G JOTHIMANI NADAR Vs. DEPUTY DIRECTOR OF ENFORCEMENT

JUDGEMENT

(1.) HAVING failed before both the authorities below under the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as "the Act"), the person against whom an order for confiscation under section 63 of the Act and an order levying penalty under section 50 of the Act, were passed for contravention of section 9(1)(b) of the Act, has preferred this appeal under section 54 of the Act. As per section 9(1)(b) of the Act, no person in India shall "receive, otherwise than through an authorised dealer, any payment by order or on behalf of any person resident outside India". The concurrent finding arrived at is that the appellant has received otherwise than through an authorised dealer, payment of Rs. 40, 000 so unauthorisedly on behalf of one Cibar of Colombo, a person resident outside India, that the said Cibar took Rs. 10, 000 out of it, that the balance was kept by the appellant, which was seized from him at his residence in India on August 3, 1979. The said balance of Rs. 30, 000 was confiscated by the order of the first authority, the Deputy Director, Enforcement Directorate, Madras, who also levied penalty of Rs. 4, 000. The said order was confirmed by the order of the Foreign Exchange Regulation Appellate Board, Southern Zone, by order dated April 5, 1982, upholding the confiscation, however reducing the penalty from Rs. 4, 000 to Rs. 2, 000. Hence, this appeal.

(2.) THE main argument of learned counsel for the appellant is that the authorities below should have taken note of the circular of the Central Board of Direct Taxes dated August 5, 1971, the appellant being a migrant from Ceylon, and ought to have held that he has not contravened the above said section 9(1)(b). In this connection he also relies on C. Arasakumar v. Union of India [1986] Crl. LJ 647 (Mad) and the fact that special leave petition against it has been dismissed by the Supreme Court, which is noted in C. Arasakumar v. Union of India. Learned counsel for the respondent, on the other hand contends that the said circular or the abovesaid decisions have no application to the present facts. I have considered the rival submissions on the above aspect. I concur with the submissions of learned counsel for the respondent for the following reasons : THE said circular issued by the Central Board of Direct Taxes and addressed to all the Commissioners of Income-tax, no doubt deals with migrant income-tax assessees from Ceylon. No doubt the applicability of the said circular to similar proceedings under the Foreign Exchange Regulation Act was considered in the abovesaid C. Arasakumar v. Union of India [1986] Crl. LJ 647 (Mad), and it appears from the said decision that the said circular by one wing of the Central Government, viz., the income-tax wing, could be applied even with reference to a proceeding under the Foreign Exchange Regulation Act in relation to a migrant from Ceylon. (In the present case, the respondent appears to be one such migrant). But, let the material portions of the said circular be first seen ; they are as follows :

(3.) IT must be further noted that in the abovesaid C. Arasakumar v. Union of India [1986] Crl. LJ 647 (Mad), there is no confessional statement made by the assessee, as in the present case in relation to the abovesaid contravention of section 9(1)(b) of the Act. The confessional statement in the present case was made by the appellant on August 3, 1979 itself when the abovesaid seizure of Rs. 30, 000 was made. Based on the said statement, coupled with the other factors, the authorities below have come to the conclusion that the appellant has contravened the abovesaid section 9(1)(b).The reasoning of the first authority below in its impugned order in relation to the abovesaid statement dated August 3, 1979, can be gathered from the following passage found in the order of the said authority: "...Jothimani Nadar (appellant) in his statement dated August 3, 1979, inter alia stated that one Cibar of Cibar Confectionery of Colombo and a native of Trichy district, met him at his shop on July 26, 1979, and informed him that at the time of his (Cibar's) departure from Ceylon he made arrangement for a sum of Rs. 10, 000 to be delivered to him (Jothimani Nadar) or to Augustin (son-in-law of Shri Jothimani Nadar) and that he should receive the same, that as informed by him and as arranged by him from Ceylon on July 28, 1979, a person enquired about his name and his son-in-law's name and in the absence of both, the person who called at the shop delivered a sum of Rs. 40, 000 to Shri Dhana Singh, Manager of the shop for handing over to him. He stated that out of Rs. 40, 000 Shri Cibar received Rs. 10, 000 about two days prior to the date of the search and he (Cibar) informed him that he would receive the balance when he leaves for his native place. He stated that the seized amount of Rs. 30, 000 represented the same ... Shri Dhana Singh, manager of Victory Textile Centre was also questioned in this regard.