FINAL ORDER

20.03.2025 Dictated By: Rajesh Malhotra Present appeal is filed by Union of India under Section 19 of the Foreign Exchange Management Act, 1999, against the Order dated 20.04.2016 passed by the Special Director (Appeals) in appeal against the order of the Adjudicating Authority, whereby the appeal was allowed and thereby the order of Adjudicating Authority was set aside.

2. As per the facts of the case, the investigations in the instant matter were initiated on the basis of information received by the Directorate of Enforcement that the Respondent had purchased immovable properties in Goa in violation of the provisions of Foreign Exchange Management Act, 1999. Subsequently, in connection with the enquiries, directives under section 37 of the Foreign Exchange Management Act, 1999 were issued to the Respondent calling for documents for examining compliance of the provisions of the Foreign Exchange Management Act, 1999, and statements were recorded. A Show Cause notice bearing number T-4/8-Goa/AD/2012 dated 31.12.2012was issued to the Respondent for the alleged contravention of section 6(3)(i) of the Foreign Exchange Management Act, 1999 read with Regulation 8 of the Foreign Exchange Management (Acquisition and Transfer of Immoveable Property in India) Regulations, 2000 based on the Complaint No. T-3/74-GOA/2012 dated 31.12.2012.

The allegation in the Show Cause Notice premised on the fact that the Respondent being a foreign national, despite not fulfilling the criteria of a resident in India, acquired one immoveable property in the form of a residential flat bearing no. B1-9 with a built up area of 80.60 square meters and a mezzanine area of 18 square meters in Beira Mar Residential Complex- Phase V, Second Floor, Block B1, Saunta Vaddo, Baga Road, Calangute, Bardez, Goa for a consideration of Rs.15,34,660/- vide Deed of Sale dated 28.03.2003 and residential flat bearing no. B1-12 with a built up area of 40.30 sq. mts. with a mezzanine area of 9 sq. mtr. situated in the 2nd floor of Block B1, Beira Mar, Phase V, Saunta Vadoo, Baga Road, Calangute, Bardez, Goa for a consideration of Rs.5,00,000/- vide sale deed dated 19.1.2005, without requisite permission.

The matter was adjudicated vide Adjudication Order No.

ADJ/23/AD/JG/Goa/2014-FEMA dated 31.12.2012 by the Adjudicating Authority and a penalty of Rs.4,00,000/- was imposed on the appellant and the respective properties were also confiscated.

Aggrieved by the said Adjudication Order, the Noticee preferred an appeal before the Special Director (Appeals) under section 17 of the Foreign Exchange Management Act, 1999. Ld. Special Director (Appeals), vide Order dated 20.4.2016 in Appeal no. Spl. Director (A)/ FEMA/MUM/12/15-16, thereby setting aside the Adjudication Order No. ADJ/23/AD/JG/Goa/2014-FEMA dated 31.12.2012 and thereby order of penalty of Rs.4,00,000/-

and the confiscation of properties was cancelled.

Aggrieved by the Order dated 20.04.2016 of the Special Director (Appeals), the instant appeal has been preferred by the Appellant Union of India, through Deputy Legal Advisor, ED, Goa.

3. During the arguments Ld. Counsel for the appellant submitted that Ld. Special Director appeals without appreciating the factual and legal position erroneously allowed the appeal and thereby set aside the order of the confiscation of the immovable property and the penalty imposed upon the present respondent. He argued that as per Section 2 (v) of the Foreign Exchange Management Act, 1999, “person resident in India” means-“(i) a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include-

(A) a person who has gone out of India or who stays outside India, in either case-

(a) for or on taking up employment outside India, or (b) for carrying on outside India a business or vocation outside India, or (c) for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncer