TaxTMI 
TaxTMI 
2024 (9) TMI 562
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.... appeal, a challenge has been made to the order dated 27.11.2006 passed by the Special Director imposing the penalty of Rs.70 lakhs on M/s Tips Industries Ltd. and Rs.20 lakhs on Shri Kumar S. Taurani for the contravention of Section 6(3)(a) of the Foreign Exchange Management Act, 1999 (in short `the Act of 1999') read with Regulations 5,6 and 13 of the Foreign Exchange Management (Transfer or Issue of any Foreign Security), Regulations, 2000(in short `Regulations, 2000) and thereby in terms of Section 42(1) of the Act of 1999, the penalty referred to above was imposed upon the appellant. 2. It would be relevant to mention that the appeals in hand were earlier dismissed by this Tribunal vide its order dated 09.01.2020. It is after dealin....
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....appreciation of the issues in reference to the quantum of penalty. Brief facts of the case. 5. The appellant was served with a Show Cause Notice dated 19.06.2006 alleging contravention of Section 6(3)(a) of the Act of 1999 read with Regulations 5,6 and 13 of the Regulations, 2000. The appellant Kumar S. Taurani was charged for contravention in terms of Section 42(1) of the Act of 1999. 6. It is a case where during the course of investigation against M/s Tips Industries Ltd, Mumbai, it was gathered from the letter dated 16.10.2002 that appellant firm had made an application on 07.06.2001 to RBI, Mumbai for its approval for the acquisition of Dashmesh International, Mauritius. The RBI had conveyed its approval vide letter dated 22.11....
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....im: "(i) That DILM was engaged in International Trading in blank and pre-recorded audio cassettes and CD-ROMs and in the course of expansion of operation into USA and South Africa. For compliance with local legislations, Dashmesh International Ltd., New Jersey, Dashmesh International CA Ltd., California and M/s. Dashmesh International Music S.A. (Proprietary) Ltd. South Africa were incorporated on 04.02.2000, 19.05.2000 and 15.12.1999. (ii). DILM acquired the entire equity in Dashmesh International Ltd., New Jersey on 22.08.2001, Dashmesh International CA Ltd., California on 22.08.2001 and M/s. Dashmesh International Music SA (Proprietary) Ltd., South Africa on 01.08.2001. (iii). On 22.11.2001 the Reserve Bank of ....
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.... DILM's internal accruals. (viii). On 04.03.2005, however, as the business of DILM and the step-down subsidiaries did not perform to expectations and the WOS and the step-down WOSs were incurring losses, the Company applied to the Reserve Bank of India for permission to close down the WOS. (ix) On 20.07.2005, by its letter, the Reserve Bank of India accorded its approval to the Company's application for closure of the WOS and advised the Company to surrender the holding licence, if issued, and to produce evidence of repatriation of a sum of AED 2,24,095.22 towards realizable equity investment". 8. In light of the facts given above, the prayer was made to reduce the penalty appropriately so that the old matter of year 20....
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....national Music of South Africa was incorporated on 15.12.1999. 12. The learned counsel for the appellant submitted that the RBI vide its letter dated 22.11.2001 gave clearance to the appellant company to make the investments and for loan. However, it is a fact that subsequently vide its letter dated 18.04.2003, the Company had clarified the position in respect of the investments made by it in DILM and its step-down WOSs. It was explained that the omissions to give particulars of the step-down WOSs were shown to be unintentional and occasioned only for the reason that the Company had disclosed its business plans to the entities named above and it was to prevent the Company from the local laws applicable in different countries where the en....