TaxTMI 
TaxTMI 
2008 (8) TMI 1038
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....00 (Rupees two lakh fifty thousand only) against the appellant, M/s. Tamil Nadu Industrial Guidance & Report Promotion Bureau(GUIDANCE) and Rs. 20,000 (Rupees twenty thousand only) each against the appellant, C. Ramachandran, & M. Raman for contravention of provisions of Section 9(1)(d) r/w 68(1) of the Foreign Exchange Regulation Act, 1973. The appellants have made payment of the 50% of the penalty amount in their respective appeals in compliance of the order of this Tribunal dated 03.11.2004 where presently these appeals are taken up for final disposal on merits. 3. I have heard elaborate arguments of Shri M. Ganesan, Advocate on behalf of the appellants and Dr. Shamsuddin, DLA for the respondent and gone through the record, relevant law....
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....s. Image, Dubai where the appellants were found guilty and being aggrieved these appeals have been preferred by the appellants. 4. It emerged from evidence on record that no worthwhile service was rendered by M/s. DFCL and in fact, M/s. Image Securities LLC agreed to accept rupee payment for their service rendered through M/s. DFCL in India. The search of the office premises of DFCL was conducted by Enforcement Officers on 17.10.1996 which resulted in recovery of certain incriminating documents. The statements of the manager of DFCL, Madan Lal Chhajer were recorded where in his statement dated 25.10.1996 he admitted that though there was an agreement between DFCL and Guidance to provide consultancy service but they did not provide any such....
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....DFCL on the basis of its claim that it has got excellent connections in Gulf and African countries and was confident of promoting investment for Tamil Nadu. The facts confessed before the Enforcement Directorate were totally kept out of knowledge of M/s. Guidance by these two companies with the malafide intention and it was not correct to say that the payment was made by the appellant to M/s. DFCL on behalf of M/s. Image Securities LLC, Dubai and the ingredients of Section 9(1)(d) of the FER Act were not proved. 6. It will be appropriate here to mention the Provisions of Section 9(1)(d) of the FERA to better appreciate the legal position in this regard which provides as under : Section 9. Restrictions on payments. - (1) Save as may be pr....
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....M/s. Image Securities LLC to the Director of M/s. Guidance on the letter head of M/s. DFCL inviting the director of M/s. Guidance to Dubai. The said letter was sent by FAX by M/s. Image Securities LLC, Dubai. It is also worth noting that C.B. Bhandari and Ashish Nanda were two directors who were common to both M/s. Image and M/s. Dynasty. M/s. DFCL was maintaining the account of M/s. Image Securities LLC in their account books. Thus from evidence on record, it was established that when M/s. Guidance could not get permission of the RBI to remit the fees to M/s. Image Securities LLC, a proposal was made by M/s. DFCL for equivalent amount of U.S. $ 8,000 P.M. and services were rendered by M/s. Image Securities LLC to M/s. Guidance and monthly ....
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.... the levy of penalty irrespective of the fact whether contravention must be made by the defaulter with guilty intention or not. We also further held that unless the language of the statute indicates the need to establish the presence of mens rea, it is wholly unnecessary to ascertain whether such a violation was intentional or not. On a careful perusal of Section 15(D)(b) and Section 15-E of the Act there is nothing which requires that mens rea must be proved before penalty can be imposed under these provisions. Hence once the contravention is established then the penalty is to follow. In our view, the impugned judgement of the Securities Appellate Tribunal has set a serious wrong precedent and the powers of the SEBI to impose penalty und....