TaxTMI 
TaxTMI 
2026 (5) TMI 379
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....ernment of India, Hyderabad Zonal Office. Penalty of Rs. 3,56,00,000/- was imposed on M/s Powertex Tools Company Pvt. Ltd. and penalty of Rs. 16,05,852/- on M/s M. L. Tools Industries for contravention of Section 3(b) of the Foreign Exchange Management Act, 1999 (FEMA). Penalty of Rs. 3,56,00,000/- was imposed on Sh. Laxmi Narayan Gupta, the Managing Director of M/s Powertex Tools Company Pvt. Ltd. for the aforementioned contravention read with Section 42 of FEMA. The amounts of contravention was Rs. 7,15,19,867/- with respect to M/s PTCL, and Rs. 16,05,852/- with respect to M/s MLTI. This Tribunal vide Order dated 07.10.2024 directed the Appellants to make pre-deposit of penalty of the amounts Rs. 1,40,00,000/- Rs. 6,50,000/- and Rs. 1,40,00,000/- M/s PTCL, M/s MLTI and Shri Laxmi Narayan Gupta respectively. The pre-deposit Order has been complied with. 2. Ld. Counsel for the Appellant submitted that at the time of import, goods were cleared after due physical examination and due scrutiny of import documents. No discrepancy was found then. Ld. Counsel alleged that the statement of the Appellant was taken under threat and coercion. The statements were tendered at the dictates of....
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....t the remaining amount was evaded. The payments against the declared values were sent through banking channels. The undervalued amounts were sent in cash through the suppliers' representatives in India. All major Chinese suppliers had their representatives in India and these agents collected the differential values in cash through different persons. The differential payments were handed over to these agents in cash and these agents sent these payments to the Chinese suppliers. Shri Gupta had admitted to having resorted to under-valuation in the imports because of tough competition in the market as most of the importers were doing undervaluation. Regarding present position of the SCN issued by DRI, Shri Laxmi Narayan Gupta stated that, after issuance of the SCN by DRI for recovery of Customs Duty, total Customs liability to Govt. was paid by him and that he approached Hon'ble Settlement Commission for settlement of case and for further immunity from prosecution. Regarding payment of the differential value of Rs. 7,31,25,719 to the overseas suppliers, Shri Laxmi Narayan Gupta stated that, the said differential values were paid to the Suppliers through their local representati....
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.... judicial proceeding therefore attaches to the statement made under the Customs Act to the DRI. Therefore there is no prohibition in relying upon statements made under the Customs Act 1962 for the purposes of the adjudication proceeding under the FEMA, more so when reliance is placed upon documents to the complaint made to the Adjudicating Authority. 22. Section 3(b) provides that no person shall make any payment to or for the credit of any person resident outside India in any manner. In the present case, there is a complete absence of any legitimate consideration, such as the supply of goods against which an inward remittance as high as Rs. 75.39 crores was received. Hence, the only possible inference that would arise is that the inward remittance of Rs. 75.39 crores was matched by a hawala transaction involving transactions through a person resident outside India. Similarly, under Section 3(d), no person shall enter into any financial transaction in India as consideration for or in association with the acquisition or creation or transfer of a right to acquire any asset outside India. Money is a form of assets. The acquisition of money outside India is the acquisition of ....
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....of this order, the Bonds and Bank Guarantees executed at the time of provisional release of the seized goods shall stand discharged and be returned to the applicants in accordance with law. 22.6 Prosecution: Subject to payment of duty, interest, fine and penalty within 30 days of receipt of this order, the Bench grants immunity to the applicants and the co-applicant from prosecution under the Act and Rules framed there under as applicable in so far as this case is concerned. 23. The above immunities to the applicants and co-applicant are granted under sub section (1) of Section 127H of the Act. Attention of the applicants is also drawn to the provisions of Sub Sections (2) and (3) of Section 127H: "(2) An immunity granted to a person under sub-Section (1) shall stand withdrawn if such person fails to pay any sum specified in the order of the settlement passed under "sub-Section (5) of Section 127(C) within the time specified in such order or fails to comply with any other condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted. (3) An immunity granted to a p....
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....red during the course of investigation. On perusal of the records in the present case, it is obvious that detailed investigation has been conducted not only under one Act and by one Agency, but investigation entailed by the statutory provisions of the other Act has also corroborated the incriminating details. It is also pertinent to cite the following Judgments, so as to demonstrate that mere retraction cannot lead to the rejection of the statements voluntarily tendered under various statutes, which have provisions to hold such statements admissible. The Hon'ble Supreme Court in the case of Vinod Solanki Vs Union of India [(2008) 16 SCC 537] has laid down the situations where the retracted statement of the Appellant can be relied upon. In the Judgement (Supra) following has been observed in paragraph 23: "23. It is trite law that evidence brought on record by way of confession which stood retracted must be substantially corroborated by other independent and cogent evidence, which would lend adequate assurance to the court that it may seek to rely thereupon. We are not oblivious of some decisions of this Court wherein reliance has been placed for supporting such contention ....