TaxTMI 
TaxTMI 
2026 (2) TMI 187
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....UNISHWAR NATH BHANDARI For the Appellants : Mr. A. K. Panda and Mr. Mukeshwar N. Dubey, Advocate For the Respondent : Mr. Girish Tripathi, Advocate FINAL ORDER The batch of four appeals have been filed under Section 19 of Foreign Exchange Management Act, 1999 (in short 'the Act of 1999) to challenge the order passed by the Special Director (Appeals) dated 04.08.2022. The appeal was preferred to challenge the adjudication order dated 31.01.2022 where penalty was imposed on the appellant finding contravention of the provisions of the Act of 1999. The learned counsel for the appellant made brief facts of the case to show that the appellants were not involved in contravention of any of the provisions of the Act of 1999 yet penalt....
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....hange can only be done through authorized dealers authorized by the RBI. The appellant firm, M/s. KWB and Mr. Pravinbhai Ajudiya were not authorized by the RBI to set-off the transaction of USD 3,86,580/- amongst each other. If this had to happen without the permission of RBI, this would seriously create ruckus in the economy. Mis-management of foreign exchange can create serious volatility in the Indian economy. To prevent the same, FEMA, 1999 (42 of 1999) had been enacted and the regulation for the same was given to the RBI. The enforcement for the same is handled by the Directorate of Enforcement. The appellant firm has clearly violated the provisions of FEMA, 1999. Hence, the observation of the Ld. A.A regarding the issue of violation o....
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....other. In this process, they forge they were dealing with the foreign exchange, the realization of which bring foreign exchange to India and also the reporting of the same t proper channels would ease the work of RBI as well as the Directo Enforcement. By doing these complex transactions amongst themselves în turn violated the provisions of FEMA, 1999. The said transaction could only be done through the Authorised Dealers or prior permission had to be taken from the RBI. The non-compliance of the same in respect to FEMA, 1999 led the contravention of Section 3(b) of FEMA, 1999 which explicitly states the following:- 3. Dealing in foreign exchange, etc.-Save as otherwise provided in this Act, rules or regulations made thereund....
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....It is more so when in the custom case, appellants remained successful because CESTAT finally decided the matter in favour of the appellant finding no contravention of the Customs Act and therefore there was no reason for the Adjudicating Authority and thereupon the Special Director (Appeals) to pass the order imposing penalty. The challenge to the penalty amount even on M.s Chetan Gems Pvt. Ltd. so as its director Mr. Gopalbhai Shyamjibhai Thumar has been made alleging that M/s Chetan Gems Pvt. Ltd. was closed and therefore penalty on the aforesaid firm along with the penalty on a dummy director was not proper. The appeals were seriously contested by the counsel for the respondent and at the threshold referred to the contravention of ....
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..... Pravin Kumar Ratnabhai Ajudiya outside Indian and thereby aforesaid was taken to be contravention of the Act because it was without the approval of the RBI or was not routed through authorized dealer. I, however, find that in the custom case, the matter was decided in the favour of the appellant though it was in reference to the different sets of statutory provisions and accordingly reference of the allegation was also in pursuance to the Customs Act but fact remains that this matter is old by 14 years by now and otherwise appellants have already paid 50% of the penalty in pursuance to the order passed by this Tribunal on the application for waiver of condition of pre-deposit. The respondent could not recover penalty amount during the ....