Mohd. Asif Anwar Vs Assistant Director (Appellate Tribunal Under SAFEMA Delhi)
The Appellate Tribunal under SAFEMA partly allowed the appeal filed by Mohd. Asif Anwar against the penalty imposed for contravention of Section 3(a) of the Foreign Exchange Management Act (FEMA) relating to unauthorized dealing in foreign exchange.
The case arose when officials seized US $10,000 from the premises of Banaras Saree Centre, Kolkata, which was found in the personal custody of the appellant. The authorities alleged that the appellant and the firm were dealing in foreign currency without authorization from the Reserve Bank of India, thereby violating FEMA provisions.
The appellant argued that:
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He was not the owner or employee of the shop and had only come to assist his uncle temporarily.
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The seized foreign currency belonged to a foreign customer who had offered the amount for purchase of goods.
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Statements were allegedly recorded under pressure and there was no independent evidence showing that he dealt in foreign exchange.
Rejecting these arguments, the Tribunal held:
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US $10,000 was recovered from the personal custody of the appellant, and this fact was supported by statements of the appellant, his father, and his uncle.
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The firm earlier possessed a money-changing licence from RBI which had been cancelled, indicating that they were aware of the regulatory requirements.
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Handling foreign currency without RBI authorization amounts to contravention of Section 3(a) FEMA.
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Educational background or ignorance of law cannot be a defence.
However, considering the facts and circumstances of the case, the Tribunal held that the penalty of ₹2.5 lakh imposed by the Adjudicating Authority was excessive and therefore reduced it to ₹1 lakh, directing that the pre-deposit already made be adjusted against the reduced penalty.
Result:
The Tribunal partly allowed the appeal and reduced the penalty from ₹2.5 lakh to ₹1 lakh.
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
This Order disposes of the Appeal No. FPA-FE-88/KOL/2018 filed by Shri Mohd. Asif Anwar, against the Order No. 535/SD(A)-23/FEMA/2016-17 dated 03.02.2017 (Impugned Order), passed by the Assistant Director, Enforcement Directorate, Government of India, Kolkata. The Ld. Adjudicating Authority (AA) imposed the penalty of Rs. 2,50,000/- on the Appellant for the contraventions of Section 3 (a) of the Foreign Exchange Management Act, 1999 (FEMA), vide the Impugned Order.
