2008 (6) TMI 638 - AT - FEMA

Tribunal Revises Order: Penalty Increased from Rs. 25,000 to Rs. 4,00,000; Respondent Must Pay Remaining Rs. 3,75,000 Promptly.

The tribunal allowed the revision petition, modifying the impugned order by increasing the penalty from Rs. 25,000 to Rs. 4,00,000. The respondent, having ... - Issues Involved:1. Legality, propriety, and correctness of the Adjudication Order.2. Quantum of penalty imposed.3. Delay in filing the revision petition.4. Authorization of the revision petition.Detailed Analysis:1. Legality, Propriety, and Correctness of the Adjudication Order:The revision petition was filed to examine the legality, propriety, and correctness of the Adjudication Order No. ADJ/JIV35-36/99/AKM dated 29th October 1999, passed by the Deputy Director, Enforcement Directorate. The respondent was held guilty for contravention of Sections 8(1), 8(2), and 9(1)(f)(i) of the Foreign Exchange Regulation Act, 1973. The tribunal noted that the respondent did not appeal against the order, thereby accepting the conclusion of guilt. Hence, the merits of the impugned order were not discussed further.2. Quantum of Penalty Imposed:The revisionist challenged the quantum of penalty, arguing that Section 50 of the Foreign Exchange Regulation Act, 1973, provides for a penalty of up to five times the amount involved. The adjudicating authority imposed a penalty of Rs. 25,000, which was deemed insufficient considering the misconduct and the amounts involved in the contraventions. The tribunal referred to the Supreme Court judgment in Smt. Bachahan Devi v. Nagar Nigam and other cases to discuss the interpretation of statutory language, particularly the use of 'shall' and 'may.' It concluded that the adjudicating officer had abdicated his duty by imposing an inappropriate penalty. Consequently, the penalty was increased to Rs. 2,00,000 for each count in the two Show Cause Notices, totaling Rs. 4,00,000.3. Delay in Filing the Revision Petition:The revision petition was filed on 9.4.2001 against the impugned order dated 29.10.1999, resulting in a delay of one year, five months, and twenty days. The tribunal noted that this delay was not explained in any manner whatsoever.4. Authorization of the Revision Petition:The revision petition was filed by Shri T.K. Gadoo, DLA, without any authorization, and the revisionist was termed as 'Appellant.' The tribunal found that the revision petition was filed without proper authorization.Conclusion:The tribunal allowed the revision petition and modified the impugned order to increase the penalty from Rs. 25,000 to Rs. 4,00,000. The respondent, who had already deposited Rs. 25,000, was directed to deposit the balance amount of Rs. 3,75,000 within seven days from the date of receipt of the order, failing which the revisionist could recover the same in accordance with the law.