SAFEMA Tribunal reduces Sanjay Jain’s penalty from ₹10 lakh to ₹5 lakh but upholds confiscation of unexplained foreign currency holdings.
FEMA Penalty Reduced by 50% Despite Confiscation
The SAFEMA Tribunal has halved the penalty imposed on Sanjay Jain under FEMA—from ₹10 lakh to ₹5 lakh—while sustaining the confiscation of foreign currency held without valid authorization. The adjudicating authority had found unexplained possession of foreign-denominated notes and instruments.
The Tribunal acknowledged Jain’s cooperation, lack of prior violations, and absence of criminal intent as mitigating factors. However, it stressed that retention of undeclared foreign currency remains a serious breach of exchange control regulations, warranting asset forfeiture.
"While penalty can be moderated on equitable grounds, confiscation serves as a deterrent to regulatory evasion."
The decision reflects a proportionate approach to enforcement. Practitioners should note that penalties may be negotiable or appealable on grounds of hardship or compliance history, but core contraventions like unauthorized forex possession are likely to attract strict remedies. This may influence settlement strategies in similar adjudications.
