TaxTMI 
TaxTMI 
2026 (2) TMI 1344
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....of Rs. 4,43,96,119/-. The penalty of Rs. 12,00,000/- on M/s Nice Exports Pvt. Ltd. comprises of Rs. 6,00,000/- each for the contravention of Section 3 (d) and Section 7(1)(a) respectively of the Foreign Exchange Management Act, 1999 (FEMA). The penalty of Rs. 16,00,000/- on Shri Sanjeev Kumar Gupta comprises of Rs. 8,00,000/- each for the contravention of Section 3 (d) and Section 7 (1) (a) respectively of the Foreign Exchange Management Act, 1999 (FEMA) in terms of Section 42(1) and Section 42 (2) of FEMA. Further, penalty of Rs. 25,000/- has been imposed on Shri Sanjeev Kumar Gupta for contravention of Section 10(6) of FEMA read with Regulation 6 (A) of Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 to the tune of Rs. 1,70,880/-. Seized Foreign Currency USD 2639, Chinese Yuan 515, Swiss Franc 40 and Singapore Dollar 10, during the course of search at the residence of Shri Sanjeev Kumar Gupta has been confiscated. Total seizure of Rs. 55,50,000/- in Indian Rupees has not been confiscated. 2. Ld. Counsel for the Appellants stated that in the course of search on 01.02.2013 at the premises of M/s Happy Forex Pvt. Ltd., J....
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....ding made by the Adjudicating Authority that there is no reason to confiscate Rs. 55,50,000/- then it could not have been adjusted towards payment of penalty and should have been released. Ld. Counsel also pleaded that the Foreign Exchange found in the premises of the Appellants were legally acquired and not surrendering them to Authorised Dealer is a purely technical offence. Ld. Counsel also pleaded that the TTs credited in the Karnataka Bank Account of the Appellants were received from Goel Foreign Exchange of Canada and has no relevance with respect to the exports made by the Appellants. Ld. Counsel therefore pleaded to allow the Appeals. 4. Ld. Counsel for the Respondent Directorate contended that the documents incriminating the Appellants were seized during the search of M/s Happy Forex Pvt. Ltd. Jalandhar. It was also found during the investigation that Shri Jeevan Kumar arranged for foreign exchanges earnings from abroad as sale proceeds of the exporters of Punjab. For the Appellants the seized documents show entries which are corroborated with the actual foreign remittance received into the Bank account of the Appellant Company from Goel Foreign Exchange of Canada. In v....
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.... currency of Rs. 55,50,000/- have been brought out in the Impugned Order. Ld. Counsel therefore pleaded to dismiss the Appeals. 6. We have considered the rival submissions and material on record. We find that the Impugned Order is well reasoned and meticulously deals with the charges alleged against the Appellants, the defence put forward by the Appellants and the implications of the Judgments cited. We also note that the pleadings made in the Appeals, are by and large, reiteration of the defence taken by the Appellants during the course of the Adjudication proceedings. We also note that the critical documentary evidences of recovery of documents wherein 7 TTs numbers have been mentioned, from the premises of Happy Forex Pvt. Ltd. and the credit entries relating to these 7 TTs from Goel Foreign Exchange in Canada into the bank account of the Appellant Company, have not been disputed. What has been challenged by the Appellants is the fact that there is no statement or any other evidence as to show that against the said credit entries there has been transfer of cash payment to M/s Happy Forex Pvt. Ltd. and to Shri Jeevan Kumar. 7. It is pertinent to appreciate that the present ....
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.... actually due to them against any goods exported. This amount as held by the adjudicating authority, represented an amount transmitted from India through unauthorised channels to show a legitimate inward remittance. In assessing these findings, the Court cannot be oblivious of the fact that clandestine transactions of the nature involved in the present case, are within the peculiar knowledge of persons such as the Appellant, who are parties to those transactions. The burden which is cast upon the adjudicating authority to establish a violation must be assessed from a robust and common sense perspective. Clandestine violations take place under the cloak of secrecy. To impose a burden of establishing in an adjudication proceeding, every conceivable link of an unlawful transaction would result in a manifest failure of justice and would defeat the underlying purpose of the Act. The standard of proof in an adjudication proceeding cannot be equated with the rigorous standard in a criminal trial. The proof required in an adjudication proceeding is on a preponderance of possibilities. The Department has discharged the burden cast upon it of proving the breach of Sections 3(b) and 3(d)." ....