TaxTMI 
TaxTMI 
2007 (1) TMI 255
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....rovisions of Foreign Exchange Regulation Act, 1973 ('FERA') were violated. The appeal was admitted on 11th October, 2006 stating therein that 7 questions of law do arise from the order of the Tribunal dated 8-6-2006. Today, when this appeal is taken up for hearing, by consent of the parties the said 7 questions have been refrained into one question as follows:- "Whether on the facts and in the circumstances of the case, the Tribunal was justified in sustaining the penalty to the extent of Rs. 2,00,000 for the alleged contravention of section 8(3) and 8(4) of FERA read with section 49(3) and 49(4) of FEMA when admittedly, the goods purchased from the foreign exchange acquired by the appellant have been actually brought into India?" 2. ....
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.... called upon the appellant to show cause as to why the appellant should not be held guilty of violating section 8(3) and 8(4) of FERA as the appellant had failed to submit the Exchange Control copy of the Bill of Entry evidencing import of the goods into India for which the foreign exchange was released. By a letter dated 7-8-2003 the appellant was called upon to produce a certificate from the bank confirming the import of goods along with all other documents. The appellant addressed letters to the Bank and the CWC seeking requisite certificate from them so as to establish that the goods purchased by the appellant by remitting the foreign exchange, have been actually brought into India. As the bank as well as the CWC did not issue the requi....
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....lant had violated section 8(3) and 8(4) of FERA. However, in the facts and circumstances of the case, the Tribunal reduced the penalty from Rs. 6 lakhs to Rs. 2 lakhs. Challenging the said order, the present appeal is filed. 11. Section 8(3) and 8(4) of FERA relevant for this appeal reads thus:- "Restrictions on dealings in foreign exchange.-(1) and (2)** **** (3) Where any foreign exchange is acquired by any person, other than an authorised dealer or a money-changer, for any particular purpose, or where any person has been permitted conditionally to acquire foreign exchange, the said person shall not use the foreign exchange so acquired otherwise than for that purpose or, as the case may be, fail to comply with any condition to wh....
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....of acquiring the foreign exchange and if the person acquiring the foreign exchange fails to establish the above criteria, then, it shall be presumed that the foreign exchange has not been used for the purpose for which it was acquired or used for the purposes other than the purpose for which it was acquired. 13. In the present case, it is not in dispute that the foreign exchange was acquired by the appellant to import Chloramphenicol from a party in China and in fact the appellant has purchased Chloramphenicol from a party in China. It is not in dispute that the entire foreign exchange acquired by the appellant has been remitted to China and there is no dispute regarding the value, quality and quantity of the Chloramphenicol imported by ....
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....4) of FERA. However, it is held that by not furnishing Exchange Control copy of the Bill of Entry, the appellant has violated section 8(4) of FERA. 15. Section 8(4) of FERA does not require that the person acquiring the foreign exchange must furnish the Exchange Control copy of the Bill of Entry to establish that the goods purchased by utilising the foreign exchange has been brought into India. Therefore, it is open to the person acquiring foreign exchange to establish that the goods have been brought into India by any other means. In the present case, the goods purchased by the appellant by remitting foreign exchange have actually arrived in India and the same were cleared for warehousing. It is admitted that out of the three consignmen....