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Issues: Whether fiscal penalty could be sustained against a nominee director for alleged contravention of Section 11(2) of the Foreign Trade (Development & Regulation) Act, 1992 read with Rule 13 and Rule 14(1) and (2) of the Foreign Trade Regulation Rules, 1993 in the absence of any finding that he had aided, abetted, or was instrumental in the contravention.
Analysis: Section 11(2) of the Foreign Trade (Development & Regulation) Act, 1992 fastens penalty on a person who makes, abets, or attempts to make an export or import in contravention of the Act, rules, orders, or export and import policy. The record disclosed no allegation in the show-cause notice and no finding in the impugned orders that the petitioner, as nominee director, had abetted the contravention. The orders also did not indicate any role played by him in obtaining the licences, importing the raw materials, executing any undertaking, or dealing with the goods so as to attract Rule 13 or Rule 14(1) and (2) of the Foreign Trade Regulation Rules, 1993. Mere status as nominee director was insufficient to justify fiscal penalty.
Conclusion: The penalty imposed on the petitioner was unsustainable and unenforceable.
Ratio Decidendi: Penalty under Section 11(2) of the Foreign Trade (Development & Regulation) Act, 1992 cannot be imposed on a director unless the authority records a finding of personal contravention, abetment, or other legally relevant involvement in the prohibited act.
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