TaxTMI 
TaxTMI 
2018 (10) TMI 1420
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....gal issue. 3. Counsel for the appellant has submitted before us that the judgment of Bhupinder V. Shah, has a direct bearing of the facts of the present case even appellant has a good-case on merit. 4. The brief facts are that on the basis of information received from the RBI, Mumbai that M/s Ennore Traders P Ltd have failed to realize their export bills aggregating to Rs. 7,76,96,395/-. Further enquiries made with their Bankers namely Indus-lnd Bank, Bandra Br, Mumbai were asked to furnish the details of all the export bills pending realization for more than 180 days against the notice company and in their letter dt.25.6.2003 the Indus Ind Bank intimated the details of the outstanding export bills of the year 1996 to the tune of U.S.$23,23,284.29 ( Eqvt.to Rs. 8,06,35,005) and further the company has not submitted any ETX form for the outstanding export bills . 5. Thereafter M/s Ennore Traders P. Ltd. was asked under section 37 of FEMA, 1999 to furnish the details of the export bills pending realization, G.R. copies and details of ETX submitted to the RBI and amounts waived by RBI. However, the said communication was returned with remarks closed/not known. Therefore, the said I....
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....7.04.2011 submitted the exhaustive reasonable efforts made, as expected under the statute both orally and by written submission (which do not contain all oral submissions) by the Appellant in the capacity of one of the Directors of the company and also submitted during the course of unconcluded hearing held on 17.02.2011 as mentioned below:- a) that the buyers made payments regularly but after sometime started defaulting in the payments raising quality dispute and other reasons such as recession and flooding of cheap materials from other countries. b) that in all there were 4 buyers viz. Genimpex Sarl, AOZT TRIO, Moscow Tan Tekstil and Kings Electronics to whom the goods were exported. i) Genimpex Sarl:- the buyer after sending initial payments promptly started faulting in their payments. Similarly other exporters such as M/s Modern Terry towels Ltd. (who was for the same reasons as the buyer was not raceable despite court summons & who exported goods to this buyer were also cheated by the one S. Natarajan, Director of the said company. On the basis of complaint he was arrested by Lome Police and he jumped bail and his present whereabouts and unknown and the Ministry of Ext....
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.... 7111/- against bill of U.S. 66,895.33 but later stated that due to cheaper supply from Eat Asian counties and flooding of terry towel in USA markets they could not sell the goods and did not pay the balance despite so many follow ups as M/s Ennore foundries ltd. could not take any legal action due to exorbitant legal fees and the company being sick could not find the initial legal fees. (c) Since the Company has not been doing any business since 1997 due to heavy losses incurred due to quota system and the buyer going under ground and the Asst. Registrar of Companies after the due process under the Companies Act, 1956. The Appellant was under earnest belief that the liability of himself as Director of the Company is coexistent with that of the defunct company (which is an ultimate beneficiary) as after liquidation no communications can be undertaken in his individual capacity, which peculiar facts were never considered by the Ld. Respondent. d) The authorized dealer though was fully briefed of the true circumstances and without any legal basis even after knowing the sorry state of affairs chose not to bring the real picture of affairs of the company while forwarding the reques....
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....d after considerable delay is bad in law since its inception and therefore all subsequent action including the imposition of penalty is bad and non est in the eyes of law. b) The Appellant submits that imposition of penalty is quasi criminal proceedings and in the absence of any proceedings against the Company ( which is the ultimate beneficiary ) and imposition of penalty there can never be imposition of any penalty of Directors under FERA/ FEMA as per the statutory ingredients of both sections 8 and 42 of FEMA, 1999 for the simple reason that person who has allegedly contravened the provisions of section 8 of FEMA , 1999 is none other than M/s. Ennore Industries Ltd. The Ld. Respondent chosen not to impose any penalty on the company and in the process there is a inconsistency cropped in being that the exporter is not found to be guilty but the Director is found to be guilty which is against the principle of finding guilty against the Directors of the Company by the Apex court. c) The appellant submits that the blame worthy conduct by which imposition of penalty in the case of non realization of export proceeds is totally different from other contraventions under FEMA,1999. Th....
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.... equals and two equals are to be treated equally failing which the impugned order need to be treated as the one passed in contravention of principle of natural justice and therefore in violation of Article of 14 of Constitution of India. 12. The appellant has filed all relevant annexures referred in the facts of the appeal in support of its submission. 13. We have gone through the facts of the present appeal as well as with the relevant dates and facts in the matter of Bhupinder V. Shah in which the similar has been finally decided in favour of the appellants. The same are almost identical. 14. COMPARATIVE CHARTS OF FACTS AND SETTLED LEGAL POSITION (INSTANT CASE AND THE JUDGEMENT OF HIGH COURT OF DELHI IN BHUPINDER V.SHAH) S.No FACTS/ SETTLED LEGAL ISSUE JUDGEMENT OF DELHI HIGH COURT IN THE CASE OF BHUPINDER V.SHAH IN THE INSTANT APPELLANT'S CASE 1 DATE OF SHOW CAUSENOTICE 10.8.2004 (Ref.para 10 of judgement) SCN issued after sunset clause after 1.6.2002 follwing the Repeal of FERA 5.10.2005 (Ref. page No.26 of compilation of Appeal) .In this case also SCN issued after sunset clause after 1.6.2002 following the Repeal of FERA 2 Extent of violation Rs.1073 million or R....
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....by the judgement dt.26.3.2010 of High Court of Delhi in the case of Bhupinder V.Shah Vs UOI ( a copy of which was already submitted ). 18. Admittedly the Company through which exports were made during 95-96 and as the company has become defunct no exports were made thereafter besides the buyers had gone under ground , auction at the Turkey port following change in the quota system etc.( i.e. letters dt.27.4.2010 and 6.12.2010 as replies to the show cause notice. These replies were not at all considered as could be seen from the findings and order of the Adjudication order. 19. Mr. Prashant Pandey Ld. Consultant appearing for the Directorate submitted that since it is the continuing offence the Directorate has jurisdiction under FEMA. The however learned counsel appearing on behalf of appellant has pointed the same arguments made by the respondent before the High Court in the case of Bhupinder V. Shah by its ASG Mr. Chandok who appeared in the High Court of Delhi and submitted but the same were rejected duly dismissed by the Honourable Judge of High court of Delhi in para No.13 of the above judgement in the case of Bhupinder V.Shah Vs UOI. The said factual position has not denied ....