TaxTMI 
TaxTMI 
2024 (7) TMI 424
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....n India were permitted to acquire foreign exchange worth DM. 38,56,114.00 conditionally for the purpose of effecting remittance outside India for importation of "Machineries" against the Industrial Licence No. PER: 598 (1995) EOB/671/95 dated 25 11.95 issued by Govt. of India Ministry of Industry, Department of Industrial Policy and Promotion, Secretariat for Industrial Approvals, EOU Section, New Delhi. It was further revealed that though the said Machineries were imported and installed in their said manufacturing unit for the purpose of manufacturing goods for exports, but no export was made and thus the said M/s. Grapco Industries Ltd. had failed to fulfil the export obligation and have failed to comply with the conditions subject to which the said licence was issued to them under the EOU Schemes and have thereby utilized the said foreign exchange to the tune of DM. 38,56,114.00 otherwise than for the purpose for which it was acquired. After conclusion of investigations, a Memorandum, referred to hereinabove, was issued to the noticees for their failure to comply with the conditions subject to which the said foreign exchange to wit DM. 38,56,114/- was released and acquired....
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....ustries Ltd. in 1994 as a clerk. At that time, he was looking after the banking transactions and any other work as assigned to him by the Managing Director of the said company through Sh. R.P. Jhunjhunwala. He pointed out that on or about 20.06.2000 applicant was appointed as a Director of the said company, under the name Mahesh Kumar Nathany, as per direction of Shri R.P. Jhunjhunwala, then Managing Director of the company. He pointed out that since last quarter of 1999, the business of said company started declining and thereafter the company went into financial crisis due to which salary could not be paid for a long time. Applicant resigned as Director on 19.07.2001 and he had no role in the said company after he left. Subsequently, present appellant came to know that Shri R.P. Jhunjhunwala died in August, 2001 and the company went into liquidation. During the period when appellant worked as Director between 20.06.2000 to 19.07.2001, the company had not done any import, export business therefore, applicant has no occasion to sign any document relating to import &export business of the said company. Summon u/s 40 of FERA, 1973 was wrongly issued by E.D., Kolkata without appreciat....
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....Memorandum contained vague and general allegations and there was nothing to indicate as to how and on the basis of what evidence or records the proceedings had been initiated against the applicant; vii. That none of the documents relied upon in the said Memorandum whisper about any contravention of the provisions of FERA, 1973 by the applicant. Appellant also filed written submissions on 20.05.2005 and 30.06.2006 which are in Annexure D. In letter dated 30.03.2006 in addition to the above defence, the appellant has submitted that he has not signed any document pertaining to import and export of the company. He was made a director of the company in 2000 and at that time there was no activities like export of goods or import of any goods. After leaving the company on 19.07.2001, he is not aware about the affairs of the company. Being not satisfied with the reply given by appellant Mahesh Kumar Agarwal @ Mahesh Kumar Nathany, the Adjudicating Authority in para no. 6.8 at page 14 of the impugned order held- 6.8 From the case records, I find that Shri Mahesh Kumar Agarwal @ Mahesh Nathany, noticee, appeared on 19.4.2002 in response to the summons and his statemen....
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.... 6.12 I find from his own statement dated 19.4.2002, that Shri Mahesh Kumar Aggarwal was working in the same company from 1994. He admitted as having changed his name from Mahesh Kumar Nathany to Mahesh Kumar Aggarwal when he had to sign as Director of the company. He did that at the behest of then Managing Director Shri R.P Jhunjhunwala. His becoming Director of the company in 2000 is only in continuum of his working for the company since 1994 I am therefore inclined to hold him guilty of aforesaid contravention in terms of section 68 of FERA. 1973 and he is liable to penalty under section 50 of FERA, 1973. Accordingly, penalty of Rs. 5,00,000/- was imposed upon him in individual capacity and the other noticees. Aggrieved by the said order, appellant Mahesh Kumar Agarwal @ Mahesh Kumar Nathany filed the present appeal. 3. During the arguments, learned counsel for the appellant submitted that the Adjudicating Authority failed to appreciate the fact that penalty cannot be imposed upon him just because he was director of the company for a brief period between 20.06.2000 to 19.07.2001, whereas, the machinery was imported by the company during the year 1994-1995. He pointed ou....
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....oreign exchange worth DM 38,56,114.00. He further contended that appellant has admitted the fact that he joined the appellant company in the year 1994 and he remained in the said company throughout, till he was elevated as director for the period from 20.06.2000 to 19.07.2001, and hence, he was duty bound to take the steps for affecting exports during his tenure, as director of the company. 5. After hearing the rival submissions, we have given our thoughtful consideration to the same. As per section 68 of FERA, 1973 pertaining to offence by companies states that; "68. Offences by companies .-(1) Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time of the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to punishment if he proves that the c....