TaxTMI 
TaxTMI 
2023 (7) TMI 1474
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....osed by the Adjudicating Authority on the respondent M/s. OSR Infra Private Limited, RR District (Respondent 1) and for enhancement of penalty of Rs. 1,00,000/- (Rupees One Lakh Only) on the respondent Shri Vamsidhar Maddipatala, Director, M/s. OSR. Infra Private Limited (Respondent 2). The penalty of Rs. 2,00,000/- which has been imposed on Respondent 1, for contravention of section 6(3)(b) of FEMA 1999 r/w provisions of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations 2000, comprises of Rs. 50,000/- for contravention of Para 9 (1) (A) of Schedule-1 to the said Regulations, another Rs. 50,000/- for contravention of Para 9 (1) (B) of Schedule-1 to the said Regulations and Rs. 1,0....
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....e unavoidable circumstances. She further argued that the Adjudicating Authority has examined each of the contravention, the compliances made thereof and has exercised his discretion judiciously while imposing the penalty. The respondent in their reply to the appeal have stated the unavoidable circumstances as operational reasons and shortage of staff. The respondents have clarified that on one occasion the authorized signatory was abroad. For the delay of 72 days in allotment of shares, the respondents have stated that holding of general meeting of members for approval of increase in authorized share capital and share valuation certificate from a Chartered Accountant took some time. The respondents have pleaded that they did not prefer to f....
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....lenient view for imposition of penalty. The moot question here is whether the Adjudicating Authority was judicious in taking the lenient view for the imposition of penalty. It is obvious from the facts of the case that the Respondents have complied with the provisions of the Regulations, albeit with delay. The Regulations have stipulated certain provisions which are to be complied with for category of cases specified therein, for the in-flow of FDI from abroad. It appears that the prescribed provisions under the Regulations which are mandatorily required to be complied with are in the nature of substantive provisions for the said Regulations. Any non-adherence to the prescribed time limits in meeting the compliances to these substantive pro....
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....judicating Authority has ignored the provisions of section 13(1) of FEMA which provides for imposition of penalty up to thrice the sum involved in the contraventions. Section 13(1) of FEMA, 1999 states:- "If any person contravenes any provision of this Act, or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes any condition subject to which an authorisation is issued by the Reserve Bank, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in such contravention where such amount is quantifiable, or up to two lakh rupees where the amount is not quantifiable, and where such contravention is a continuing one, further penalty which may....
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....o exercise his discretion, albeit judiciously, for imposition of penalty. The Adjudicating Authority has made a finding in the impugned Adjudication Order that the contraventions are technical in nature and keeping in view the nature of contraventions he has taken the lenient view in imposition of penalties. 11. The learned counsel for the respondents has cited the Hon'ble Supreme Court in the judgment dated 4-8-1969 in Civil Appeals No. 883 to 892 of 1966 in the case of Hindustan Steel Ltd. v. State of Orissa [1978 (2) ELT (J 159) (SC)] held;- "Whether penalty should be imposed for failure to perform statutory obligation is a matter of discretion of the Authority to be exercised judicially and on a consideration of all the relevant ....