TaxTMI 
TaxTMI 
2014 (9) TMI 1184
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....ate ('ED'), imposing a penalty of Rs. 2,00,000 on the company, i.e., Concorde Overseas Pvt. Ltd. ('COPL') and Rs. 1,00,000 each on the individual Directors for their failure to realise and repatriate the outstanding export proceeds in contravention of Section 18(2) and Section 18(3) of Foreign Exchange Regulations Act, 1973 ('FERA'). In the Memorandum dated 30th April 1999 issued by the ED to the Appellants, it was stated that between the years 1991 and 1993, there were six transactions of export undertaken by COPL in association with M.M.T.C. Ltd. ('MMTC') to the total extent of US Dollar ('USD') 1,95,519.61, the proceeds of which had not been realised. It was noted that despite the COPL applying to ....
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....so sent the Memorandum dated 30th April 1999, submitted a reply pointing out that MMTC was only a designated agency nominated by the Ministry of Commerce for supply of duty free gold to authorised EOUs like COPL for the purposes of manufacture and export of gold jewellery. COPL had been allotted a space in the Jhandewalan Jewellery Complex, which was leased to MMTC by the Delhi Administration. MMTC was, therefore, just a designated agency for the supply of gold and had no other role in the actual exports of jewellery which was done by COPL. Reference was made to an agreement dated 25th April 1991 executed between COPL and MMTC which only envisaged the method by which the export had to be done. The said agreement made it clear that in the ev....
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....elhi Jewels Inc., USA and Anglia Jewellers and Goldsmith Ltd. U.K., the proceeds were realised in full gradually. In cases of two of the GR forms, i.e. for USD 49,708.58 and USD 24,610.40 it was observed that "the proceeds have been substantially realised." It was further observed: "All this shows clearly that the notices had been taking sincere efforts to realise the proceeds, though such efforts cannot be termed as complete, given the circumstances of the case and the amounts involved." 6. In the above circumstances, it was held in the AO that in respect of the export proceeds to the extent of USD 1,80,519.61, there had been a contravention of Section 18(2) read with Section 18(3) FERA. The AO also negatived the plea of the Appellants th....
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....r. Azhar Qayum Butt, learned counsel for Appellants and Ms. Rajdipa Behura, learned counsel for the ED. 10. The Court is unable to find any error committed by the AT or the DD that the de facto exporter, for all practical purposes in the present case, is COPL. This flows from the pleading of Section 18(2) FERA, and in the context of the arrangement between MMTC and COPL which has been explained in the statement of Mr. Vijay Pal Singh, DGM, MMTC made under Section 40. FERA before the ED. It does appear that under the Scheme, MMTC was to provide gold which was then to be used for making the jewellery for export. It was COPL which was the actual exporter. The liability to real is the export proceeds was indeed that of COPL. 11. The Court is ....
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....e sincere efforts and in relation to some of the consignments substantial realisation had taken place. 14. It is seen that a letter was written on 11th November 1993 by the Oriental Bank of Commerce to the RBI pointing out that the exporters "are in continuous touch with their buyers and have been promised by them for remittance by March 1994. We recommend that subject may be allowed extension of time limit." Copies of the letters written by COPL to the RBI on 5th November 1993 and 14th December 1993 have been placed on record. There is a letter dated 6th July 1993, written by one of the buyers, Anglia Jewellers & Goldsmiths Ltd. to COPL stating that they had suffered a theft during February of that year which had created a cash flow probl....