https://www.taxtmi.com/caselaws?id=785102 Whether Regulation 3(2) prohibits third-party receipts for export proceeds: Regulation 3(2) requires receipts in a currency appropriate to the export's final destination as declared by the exporter (reflecting buyer's indicated destination), and does not contemplate payment by persons other than the buyer; thus receipts from third parties for exports made before 08.11.2013 contravened Regulation 3(2). Outcome: contraventions established for such transactions. Effect of RBI circulars permitting third-party payments: RBI circulars of 08.11.2013 and 04.02.2014 liberalized third-party payments but preserved bank obligations to verify bona fides and FATF norms; this did not validate earlier third-party receipts. Outcome: earlier receipts remain unlawful. Directorial liability under Section 42(1) FEMA: two individual directors admitted signing commercial invoices and participated in the export process, attracting liability. Outcome: individual penalties of Rs.3,00,000 each affirmed; corporate penalty reduced to Rs.15,00,000 and pre-deposits to be adjusted against penalties. en-us Thu, 08 Jan 2026 00:00:00 +0530 Sat, 17 Jan 2026 08:45:28 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=785102 Whether Regulation 3(2) prohibits third-party receipts for export proceeds: Regulation 3(2) requires receipts in a currency appropriate to the export's final destination as declared by the exporter (reflecting buyer's indicated destination), and does not contemplate payment by persons other than the buyer; thus receipts from third parties for exports made before 08.11.2013 contravened Regulation 3(2). Outcome: contraventions established for such transactions. Effect of RBI circulars permitting third-party payments: RBI circulars of 08.11.2013 and 04.02.2014 liberalized third-party payments but preserved bank obligations to verify bona fides and FATF norms; this did not validate earlier third-party receipts. Outcome: earlier receipts remain unlawful. Directorial liability under Section 42(1) FEMA: two individual directors admitted signing commercial invoices and participated in the export process, attracting liability. Outcome: individual penalties of Rs.3,00,000 each affirmed; corporate penalty reduced to Rs.15,00,000 and pre-deposits to be adjusted against penalties. Case-Laws FEMA Thu, 08 Jan 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=785102