SAFEMA Tribunal dismisses ₹4.08 crore charge; uncorroborated third-party papers insufficient to prove violation.
Surname on Loose Sheet Not Proof of FEMA Violation
The SAFEMA Tribunal has dismissed a ₹4.08 crore penalty allegation under FEMA for lack of credible evidence, ruling that a surname on an unauthenticated third-party loose sheet cannot establish violation. The authority had relied solely on such sheets to allege illegal capital account transactions.
The Tribunal emphasized that evidence must be admissible and corroborative. It upheld other contraventions supported by bank records and remittance documents, but reduced penalties and exonerated nominal directors lacking control or knowledge.
The ruling sets a precedent on evidentiary thresholds in FEMA cases. Legal teams should challenge proceedings based on unverified documents and assert the rights of non-executive directors under Rule 3(2) of the FEMA (Adjudication) Rules.
Citations
- FEMA, 1999, Rule 3(2)
