TaxTMI 
TaxTMI 
2024 (6) TMI 1573
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.... Rs. 50,00,000/- on each of the four Appellants Shri Ashok K. Desai, Shri Sam Edward Laub, Shri John C. Metacalfe and Shri Steve Cakebread. The charge against the Appellant M/s Silicon Graphics Systems (P) Ltd for contravention of Section 8(3) and Section 8(4) of Foreign Exchange Regulation Act 1973 (FERA) r/w Chapter 7 (A), 20 (i) of the Exchange Control Manual, 1995 (ECM) has been held as established. The charge against the remaining four Appellants for the contravention of the aforementioned provisions r/w Section 68(1) of FERA has been held as established. The charges were invoked against the Appellant M/s Silicon Graphics Systems (P) Ltd for having failed to submit Exchange Control Copy of Bill of Entry as confirmation of having imported material for which US $ 7,67,983.46 was remitted through Citibank, Sansad Marg, New Delhi (Authorized Dealer) during the years 1995, 1996 and 1997. During the relevant period the remaining four Appellants were allegedly in-charge of and responsible to the said company for the conduct of the day-to-day business of the company. 2. This Tribunal issued Order dated 18.11.2015 whereby the application for waiver from pre-deposit of penalty was di....
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.... dated 25.09.2003 obtained from Citibank were behind the back of the Appellants and the Appellants were not even confronted with the clarification/confirmations. They were not given the opportunity to cross-examine the officials of the Citibank. Hence, there was violation of principles of natural justice and the adjudication proceedings were barred by the doctrine of audi alteram partem. 4. Ld. Counsel for the Appellants stated that the entire burden of obtaining the Exchange Control Copy of the Bill of Entry from the Appellants and then furnishing it to the RBI was that of the Citibank, the Authorized Dealer (AD). The provisions of Chapter 7 A 20 of ECM has cast responsibilities on the AD which the Citibank failed to discharge. He alleged that the Respondent Enforcement Directorate was in connivance with the Citibank in giving clean chit to the AD and in obtaining letter dated 23.09.2002 at their back. He stated that in any case the ECM requires even the Citibank to preserve Exchange Control Copies of the Bills of Entry for a period of one year only from the date of its verification. He contended that the secondary evidence produced by the Appellants in the form of the affidavi....
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....t the Appellants have furnished the details relating to 2 Bills of Entry on pages 33 and 34 of the Appeal paperbook. The Citibank had on 18.06.2002 informed the Appellant Company that the Bill details relating to the Original Exchange Control Copy furnished by them on 03.07.2002 did not match the Bill details referred by the Citibank. He further argued even though the documents dated 24.04.1995 at page 33 and 34 of the Appeal paperbook show transfer amount of US $ 12,347 which relates to the Bill of Entry amount listed at Serial No. 9 of the list enclosed with the letter dated 18.06.2002, the beneficiary shown in the documents is Cabletron Systems Pte Ltd. which is different from the parent company from whom the Appellants claimed to have imported the goods. Ld. Counsel for the Respondent therefore pleaded that the Appeals may be dismissed. 7. We have considered the rival submissions and carefully examined the material on record. We find that the Appellant company remitted foreign exchange US $ 7,67,983.46 through the AD during the years 1995, 1996 and 1997. The Respondent Directorate asked for information relating to the said remittances vide letters no. T-3/BE/595/DZ/676/99/JS....
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....n 18.08.2003 the Appellants submitted that they had furnished the Exchange Control Copies of the Bills of Entry to the AD. Further, the four Directors of the company, who are Appellants herein, were no longer employed with the Appellant Company hence they should be discharged from the present proceedings. It is observed that vide letter dated 30.05.2002 the Appellants had given the names of the Directors of the company at the time of remittance during the period 1995- 1997 and hence it is surprising that the argument is being made at subsequent stage to drop the charges against them as at that stage the four Directors ceased to be the employees of the Appellant company. In this regard, the provisions of Section 68(1) of FERA leave no scope for doing so, as is obvious from the provisions below: 68(1) Offences By companies- Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time of the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business of the company as well as the company, shall be deemed to be guil....
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....10) through whom related remittance was made as evidence that the goods for which the payment was made have actually been imported into India. It is for the purpose for ensuring that the foreign exchange so acquired is utilized as per declaration and the goods which get imported against such foreign exchange remittance are the same as the goods of value, kind, quality or quantity which are not different from that specified by him at the time of acquisition of the foreign exchange. To meet such rigors that submission of Exchange Control Copy of the Bills of Entry has been made obligatory. The Affidavit and the Certificate fail to meet the requirements of law. The details therein were not sufficient as to serve the objectives of Section 8(4) of FERA to ensure that the same goods have been imported for which the declaration had been made to the AD while releasing the foreign exchange. Therefore, the plea of the Appellants that non-submission of Exchange Control Copy of the Bills of Entry is merely a technical breach cannot stand. The Hon'ble High Court of Calcutta in the judgment dated 17.09.2008 in the case of Suborno Bose vs. Appellate Tribunal for Foreign Exchange and Ors. [MANU....
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....etailed clarification /confirmation from Citibank and the Bank in their letter dated 25.09.2003 confirmed the status of 12 Bills of Entry as follows: Sl. No. Amount in USD Date B/E Sl. No. of SCN 1. 5,17,19.00 13.09.1996 Part B/E for USD 5248.50 received Sl. No. 1 of SCN 2. 77,840.00 11.10.1996 B/E received Sl. No. 2 of SCN 3. 32,925.00 11.10.1996 Part B/E for USD 2405 received Sl. No. 3 of SCN 4. 16,683.70 11.10.1996 B/E not received Sl. No. 4 of SCN 5. 22,634.71 11.10.1996 B/E not received Sl. No. 5 of SCN 6. 14,628.00 11.10.1996 B/E not received Sl. No. 6 of SCN 7. 12,746.00 11.10.1996 B/E not received Sl. No. 7 of SCN 8. 9,067.00 07.01.1997 B/E not received Sl. No. 8 of SCN 9. 12,347.00 24.04.1995 B/E not received Sl. No. 9 of SCN 10. 9,500.00 22.09.1995 B/E not received Sl. No. 10 of SCN 11. 30,836.05 04.10.1995 B/E not received Sl. No. 11 of SCN 12. 11,586.00 07.10.1997 B/E not received Sl. No. 12 of SCN TOTA L 7,67,983 BALANCE 6,82,499 12. At the Appeal....