FINAL ORDER

29.09.2025

This Order disposes of the Appeal No. FPA-FE-17/KOL/2017 filed by Shri Mohammad Iqbal Siddiqi against the Order dated 09.01.2017 (Impugned Order) passed by Special Director (Appeals-FEMA), Kolkata. The Impugned Order has reiterated the Order in Original No. ADJ/11/LKZO/2016/AD(NBS) dated 30.03.2016 (OIO) passed by the Assistant Director, Directorate of Enforcement, Lucknow. Vide the OIO a penalty of Rs. 15,00,000/- was imposed on the Appellant and his property comprising of agricultural land at Pargana Deva Gram, District Barabanki was confiscated for contravention of Section 6(3)(i) of Foreign Exchange Management Act, 1999 (FEMA) read with Schedule II of Regulation 3 (1)(b) of the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000 of Foreign Exchange Management Act, 1999 & Regulation 3 (a) of the Foreign Exchange Management (Acquisition and transfer of Immovable property in India) Regulations, 2000 of Foreign Exchange Management Act, 1999. This Tribunal vide its Order dated 25.09.2024 disposed of the Application for waiver of the pre-deposit of the penalty amount with direction to the Appellant to pay an amount of Rs. 7,50,000/- within eight weeks, so as to meet the compliance to proviso of Section 19 of FEMA.

2. Ld. Counsel for the Appellant prayed that the impugned property was purchased from the lawful earning of the Appellant while he was working abroad. Ld. Counsel further argued that the bona fide of the Appellant cannot be questioned because he was not even aware of the said provision under FEMA. Ld. Counsel for the Appellant argued that while the impugned property was described as agricultural land, it was in fact not being used for agriculture purposes. Ld. Counsel contended that the Appellant purchased the said land to setup a poultry farm and a dairy farm. Ld. Counsel also argued that besides the imposition of penalty of Rs.15,00,000/- which is equal to the amount spent by the Appellant for the purchase of the impugned property, the said property has also been confiscated. Ld. Counsel therefore pleaded that the penal action is more than proportionate of the amount involved in the alleged offence. He pleaded that the Appellant has suffered for long in view of the case as the amount spent in development of a poultry farm could never be put to use to realize any income.

3. Ld. Counsel for the Appellant also contended that Section 6(3) of FEMA was omitted by the Finance Act of 2015 which was notified on 14.05.2015. He further stated that the Complaint under Section 16 (3) of FEMA 1999 was lodged on 22.05.2015 and the Show Cause Notice relating thereto was issued on 22.05.2015. Ld. Counsel contended that no such action could be initiated under FEMA after the relevant provision thereto was omitted on 14.05.2015. The Finance Act 2015 did not provide for any saving clause to save the right to initiate proceedings for liabilities incurred during the currency of the Act. Ld. Counsel further contended that even Section 6 of the General Clauses Act, 1897 will not be applicable to the instant case in view of the omission of the provision itself. In this regard the Judgment dated 04.09.2002 of the Hon’ble Supreme Court in the matter of M/s General Finance Co. & Anr. vs. Assistant Commissioner of Income Tax, Punjab (2002) 7 SCC 1 was cited. He therefore pleaded to allow the Appeal.

4. Ld. Counsel for the Respondent stated that the contravention of FEMA does not require mens rea. Even if the Appellant without intending to contravene the law, remitted lawfully earned savings while being a Non- Resident Indian, the contravention of the provisions of FEMA read with the conditionalities imposed under the Regulations, has occurred. Ld. Counsel for the Respondent further argued that, it is an admitted fact that the property purchased by the Appellant is an agricultural land. The nature of the land cannot be redetermined merely by the fact that it was not used for agricultural purpo