FINAL ORDER

13.08.2024 FPA-FE-134/BNG/2019 The appeal is directed against the order dated 12.12.2008 passed by the Special Director, Directorate of Enforcement whereby the penalty of Rs.40 lakhs has been imposed for violation of Section 8(1) of the Foreign Exchange Regulation Act, 1973 (in short ‘the Act of 1973) and another penalty of Rs.20 lakhs for contravention of Section 9(1)(a) of the Act of 1973.

Brief facts of the case.

2. It is a case where one Bala Ravi Kishore was apprehended at Hyderabad Airport along with foreign currency equivalent to Rs.54,20,854/-. The statement of Bala Ravi Kishore was recorded under Section 108 of the Customs Act, 1962 wherein he, inter alia, admitted for carrying currency to Singapore which was given to him by his brother-in-law Shri BalaShivaprasad (appellant). It was to be delivered to Shri S. Ramzan at Singapore. He was not having requisite valid permission from the RBI to acquire or possess the foreign currency and to deliver it to a person in Singapore.

3. In the statement of Bala Ravi Kishore, name of Shri S. Ramzan was disclosed to whom the currency was to be delivered. It is also that the currency found with him was routed through his brother-in-law otherwise given by one Shri Raheem, a resident of Chennai. The currency was sent to Bala Ravi Kishore through the driver Syed Mohd. Yousuf. The statements of others which include Shri B. Ramesh Babu, brother of Bala Ravi Kishore were also recorded under Section 108 of the Customs Act. He had acknowledged his meeting with Syed Mohd. Yousuf, the driver of his brother-in-lawShivaprasad. He received Syed Mohd. Yousuf at the railway station on 10.12.1999 on the instructions of his brother-in-law. Then, a packet was received by him from Syed Mohd. Yousuf and delivered the same to Bala Ravi Kishore.

4. The statements of Syed Mohd. Yousuf and appellant B. Shivaprasad were also recorded. In the statement of Syed Mohd. Yousuf, he admitted that being a driver of the appellant, he met Mr. Rahim in Burma Bazar, Chennai and collected foreign currency and delivered it to Shivaprasad and on his instructions, delivery was made to Ramesh Babu for onward delivery to BalaRavi Kishore. The statement of Ramzan of Singapore was also recorded under Section 108 of the Customs Act. He admitted his business of import and export along with the business of money exchange in Singapore. He further admitted that Shivaprasad informed that he is sending the foreign currency to him through Bala Ravi Kishore. The further statement was that Shri Shivaprasad used to send smuggled foreign currency to him even previously.

5. The respondent caused Show Cause Notice to all those involved in contravention of the provisions of the Act of1973. The impugned order was thereupon passed after giving an opportunity of hearing to all of them. The appeal in hand is only of B. Shivaprasad and, therefore, the counsel for the appellant restricted his argument on the legal issue otherwise facts of the case have been given only for the convenience.

Legal issues raised by the appellant.

6. It is submitted that the Show Cause Notice and the impugned order are based on surmises and conjectures because no material could be produced to prove contravention of Section 8 (1) and (9) (1)(a) of the Act of 1973. The respondent haverelied on the statement recorded under Section 108 of the Customs Act. The statement under Section 108 of the Customs Act cannot be relied for passing the order under the Act of 1973 being an independent enactment. The respondent, however, relied on the statement recorded under Section 108 of the Customs Act for passing the order and, therefore, it deserves to be set aside on the aforesaid ground also. It is more so when the respondent could have recorded the statements under Section 40 of the Act of 1973 to make out a case. However, no statement under the said provision was recorded. In fact, no investigation was conducted under the Act of 1973. Thus, the impugned order becomes erro