TaxTMI 
TaxTMI 
2026 (1) TMI 859
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....r the contravention of Section 3 (d) of Foreign Exchange Management Act, 1999 (FEMA). Further penalty of Rs. 25,00,000/- was imposed on each of the Appellants Shri T. Gopi (Managing Director), Shri D. Madanraj (Director) and Shri S. Murugadoss (Director), for the contravention of Section 3(d) of Foreign Exchange Management Act, 1999 (FEMA), in terms of Section 42(1) and (2) of FEMA with respect to Shri T Gopi and in terms of Section 42(2) of FEMA with respect to S/Shri D. Madanraj and S. Murugadoss vide the Impugned Order. 2. This Tribunal vide Order dated 23.08.2016 disposed of the Applications for waiver of the pre-deposit of the penalty amount with the directions that the recovery of the amount of penalty imposed through the Impugned Order shall remain stayed till the disposal of the Appeals provided the Appellants deposited 10% of the total amount of penalty imposed against each one of them within 30 days from the date of communication of the Order and further furnish reliable security otherwise than bank guarantee of 40% of the amount of total penalty imposed against each of them within the same period. The Appeals of the Appellants against the said Order were dismissed by ....
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....at the evidence elicited from the seized pen drive could not be relied upon. The finding in paragraph 21.8.5 in the Impugned Order that the evidence obtained from the seized pen drive could be relied upon is wrong. Ld. Counsel also pleaded that the penalty of Rs. 1,30,00,000/- is too harsh. He further submitted that the allegation of under invoicing of import cannot be sustained without the Customs Authorities having issued any notice for under invoicing. He mentioned that the Complaint has failed to specify under which Sub-Section i.e. either (1) or (2), has Section 42 of FEMA been invoked. Ld. Counsel further stated that Shri S. Murugadoss was merely Technical Director, and hence no penalty could have been imposed. Ld. Counsel for the Appellants therefore prayed for allowing the Appeals. 5. Ld. Counsel for the Respondent Directorate stated that Woodtech Consultants Pvt Ltd., Bangalore, the Appellant Company, during the period from November, 2005 to December, 2007 without the general or special permission of the Reserve Bank had paid Indian currencies in India to Shri Sanjeev Yadav of Sivam Forex Pvt. Ltd., Bangalore for arranging to credit foreign exchange to the tune of US $ ....
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....ecord that the pen drive was seized in the present of independent witnesses and S/Shri Ratan Das and his son S. Megaravalli, the other Director of M/s Light N Sound Forex Pvt. Ltd. They have confirmed the entries which figured in the documents obtained from the pen drive as brought out in detail by the Ld. AA in the following extracts from paragraph 21.3 of the Impugned Order: "The said pen drive was opened in the presence of Shri Ratan Das, Managing Director of Light N Sound Forex Pvt Ltd, during the course of his statement given before the Assistant Director of Enforcement on 18/12/2007 and a printout of 1-60 pages were taken and marked as PD-1. When Shri Ratan Das was questioned about the entries in the said printouts, he, inter alia, stated that those printouts contained details of transactions which he had entered into in India on behalf of persons resident outside India; that he had friends and relatives abroad, who used to arrange foreign exchange for the credit of persons outside India from whom he used to receive equivalent Indian rupees and that those who wanted to receive foreign exchange outside India, used to contact him and he in turn used to contact his rela....
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....required under Section 65-B(4) is a condition precedent to the admissibility of evidence by way of electronic record, as was correctly held in Anvar P.V. • Under Section 65-B(4) of the Evidence Act, if it is desired to give a statement in any proceedings pertaining to an electronic record, it is permissible provided the following conditions are satisfied: (a) There must be a certificate which identifies the electronic record containing the statement; (b) The certificate must describe the manner in which the electronic record was produced; (c) The certificate must furnish the particulars of the device involved in the production of that record; (d) The certificate must deal with the applicable conditions mentioned Under Section 65-B(2) of the Evidence Act; and (e) The certificate must be signed by a person occupying a responsible official position in relation to the operation of the relevant device • The required certificate Under Section 65-B(4) is unnecessary if the original document itself is produced. This can be done by the owner of a laptop computer, computer tablet or even a mobile phone, by stepping into t....
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.... compliance of the conditions in Section 65-B of the Evidence Act." The aforesaid ratio in Anvar vs. Basheer was upheld once again by the Apex Court in the case of Arjun Panditrao Khotkar, with a minor modification. The relevant part of the order reads as below: "The last sentence in Anvar P.V. (supra) which reads as "...if an electronic record as such is used as primary evidence Under Section 62 of the Evidence Act..." is thus clarified; it is to be read without the words "Under Section 62 of the Evidence Act,..." With this clarification, the law stated in paragraph 24 of Anvar P.V. (supra) does not need to be revisited." 36. We, therefore, find that in the present case, the pen- drive itself being the primary evidence seized from the appellant's premises, there was no need for a 'certificate' under section 65-B(4) of the Indian Evidence Act, 1972 as contended by the appellant. 37. On the other hand, under section 39 of FEMA, 1999, where any document is produced or furnished by any person or has been seized from the custody or control of any person, court or the Adjudicating Authority shall presume, unless the contrary is proved, the truth of th....
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....n-drive was both admissible in evidence and constituted authentic evidence against the appellants." 8. The provisions of Section 39 of FEMA are as follows: "39. Presumption as to documents in certain cases.- Where any document- (i) is produced or furnished by any person or has been seized from the custody or control of any person, in either case, under this Act or under any other law; 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, ....
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....he individual Appellants have not denied either the statements of the other persons viz S/Shri Ratan Das, M. Srinivas and Sanjeev Yadav or questioned the documents obtained from the pen drive. In view of the admission about the truthfulness of the documents obtained from the seized pen drive as reflected in the statements tendered by the individual Appellants, the belated challenge on this ground, cannot be accepted. 10. Ld. Counsel for the Appellants has also contended that the provisions of Section 3(d) of FEMA are not invocable in the present set of facts and circumstances of the case. Section 3(d) of FEMA is as follows: "3. Dealing in foreign exchange, etc.- Save as otherwise provided in this Act, rules or regulations made thereunder, or with the general or special permission of the Reserve Bank, no person shall- (a) deal in or transfer any foreign exchange or foreign security to any person not being an authorised person; (b) make any payment to or for the credit of any person resident outside India in any manner; (c) receive otherwise through an authorised person, any payment by order or on behalf of any person resident outside India in a....
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....t the acquisition of foreign exchange totaling to US$ 2,89,665/- and Euro 16,696 by the above mentioned companies abroad, (which obviously in light of material evidence discussed in previous paragraphs were not remitted through an authorized person, as defined in FEMA), in consideration with the financial transaction of Indian currencies paid by Noticee No.1, through Noticee No.3 and Noticee No.4 to Shri Sanjeev Yadav, in Bangalore would fall within the meaning and ambit of Section 3(d) of FEMA. Hence, I reject the contention that no asset has been acquired outside India by any person in this case. 12. We do not find that the transactions which occurred in the present case can be excluded from the provisions of Section 3(d) of FEMA. The Explanation to Sub-Section 3 (d) of FEMA makes it clear that the payment from the Appellant Company/individual Appellants to Shri Sanjeev Yadav, who in turn used the services of Shri Ratan Das, so as to effect payment in foreign exchange to the persons resident outside India and had supplied the goods imported by the Appellant Company. The arrangements made by the Appellants in India were the financial transactions for consideration to acquire th....