TaxTMI 
TaxTMI 
2026 (5) TMI 207
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....ve appeal before the learned Tribunal, challenging the order dated 30.11.2004, whereby the learned Adjudicating Authority had imposed a penalty of Rs. 5 Lakhs on the appellant for the alleged contravention of Section 8(1) of FERA. 3. The respondent had imposed the above penalty alleging that one Akbar Veerji, an NRI, had opened a Non-Resident External ["NRE"] account with the Canara Bank by depositing foreign exchange in the following manner:- i. 01.07.92 (cash) US $500/- equivalent to Rs. 14,850/- ii. 04.07.92 (cash) US $10,000/- equivalent to Rs. 2,95,000/- iii. 17.07.92 (F.I.T.T) US $1,39,000/- equivalent to Rs. 42,29,756/-. 4. Out of the amount so deposited, a Cheque amounting to Rs. 30 Lakhs was issued in favour of the appellant on 17.07.1992. Claiming that the same was a violation of Section 8(1) of FERA, proceedings were initiated not only for imposition of penalty under Section 50 of the FERA but a criminal prosecution was also launched inter alia against the appellant. 5. As far as the criminal prosecution is concerned, by an order dated 30.11.2017 passed in CC No. 42/1/14, titled as, "Enforcement vs. Nemi Chand Jain & Ors.", the learned....
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....ant can be said to have violated Section 8(1) or Section 8(2) of the FERA. 12. In this regard, the relevant provisions of the FERA are reproduced hereinbelow:- "2(h) "foreign exchange" means foreign currency and includes- (i) all deposits, credits and balances payable in any foreign currency, and any drafts, traveller's cheques, letters of credit and bills of exchange, expressed or drawn in Indian currency but payable in any foreign currency; (ii) any instrument payable, at the option of the drawee or holder thereof or any other party thereto, either in Indian currency or in foreign currency or partly in one and partly in the other. xxx 8. Restrictions on dealing in foreign exchange.- (1) Except with the previous general or special permission of the Reserve Bank, no person other than an authorised dealer shall in India, and no person resident in India other than an authorised dealer shall outside India, purchase or otherwise acquire or borrow from, or sell, or otherwise transfer or lend to or exchange with, any person not being an authorised dealer, any foreign exchange: Provided that nothing in this sub-section ....
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....n exchange in any manner, that is, by purchase or otherwise acquiring or borrowing, or selling or otherwise transferring, or lending or exchanging the same, except by the authorized dealer. 16. In the present case, the allegation against the appellant is not of dealing in foreign exchange or of exchanging the same, but of receiving an amount in Indian Rupees from an NRE account of Mr. Akbar Veerji. The same cannot amount to a violation of Section 8(1) of FERA. 17. The learned Tribunal in holding to the contrary has placed reliance on an Explanation appended to Section 8(1) of FERA, and held that even receipt of money in Indian currency from an NRE account would be a contravention to Section 8(1) of FERA. We cannot agree to such interpretation. The Explanation has to be read strictly and in accordance with its grammatical meaning and a plain reading of the same does not support the finding of the learned Tribunal. The Explanation states that where the foreign exchange is deposited with another person or an account in foreign exchange is opened with another person, it shall be deemed to lending of foreign exchange to such other person. In the present case, there is no allegatio....
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....been wrongly framed at this stage would not be justified in view of the detailed reasons given by the ACMM while framing the charges (supra). In so far as the defence of the petitioner is concerned, it can always be brought to the notice of Learned ACMM during the course of trial. 13. Thus, I do not find any reason to interfere with the order framing of the charge which has to be passed by taking a prima facie view of the matter and not on the basis of any concrete evidence which may establish that petitioner would certainly be convicted of the charges leveled against him. I need not repeat the judgments which have been already cited in the order framing the charges in this regard. Hence I do not find any merits in this case. Petition filed by the petitioner is dismissed. Let the parties appear before the Trial Court on 17.04.2009." 21. The above order was, therefore, passed only by considering whether there is evidence on the basis of which the criminal prosecution of the appellant can proceed. The said criminal proceedings have culminated in the acquittal of the appellant vide order dated 30.11.2017 passed by the learned ACMM, wherein the Court has held as under:- ....