chance to seek compounding of the contravention through the process of law. The counsel for the appellants closed his arguments with the aforesaid. Arguments of counsel for the respondents: 7. The learned counsel for the respondents opposed the prayer. He submitted that the Commissioner of Customs (Appeals) has passed the appropriate order to confirm the seizure order dated 01.06.2023 to the extent of the amount of Rs. 30,60,11,193/- and accordingly no interference in the aforesaid order be made. 8. The learned counsel for the respondents referred to the similar prayer made by the appellants even before the Commissioner of Customs (Appeals) and was denied. It was even after considering the s....
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.... Act of 1999. The Commissioner of Customs (Appeals) confirmed the seizure of two Demat accounts for the value of Rs. 30,60,11,193/-. It is considering the alleged contravention of Section 4 of the Act of 1999. The allegation aforesaid has been refuted by the appellants, however, it is with fair admission that any order either way may affect the adjudication proceedings where only the penalty can be imposed. The prayer was accordingly made to cause interference in the impugned order and to secure the amount equivalent to the amount in two Demat accounts, the prayer was made to accept the FD with the lien of the respondents till the conclusion of the adjudication proceedings and if the appellants approach RBI for compounding, then subject to ....
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....e petitioner should sympathetically consider this request for allowing the respondents to substitute the seized properties (Demat accounts) with Fixed Deposits equivalent in value (Rs. 15,30,05,597/- each) to the amount alleged to have been held outside India. Therefore, I refrain from passing any order in this regard". 11. We find that similar prayer was made before the Commissioner of Customs (Appeals) where the petitioners were respondents in these appeals. They were asked to consider the request of the appellants sympathetically for allowing them to substitute the seized properties (Demat accounts) with Fixed Deposits for equivalent in value to the amount alleged to have been held outside India. The order for it was not passed for wa....