Company officer liability for neglected export-proceeds compliance retained, while monetary penalty was reduced to the pre-deposit.

Company-liability provisions under FEMA attach responsibility to a person in charge of business conduct or whose neglect contributes to the company's contravention. Authority to execute export-related banking and transaction documents established responsibility for non-realisation and repatriation of export proceeds; neglect was attributable despite no proven consent, connivance or mens rea. Liability was therefore retained. The monetary penalty was limited to the amount already deposited, modifying the adjudication order while preserving the finding of contravention.

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Issues: (i) Whether the appellant was liable under the company-liability provision for non-realisation and repatriation of export proceeds; (ii) Whether the penalty imposed upon the appellant required reduction.

Issue (i): Whether the appellant was liable under the company-liability provision for non-realisation and repatriation of export proceeds.

Analysis: Liability for a company's FEMA contravention attaches to a person in charge of and responsible for the conduct of its business, or where the contravention is attributable to that person's consent, connivance, negligence or neglect. The appellant's authority to sign all export-related documents submitted to the bank, including documents connected with export transactions and bank-account operations, established responsibility that could not be wholly disowned. Although consent or connivance was not established, neglect could be attributed. FEMA contraventions attract civil penalties, including for technical or procedural non-compliance, without requiring mens rea.

Conclusion: The appellant was liable for the contravention due to neglect in relation to non-realisation of export proceeds; this issue was decided against the assessee.

Issue (ii): Whether the penalty imposed upon the appellant required reduction.

Analysis: The circumstances warranted limiting the monetary penalty to the amount already deposited by the appellant.

Conclusion: The penalty was reduced to Rs. 75,000, being the pre-deposit amount; this issue was decided in favour of the assessee.

Final Conclusion: The adjudication order was modified by retaining liability while substantially reducing the monetary penalty.

Ratio Decidendi: A company officer authorised to execute export-related banking documents may incur liability for a company's FEMA contravention where neglect in discharge of that responsibility is established, even absent consent, connivance or mens rea.

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