The AT upheld findings that the Appellant diverted duty-free...

The AT upheld findings that the Appellant diverted duty-free imported silk yarn to the domestic market and exported non-declared goods, constituting contraventions of s.3(b) and s.3(d) of FEMA, and confirmed liability for both contraventions. Noting humanitarian and economic considerations, the AT reiterated an earlier waiver of the pre-deposit requirement and, on merits, reduced the cumulative penalty from Rs.12,00,000 to Rs.6,00,000, apportioned at Rs.3,00,000 for each contravention. The appeal was partly allowed to the extent of penalty reduction; all parties are anonymized and the substantive finding of misuse of 100% EOU entitlements and resultant foreign exchange ramifications was maintained.