2008 (1) TMI 1006 - AT - FEMA

Tribunal Upholds Penalty for Regulatory Breach: Shipping Agent's Appeal Dismissed Over Failure to Prove Goods Reached Russia.

The Tribunal dismissed the appeal, affirming the penalty imposed on the appellant for contravening the Foreign Exchange Regulation Act, 1973, and FEMA ... - Issues:- Appeal against penalty imposed for contravention of Foreign Exchange Regulation Act, 1973 and FEMA Act, 1999.- Allegation of off-loading goods meant for Russia in a third country.- Role and liability of the shipping agent in export proceedings.- Failure to produce documentary evidence of goods reaching the intended destination.Analysis:1. The appeal was made against a penalty imposed for contravention of Foreign Exchange Regulation Act, 1973 and FEMA Act, 1999. The appellant had complied with the pre-deposit order but failed to submit written submissions, leading to the appeal being taken up for disposal on merits.2. The appellant was accused of off-loading goods meant for Russia in a third country, contrary to the stipulated conditions governing such exports. The appellant, a shipping agent, was involved in exporting goods to Russia, but failed to provide evidence that the goods reached Russia as declared in the export documents.3. The appellant argued that as a shipping agent, they were not responsible for the realization of export proceeds and should not be held liable for any breach. However, the respondent contended that the appellant aided the exporter in contravening RBI circulars and FERA provisions by not furnishing necessary documentary evidence.4. Despite opportunities given, the appellant could not produce documents proving the goods reached the intended destination. The burden of proof was on the appellant, and their explanation for not providing evidence due to delays was deemed insufficient. The appellant's failure to maintain records and produce evidence led to the confirmation of guilt by the Adjudicating Officer.5. The Tribunal held that the appellant failed to discharge their burden of proving the goods reached the Russian port as declared. By not furnishing the necessary certificates and making false declarations in export documents, the shipping agents, including the appellant, were deemed to have abetted the exporter in contravening regulations.6. Consequently, the appeal was dismissed for lacking merit, and the appellant was directed to deposit the penalty amount within a specified timeframe. Failure to comply would result in the Enforcement Directorate recovering the amount. The pre-deposited sum by the appellant was to be adjusted from the penalty amount.