Voluntary statements recorded by investigating agencies are admissible in adjudication proceedings unless coerced. Immunity granted under one statute does not extend to independent contraventions of other statutes. The standard of proof in such adjudication is the preponderance of probabilities.

This Order disposes of the Appeals Nos. FPA-FE 142/HYD/2020 filed by M/s. Powertex Tools Co. Pvt. Ltd. (PTCL), FPA-FE-143/HYD/ 2020 filed by M/s. M. L. Tools Industries (MLTI) and FPA-FE-144/HYD/ 2020 filed by Shri Laxmi Narayan Gupta, against the Order No. JD/AG/06/HYZO/2020 dated 27.10.2020 (Impugned Order) passed by the Joint Director, Directorate of Enforcement, Government of India, Hyderabad Zonal Office. Penalty of Rs.3,56,00,000/- was imposed on M/s Powertex Tools Company Pvt. Ltd. and penalty of Rs. 16,05,852/- on M/s M. L. Tools Industries for contravention of Section 3 (b) of the Foreign Exchange Management Act, 1999 (FEMA). Penalty of Rs. 3,56,00,000/- was imposed on Sh. Laxmi Narayan Gupta, the Managing Director of M/s Powertex Tools Company Pvt. Ltd. for the aforementioned contravention read with Section 42 of FEMA. The amounts of contravention was Rs. 7,15,19,867/- with respect to M/s PTCL, and Rs. 16,05,852/- with respect to M/s MLTI. This Tribunal vide Order dated 07.10.2024 directed the Appellants to make pre-deposit of penalty of the amounts Rs. 1,40,00,000/-, Rs. 6,50,000/- and Rs. 1,40,00,000/- M/s PTCL, M/s MLTI and Shri Laxmi Narayan Gupta respectively. The pre-deposit Order has been complied with.

2. Ld. Counsel for the Appellant submitted that at the time of import, goods were cleared after due physical examination and due scrutiny of import documents. No discrepancy was found then. Ld. Counsel alleged that the statement of the Appellant was taken under threat and coercion. The statements were tendered at the dictates of DRI. It was never shown through investigation as to when, how much and to whom the payments allegedly made outside the banking system were in fact made. He clarified that of M/s MLTI Sh. Laxmi Narayan Gupta was the proprietor. Ld. Counsel further argued that the Order of the Customs Settlement Commission enhanced the import value far more than what was accepted in their application for settlement. He contended that value could not have been enhanced on the basis of the statements without appreciating the fact that goods had been physically examined and the documents were scrutinized at the time of assessment and not a single discrepancy was found in terms of descriptions and value of goods.

3. Ld. Counsel for the Appellants pleaded that a detailed reply to the Show Cause Notice (SCN) was filed whereby it was stated that the statements of the Appellant was recorded under duress and pressure. The SCN was without any iota of evidence. Ld. Counsel pleaded that the Impugned Order is bad in law. He contended that the ED, Hyderabad had no Jurisdiction to cause enquiry and issue SCN for the imports made from Nhava Sheva which falls under the Jurisdiction of Mumbai. Ld. Counsel also stated that no investigation has been made by ED and they have completely relied upon the investigation made by DRI. Ld. Counsel submitted that the Appellant had approached the Customs Settlement Commission due to health issues and to avoid litigation. He pleaded that Appeals may be allowed failing which the penalty may be made proportionate.

4. Ld. Counsel for the Respondent Directorate submitted that the summon was issued to Sh. Laxmi Narayan Gupta, MD of PTCL and Proprietor of MLTI. Shri Gupta in his statement dated 07.05.2019 under Section 37 of FEMA admitted the veracity of the statements which he had tendered before the DRI. In respect of his statements dated 15.06.2017, 30.06.2017 and 28.03.2018 given before the officers of DRI and the SCN issued by DRI, Shri Laxmi Narayan Gupta stated that, the overseas suppliers in