TaxTMI 
TaxTMI 
2023 (7) TMI 1529
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....hat for 12 outward remittances totalling Rs. 2,39,90,081.68 sent abroad from the account of M/s. Akzo Nobel India Ltd. in Deutsche Bank, Tolstoy Marg, New Delhi, no Exchange Control Copy of the Bills of Entry had been submitted and the said Foreign Currency had not been surrendered to the Authorised Dealer, Deutsche Bank. Show Cause Notice No. T-4/2/FEMA/DZ/2014/JD(AR) was issued on 31.03.2014 for contravention of the provisions of Section 10 (6) r/w 10 (5) of FEMA further r/w Regulation 6(1) of Foreign Exchange Management (Realization, Repatriation and Surrender of Foreign Exchange) Regulations 2000. The four individual appellants were charged as Director of the Company for aforementioned contraventions under Section 42(1) of FEMA. 3. The Adjudicating Authority in the Order dated 30.01.2015 held the five appellants herein guilty of charges levelled in the Show Cause Notice dated 31.03.2014 for 10 out of 12 remittances made abroad. For 2 remittances of amount Rs. 29,58,050/- he accepted alternative documents like Bill of Lading copy, Certificate of Analysis, Certificate of weight and Packing List submitted by the appellant herein as proof for having imported the goods. He theref....
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.... Appellants referred to the written submissions given on 06.01.2023. He reiterated that there was abnormal unexplained delay of 12 years by the Department which was the main reason why the Appellant Company could not trace any of its records and produce documents to establish that it had in fact filed the Bills of Entry with the Authorised Dealer. He pleaded the violation of principles of natural justice since the Adjudicating Authority ignored that the benefit under the RBI Master Circular should go in their favour. He also submitted that three of the Directors were not part of the Company at the relevant time of the impugned transactions. He submitted in detail ten case laws which supported his arguments. Learned Counsel for the Appellants in his rebuttal to the arguments of the Learned Counsel for the Respondent strongly pleaded that the appellant Company has long standing and credibility and during the year 2001-02 it had imported goods worth Rs. 842 crores. However, the impugned transactions represented miniscule proportion of imports made by the Company. 7. Learned Counsel for the Respondent argued that the appeal is without merit and hence should be dismissed. He contende....
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....d on 31.03.2014 by the Respondent that the Appellant Company asked for some more time to respond vide letter dated 06.05.2014 and sent certain enclosures vide letter dated 07.05.2014. The appellants have taken the position that they were not aware of the directives issued by the respondent yet how they chose to respond only after issuance of Show Cause Notice has not been explained by them. The fact that for three communications from the respondent, the Appellant Company did not respond does not reflect well on the working of the Appellant Company which has been claimed to be a Company of long standing. The appellants have also taken the plea that they have been shifting their offices and hence they could not locate the documentary evidences of the imports made against the reported remittances. It is puzzling that in a well-established Company re-location of office should have caused records to be misplaced that even alternative documents as proof of import could not be traced. 9. The Appellants have strongly taken the plea of latches. They have stated that a delay of over 12 years in issuing the Show Cause Notice by the Respondent after receipt of information from the RBI shoul....
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....f 2003 in the case of The Chairman, SEBI vs. Shriram Mutual Fund & Ors. His Lordships stated in para 20 of the judgment:- "In our considered opinion, penalty is attracted as soon as the contravention of the statutory obligation as contemplated by the Act and the Regulation is established and hence the intention of the parties committing such violation becomes wholly irrelevant. A breach of civil obligation which attracts penalty in the nature of fine under the provisions of the Act and the Regulations would immediately attract the levy of penalty irrespective of the fact whether contravention must be made by the defaulter with quilty 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." Reading of Section 13 of FEMA which is the Section under which penalty is imposed for contravention of any of the provisions of the Act or any rule, regulation, notification, direction, order or any condition subject to which an authorization is issued by the Reserve Bank of India makes it obvious that the language of t....
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.... even on merit the appellants therein had raised substantial defence to raise sufficient doubt with regard to the allegations that the appellant had not made imports in respect of the 3 remittances. The Hon'ble High Court has mentioned about documents which clearly brought out the communications of the appellants where they had mentioned about the copies of the relevant Bills of Entry having been submitted to the Banks as well as to the Adjudicating Authority and to the Appellate Tribunal which were not taken note of during these proceedings. Moreover, the Hon'ble High Court has categorically stated that the enquiry by the ED was initiated belatedly. On the other hand, in the present appeal no alternative documents or communication has been produced by the appellants as to show any evidence for the import of goods for the reported 10 remittances. In fact, for 2 remittances out of 12 on production of alternative documents the Adjudicating Authority has accepted those as proofs for import against those 2 remittances. It has already been observed that the enquiry in the present appeal was initiated within four months of receipt of information from RBI. On not having received any respo....
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....ein it was held that for a FERA case penalty would not be imposed in quasi criminal proceedings merely because it is lawful to do so, and it is a matter of discretion to be exercised judicially and on a consideration of all the relevant circumstances. Again, the cited judgment has referred to the case of Shanti Prasad wherein proceedings under FERA have been held as quasi criminal in character. The present appeal is under FEMA where penalty has been imposed under Section 13(1) of FEMA which as already discussed entails penalty imposition for contravention of statutory obligation. Moreover, the cited judgments in this paragraph have held that even in quasi criminal proceedings penalty imposition can be done if discretion is exercised judicially. For the present appeal it has repeatedly been pointed out that in the impugned Order the Adjudicating Authority has judiciously made distinction between those remittances for which no proof whatsoever has been produced from those for which even alternative documents of proof have been produced and accepted. 16. In the fifth case cited by the Appellants Chennai Metropolitan Water Supply and Sewerage Board and Others vs. T.T. Murali Babu (2....
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....orcement Directorate is attributable to the appellants and therefore, they cannot be permitted to take advantage of the principle of laches. 18. In view of the aforementioned discussions, the contravention of the provisions of Section 10 (6) r/w 10 (5) of FEMA further r/w Regulation 6(1) of Foreign Exchange Management (Realization, Repatriation and Surrender of Foreign Exchange) Regulations 2000 by M/s. Akzo Nobel India Ltd. earlier known as M/s. ICI India Ltd. are established. In so far as the three Directors viz Sarv/Shri Nihal Kaviratne, Amit Jain & Sanjiv Mishra are concerned the Learned Counsel for the Appellants has submitted Form 32 under the Companies Act which clearly show their appointments have been made in 2009 & 2010 that is much after the impugned transactions had occurred. Form 32 in the case of Shri R. Gopalakrishnan shows that he vacated office as an Additional Director and reappointed as a Director w.e.f. 22.07.1999. In the appeal, pleading has been made that Shri R. Gopalakrishnan was nonexecutive and independent Director who was not involved in the day to day affairs of the Company. The Adjudicating Authority has acknowledged that the Show Cause Notice has fa....