APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI FPA-FE-11/BNG/2015 Shri B.M. Rakesh … Appellant Versus The Joint Director Directorate of Enforcement, Bangalore … Respondent Advocates/Authorized Representatives who appeared For the Appellant : Mr. Richick Harikant, Adv.

Mr. Sumit Kumar, Adv.

Mr. Prem Ranjan Kumar, Adv.

For the Respondent : Mr. Surrender Kumar, Adv.

CORAM JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI BALESH KUMAR : MEMBER

FINAL ORDER

18.03.2025 This Order would dispose of the Appeal No. FPA-FE-11/BNG/2015 filed by Shri B. M Rakesh against the Order No. JD/02/BZ/2014-15/(FEMA)/(JD- SA) dated 27.05.2014 (Impugned Order) passed by Joint Director, Enforcement Directorate, Bangalore. Penalty of Rs. 14,20,000/- was imposed on the Appellant vide the Impugned Order for contravention of provisions of the Foreign Exchange Management Act 1999 (FEMA). Besides, the imposition of penalty, the seized amount of Indian Currency Rs. 36,72,000/-, Euro 1785 & AED 15 were confiscated. Penalty of Rs. 3,00,000/- has been imposed on one Shri Nemichand Jain who is not an Appellant in the present proceedings.

2. Ld. Adjudicating Authority vide the Impugned Order has found the following contraventions indulged in by the Appellant;

1) Section 3 (b) of FEMA to the extent of Rs 1,53,69,010/-by making said payment for the credit of Mr Matteo of M/s ITAL Program and Mr Adamo of BGB Italia, persons resident outside India, culminating in a penalty of Rs.

3,50,000/-.

(ii) Section 3(c) of FEMA to the extent of Rs.39,00,000/- by having received an amount of Rs.39,00,000/- by order of Mr. Zuhir residing in Dubai and the amount of Rs.36,72,000/-seized from his residential premises is also found to be involved in the contravention of the provisions of section 3 (c) of FEMA and liable for confiscation in terms of provisions of section 13 (2) of FEMA culminating in a penalty of Rs. 10,50,000/- and confiscation of Rs.

36,72,000/-.

(iii) Section 3 (a) to the extent of Euro 5000 by having purchased the foreign exchange from persons other than authorised person in foreign exchange and by having transferred Euro 1000 to Rita Babini, Export Manager of M/s Turri and the amount of Euro 1785 and AED 15 seized from his residential premises is also found to be involved in the contravention of the provisions of section 3 (a) of FEMA and liable for confiscation in terms of provisions of section 13 (2) of FEMA culminating in a penalty of Rs. 20,000/- and confiscation of EURO 1785 and AED 15.

3. Ld. Counsel for the Appellant prayed that the present case is based on statements without any documentary evidence. While not disputing the seizure of Indian Currency and Foreign Currency, the challenge is made to the grounds on which the seizure has been effected and the reasons on the basis of which contraventions of FEMA have been alleged. Ld. Counsel has argued that constant pressure was kept on the Appellant and the documents which were seized have been mis-interpreted to make the said allegations. He contended that the Appellant is a genuine businessman and came into contact with Ms. Jyothi of M/s Samaavesh, who being an influential person facilitated marketing of the goods imported, to the prospective buyers. Even though initially the foreign suppliers quoted higher rates but the same were brought down due to negotiations conducted by the Appellant. A margin of 5% was kept in invoices which were raised on M/s Samaavesh by the firms/companies of the Appellant viz. M/s Vainatheya International Agency and M/s Vriddhi Interiors. The seizure of currency effected form the place of the Appellant was in fact part of sale made by the Appellant to M/s Samaavesh who raised invoices to other companies.

4. Ld. Counsel for the Appellant further argued that charge made under Section 3 (c) is unjustified as the charge is based on confessional statements tendered under threat and coercion. The Impugned Order has also wrongly upheld the contravention of Section 3 (a) of FEMA. The Appellant had in fac