SAFEMA Tribunal deleted a ₹4.08 crore FEMA charge due to lack of corroborative evidence, holding that a surname on unverified loose sheets cannot establish ownership or contravention.
FEMA Violation Charge Quashed for Lack of Evidence
SAFEMA Tribunal has set aside a ₹4.08 crore FEMA contravention allegation, ruling that merely finding an individual’s surname on third-party loose sheets, without independent verification or documentary support, is insufficient to establish guilt under the Foreign Exchange Management Act (FEMA). While upholding certain other contraventions and reducing overall penalties, the Tribunal emphasized evidentiary standards in enforcement proceedings.
The adjudicating authority had relied on informal handwritten notes to attribute financial dealings to the individual. The Tribunal held that such uncorroborated material lacks probative value and does not meet the threshold of reliable evidence. It reiterated that enforcement actions must be based on authenticated records and not conjecture.
"A mere mention of a name or surname in loose, unauthenticated papers of a third party cannot be the basis for imputing liability under FEMA."
For practitioners, this decision underscores the necessity for the Enforcement Directorate (ED) and adjudicating officers to produce credible, verifiable evidence. It may set a precedent for challenging weak documentary foundations in FEMA cases, particularly those relying on seized but unauthenticated material.
