2019 (3) TMI 1518 - AT - FEMA

Tribunal sets aside penalties under FEMA for lack of evidence

M/s. Graphite India Ltd., Shri Ashwin Manani Versus The Joint Director, Directorate of Enforcement, Chennai

M/s. Graphite India Ltd., Shri Ashwin Manani Versus The Joint Director, Directorate of Enforcement, Chennai - TMI Issues:1. Imposition of penalties under FEMA, 1999 against appellants.2. Liability of appellants to pay penalties imposed on them.3. Compliance with FEMA regulations regarding export of goods.4. Alleged contravention of Section 3(a) of FEMA by the appellants.5. Interpretation of Regulation 12 allowing a person other than the exporter to receive foreign exchange.6. Burden of proof in showing contravention of statutory provisions.7. Proper consideration of evidence and understanding between parties in the judgment.Analysis:1. The judgment involves the imposition of penalties under FEMA, 1999 against the appellants. The penalties were imposed for contravention of provisions related to foreign exchange management, as specified in the order issued by the Directorate of Enforcement. The penalties were imposed on the proprietor of one company and the company itself for different contraventions.2. The issue of the liability of the appellants to pay the penalties imposed on them was raised before the Tribunal. The Tribunal was informed that one of the appellants had already deposited the penalty amount. The question arose whether the other appellants were also liable to pay the penalties totaling a specific amount.3. The case involved compliance with FEMA regulations concerning the export of goods. The investigation by the Directorate of Enforcement focused on certain exporters, including one of the appellants, for alleged contraventions of FEMA provisions in the export of humanitarian goods. The investigation included statements from company officials and a Show Cause Notice was issued.4. The alleged contravention of Section 3(a) of FEMA by the appellants was a key issue in the case. The Notice alleged that one of the appellants received foreign exchange without proper permission, leading to a violation of FEMA provisions. The appellants denied the allegations and cited Regulation 12 to support their position.5. The interpretation of Regulation 12, which allows a person other than the exporter to receive foreign exchange, was crucial in the case. The appellants argued that the Authorized Dealer should ensure compliance with conditions before accepting documents for negotiations. The Tribunal considered the compliance with Regulation 12 and the role of the Authorized Dealer in the transactions.6. The burden of proof in showing contravention of statutory provisions was discussed in the judgment. The appellants argued that the Directorate failed to provide evidence regarding the alleged non-compliance with regulations. The Tribunal emphasized the importance of proper evidence and compliance with procedural requirements.7. The judgment highlighted the need for proper consideration of evidence and understanding between parties. It was noted that the impugned order did not adequately address the evidence presented by the appellants. The Tribunal emphasized the importance of dealing properly with evidence and understanding the roles of the parties involved in the case.In conclusion, the Tribunal allowed the appeals filed by the appellants, setting aside the impugned order against them without imposing any costs.