TaxTMI 
TaxTMI 
2026 (3) TMI 987
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.... Foreign Exchange Management Act, 1999 (FEMA, 1999) against the order dated 15.02.2024 of the Adjudicating Authority wherein M/s Zaveri Exports Pvt. Ltd. and Shri Sunil Kumar Tayal, Director of M/s Zaveri Exports Pvt. Ltd. were held guilty of the contravention of section 3(a) & 3(b) and section 42(1) of FEMA, 1999 respectively. Penalty of Rs. 39,00,00,000/- and Rs. 10,00,00,000/- was imposed respectively. 2. It is a case where an information was received that M/s Zaveri Exports Private Limited ('ZEPL') has indulged in the purchase of Gold from Dubai illegally. Thereafter, investigation was initiated by the Directorate of Enforcement, Hyderabad. During the investigation, documents were obtained from the Income Tax Department, Hyderabad....
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....ubai illegally through several persons and made payments in Cash. In order to ascertain the facts of the case, Shri Sunil Kumar Tayal was summoned u/s 37 of FEMA to record his voluntary deposition wherein his statement was recorded on 21.09.2020. He admitted that the certain transactions were recorded against the dealing in gold from the dealers of Dubai. After the price is negotiated with Dubai dealers, they used to instruct him to pay cash to their agents in Hyderabad against delivery of Gold. The agents, sometimes used to take cash delivery directly from him or otherwise used to instruct him to deliver cash at certain places. Agents used to inform Gold price in Dubai Market and accordingly he used to send payments in Indian Rupees after ....
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....ent corroboration. These entries, even if admissible, cannot by themselves constitute sufficient evidence to fasten liability. The Hon'ble Supreme Court in CBI v. V.C. Shukla held that entries in books of account may be relevant under Section 34 of the Evidence Act, but such entries alone would not be sufficient in order to charge any person with liability unless the same is corroborated by independent evidence. In the present case, no effort was made to verify the alleged transactions from the purported sellers or intermediaries, despite availability of their details. 9. It is also submitted that Section 3(a) of FEMA, 1999 prohibits the dealing in or transfer of 'foreign exchange' or 'foreign security' to any person other than an author....
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....he judgement of the Appellate Tribunal in Jaipur IPL Cricket Pvt. Ltd. vs. The Special Director, Directorate of Enforcement, Mumbai in Appeal no. FPA-FE-9/MUM/2013 dated 11.07.2019. 13. The appellants restricted their argument to the above stated during the final hearing and prayed for a lenient view. Submission of respondent: 14. The appeal was contested by the counsel for the respondent. It was submitted that the penalty imposed on the appellants is justified. The arguments made would be referred to while recording findings to the argument raised by the counsel for the appellant. It is to avoid repetition of the facts and for the sake of brevity. Findings & analysis: 15. We have heard the arguments and perused the document ....
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....y the WhatsApp chats retrieved by the Income Tax Department. Thus, the present case is not one of uncorroborated loose sheets but of documentary evidence supported by admissions. 18. The appellant argued that there was no independent verification from Dubai sellers or intermediaries. However, lack of independent verification does not dilute the evidentiary value of the admissions made by the appellant. Proceedings under FEMA, 1999 are adjudicatory in nature and are governed by the standard of preponderance of probabilities. The appellant admitted that the payments were made in cash to agents on instructions of Dubai traders, coupled with the description "Dubai transfer" in contemporaneous records, reasonably establishes that the payments....
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....counted sales and purchases before the Income Tax Department. The excess stock and the unrecorded transactions lend further support to the inference that the gold transactions were not conducted through lawful import channels. Moreover, no material has been produced by the appellants to demonstrate that the gold was legally procured from Dubai was imported through authorised channels or that payments were routed through authorised dealers. As regards the liability of Shri Sunil Kumar Tayal, the material on record establishes that he was a promoter, major shareholder, and person in charge of the day-to-day affairs of M/s ZEPL. The contraventions were committed with his knowledge and active involvement, as reflected from his statements. There....