(Per : HONOURABLE MR.JUSTICE AKIL KURESHI) These appeals arises out of a common order dated 16.9.2008 passed by the Appellate Tribunal for Foreign Exchange by which the tribunal was pleased to confirm order in original dated 11.7.2000 passed by the competent authority under the Foreign Exchange Regulation Act, 1973("FERA" for short). It is not in dispute that the appeal is maintainable only on question of law as per section 54 of the FERA Act as well as per section 35 of the successor Act i.e. the Foreign Exchange Management Act, 1999 ("FEMA" for short) under which present appeals are filed.
Counsel for the appellants raised following contentions :
1) That for confiscation of Rs.4.80 lakhs of Indian currency, there was no evidence for breach of section 63 of FERA..
2) That composite penalty for breach of section 8(1) and 8(2) of FERA was not permissible.
3) That the entire order of the competent authority as confirmed by the appellate tribunal was based on confessional statement which was subsequently retracted.
4) That imposition of penalty of Rs.50 lakhs each on the two appellants who were brothers was wholly arbitrary.
From the record however, we find that amount of Rs.4.80 lakhs represented converted Indian currency of the US dollar with respect to which competent authority found there was contravention under section 63 of FERA. The Competent Authority has the powers to confiscate such currency, if while trying contravention under section 56, the adjudicating officers found that there is contravention of Section 51 and if he thinks fit, in addition to any sentence of penalty which may be imposed for such contravention, he may also direct that any currency, security or any other money or property with respect to which contravention has taken place, shall be confiscated to the Central Government. Explanation to Section 63 provides inter-alia that for the purpose of said section, property in respect of which contravention has taken place shall include,
(b) Indian currency, where the said property is converted into that currency.
Thus when two authorities have held that amount of Rs.4.80 lakhs represented Indian converted value of US dollars , it was open for the competent authority to order its confiscation.
With respect to order passed solely on confessional statements, we record that in addition to such confessional statements, the competent authority as well as the appellate tribunal referred to and relied upon corroborative evidence in form of notes, chits, statements and several other materials. Order of the competent authority therefore, cannot be said to be based solely on confessional statements.
With respect to the question of imposition of penalty being arbitrary, we notice that penalties were imposed for contravention of Section 8(1) and 8(2) of FERA, for which penalty is provided in section 50. The penalty which the authorities can impose may go upto five times the amount of value involved in contravention. In the present case, contravention was huge. The Indian equivalent of Foreign currency alleged to have been involved was close to Rs.2 crores. The penalty amount could therefore, have been five times that much. Since the penalty imposed is within the powers prescribed under the penal section and is within the discretion of the competent authority, in our opinion, no question of law arises.
In the result, appeals are admitted only for consideration of following question of law :
"Whether the impugned order levying consolidated penalty for the breach of separate violation under Section 8(1) and 8(2) of the FERA is patently bad and illegal and wholly unauthorised?"
(Akil Kureshi,J.) (C.L.
Soni,J.) (raghu) Top