2025 (7) TMI 1267

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....ents, for contravention of Section 7 & 8 of FEMA, read with Regulation 9(1) & 13 of Foreign Exchange Management (Export of Goods & Services) Regulations 2000, for failing to realize exports proceeds amounting to Rs. 12,41,89,927/-, and accordingly, penalty of Rs.12,50,00,000/- each was imposed on both the respondents. 2. The facts of the case, are that Complaint was filed by the Assistant Director, Chenai Zonal Office, before the Adjudicating Authority. After going through the allegations, the Special Director issued Show Cause Notice to the Noticees' (herein respondents) for failing to realise the export remittance against 51 invoices of export to Dubai & Jamaica from August 2000 to December, 2000, to extent of Rs.12,41,89,927. On notic....

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....to realise the said remittance. 4. None appeared on behalf of the appellants for want of effective service in absence of their present whereabouts, and hence, both the respondents were proceeded against ex-parte. It is pertinent to mention here that none appeared on behalf of the appellants even during the adjudication proceedings and ex-parte order was passed against them. 5. After hearing the submissions on behalf of appellant ED, we have given our thoughtful consideration to the same. On reading of Section 13 (1) FEMA it is obvious that the maximum amount of penalty which can be imposed under the Section is three times the amount of contravention involved. From the language of the Section 13(1) FEMA, it is clear that the Section ha....

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....the State in the case supra conceded that the assessing authorities are not bound to levy fixed penalty equal to ten times the amount of entry tax. In fact, in the present case the statute (FEMA) itself provides for a penalty up to thrice the sum involved in such contravention and thereby gives explicit scope to the Adjudicating Authority to exercise his discretion, albeit judiciously, for imposition of penalty. 8. Now, after hearing the Ld. counsel for the appellant ED, we find the total penalty imposed on the appellants comes to 25 crores, which is about 200% more than the contravened amount. We fail to understand that instead of executing the said order for recovery, the appellant ED adopted the course of action for filing appeal for ....