SAFEMA reduces penalty from ₹10L to ₹5L; retains foreign currency confiscation on contravention.
FEMA Penalty Halved, Confiscation Upheld
The SAFEMA Tribunal has reduced a FEMA penalty on Sanjay Jain from ₹10 lakh to ₹5 lakh but upheld the confiscation of unexplained foreign currency. The contravention related to retention of undeclared overseas funds under Section 13(1) of the FEMA, 1999.
The adjudicating authority had imposed full penalty based on total amount. The Tribunal applied proportionality, considering Jain’s cooperation, no prior violations, and partial explanation. However, confiscation stood as funds lacked legitimate origin trail.
The ruling underscores that while penalties may be moderated on equitable grounds, confiscation remains strict where illegality is established. Advisers should prioritize voluntary disclosures and mitigation strategies during adjudication.
Citations
- FEMA, 1999, Section 13(1)
