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TaxTMI 
TaxTMI 
TaxTMI 
2026 (5) TMI 16
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....t Directorate, Ahmedabad (AA). Since, the contravention of Section 8 of Foreign Exchange Management Act, 1999 (FEMA) read with Regulation 3 of Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulation 2000 was found established, penalty of Rs. 50,00,000/- was imposed on M/s BSWL (earlier known as M/s Triveni Shinton International Ltd.). The aforementioned contravention in terms of Section 42 of FEMA led to imposition of penalty of Rs. 5,00,000/- each on Shri Ashok Kasliwal, Shri Girish Agrawal and Shri Shailesh Jain and penalty of Rs. 3,00,000/- on Shri Hiralal Bhansali. Since, Shri Hiralal Bhansali expired on 26.04.2013 the Appeal was filed by his legal heir and son Shri Mukesh Bhansali. This Tribunal vide Order dated 18.03.2025 directed the Appellant Company to make pre-deposit of Rs. 5,00,000/-, the three aforementioned individual Appellants to make pre-deposit of Rs. 1,00,000/- each and had directed completely waiver of the pre-deposit for the Appellant Shri Mukesh Bhansali. The said Order was complied with. 2. Ld. Counsel for the Appellants submitted that the Show Cause Notice (SCN) was issued on 17.03.2014 after a delay of almost ....
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....ed 26.12.2001 that the outstanding dues of M/s Nippon of US $ 25000 and US $ 35000 which they had to pay to M/s Nippon shall be paid to the Appellant Company. Ld. Counsel further stated that the Appellant Company made an application on 05.09.2005 with the Reserve Bank of India (RBI) for permission to write off outstanding export proceeds amounting to Rs. 1.8 Crores. Ld. Counsel pleaded that adjustments against outstanding amounts should have been made for US $ 60000 having been received from Samchira, for goods worth US $ 36,219.43, which were returned by M/s Asean, and for US $ 13,009, which was received as an advance. Ld. Counsel submitted that M/s Dena Bank vide certificate dated 27.07.2006 certified that Rs. 2.34 Crores, alleged outstanding export proceeds was included in one time settlement with Triveni. Ld. Counsel stated that the Appellant Shri Mukesh Bhansali is not liable for any penalty, since he is legal heir of Shri Hiralal Bhansali, who took over as Managing Director of the new management. It was in the year 2006 that the Appellant Company was taken over by the new management. Ld. Counsel argued that under such circumstances Late Sh. Hiralal Bhansali and his legal heir....
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.... are referring to 2.34 crores amount. Further, argument of new management that they are not responsible, can also not be considered, as company is a perpetual entity and this was responsibility was of new management also to recover pending export bills. Hence, I find that M/s. Triveni Shinton International Ltd. (Now known as Bhansali Stainless Wire Pvt. Ltd.)., Indore have failed to realize the export proceeds amounting to US $ 267042.14 (equivalent to Rs. 2,34,64,828/-) being the value of the goods exported. By this act of omission, they have contravened the provisions of Section 8 of the Foreign Exchange Management Act, 1999 read with Regulation 3 of the Foreign Exchange Management (Realization, Repatriation & Surrender of Foreign Exchange) Regulation, 2000. The only point I have to consider is as to what efforts were made by the past as well as present managements of the Noticee Company. Present management of the Company have tried to Show that they are not responsible as at the time of purchase of the Company, the dispute was settled with Dena Bank & they had made an MOU with the earlier management in this regard. The plea of the present management cannot be considered....
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....which has been taken by the Appellant Company is that the Dena Bank had issued a re-certificate on 07.08.2010 in relation to the one-time settlement entered with the Appellant for all outstanding dues of Triveni to Dena Bank. The said certificate stated to have set out that the outstanding export proceeds to the amount of approximately Rs. 2.34 Crores was included in the said one time settlement. It is to be noted that the RBI, Bhopal vide letter dated 31.08.2010 informed that according to Dena Bank outstanding export proceeds against the Company was Rs. 2,34,64,828/-. Even as late as 27.06.2012 RBI, Bhopal informed that write off proposal for the said outstanding export proceeds was under consideration for approval by their Central Office. We are therefore unable to hold that the outstanding export proceeds of Rs. 1.8 Crore had either been settled by Dena Bank or written off by the RBI. 9. The Appellant Company and the individual Appellant Shri Ashok Kasliwal have taken the plea that they had taken more than reasonable steps to realise and repatriate the outstanding export proceeds. The arguments made in this regard is that the erstwhile Appellant Company M/s Triveni became a s....
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....ain have pleaded that they were not involved in the day-to-day affairs of the Company and also, they were in no manner responsible for the export transactions. We also find no evidence as to hold them liable for penalty for the contravention of Section 8 read with the Regulations thereunder in terms of Section 42 of FEMA. We therefore set aside the penalty amounts of Rs. 5,00,000/- each imposed on them under the Impugned Order. Pre-deposit of the penalty amount already made shall be refunded to the two individual Appellants. 13. We find that the individual Appellant Shri Ashok Kasliwal has admitted being the promoter and the Managing Director of Triveni from its inception till around 2006. He was regularly concerned the running of the Company and conducted its business. He was also in full knowledge of the efforts which were made to realise the outstanding export proceeds. Since, we have found that the Appellant Company is in contravention of Section 8 of FEMA read with Regulation 3 of Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulation 2000, we hold the individual Appellant Shri Ashok Kasliwal to be liable for penalty. 14. Loo....