TaxTMI 
TaxTMI 
2026 (7) TMI 657
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.... FPA-FE-13/CHN/2021 filed by Shri Ashraf Abdul Rahman Buhari (Director), against the Order No. ADE/SRO/CEZO-I/21/2020 dated 15.12.2020 (Impugned Order), passed by the Additional Director, Enforcement Directorate, Government of India, Chennai. The Ld. Adjudicating Authority (AA) imposed penalty of Rs. 17,00,000/- Rs. 8,20,00,000/- and Rs. 34,00,000/- on the Appellant Company M/s. ETA Power Gen Pvt. Ltd. for the contraventions of Section 6(3)(b) of the Foreign Exchange Management Act, 1999 (FEMA), read with Regulations 5 (1) of the Foreign Exchange Management (Transfer or Issue of Security by a person Resident Outside India) Regulations, 2000 in terms of Paragraphs 9 (1) (A), 8 and 9 (1) (B) respectively of Schedule-I to the said Regulations to the extent of contraventions of amount of Rs. 16,29,90,000/-. Penalty of Rs. 50,00,000/- each was imposed on Shri Abdul Qadir, Shri Sathak Ansari, Shri Khalid Abdul Khader Buhari and Shri Ashraf Abdul Rahman Buhari, vide the Impugned Order, for the aforementioned contraventions in terms of Section 42 of FEMA. 2. Ld. Counsel for the Appellants submitted that the Appellant Company had always been a law-abiding Company and it never had any int....
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....t upon the resignation of Shri T C Ravindran as is evident from the Resolution passed in the Board Meeting held on 23.11.2012 which was filed with the Registrar of Company. Ld. Counsel challenged the veracity of the statement of Shri T C Ravindran. Ld. Counsel alleged that the Ld. AA did not consider the Resolution passed in the Board Meeting held on 23.11.2012. In this regard, Ld. Counsel referred to the Judgment dated 27.07.2020 of the Hon'ble Supreme Court in the case of Shailendra Swarup vs. Deputy Director (MANU/SC/0544/2020). The Judgment held that for proceeding against the Director of a Company for contravention of provisions of FERA 1973 the necessary ingredient for proceeding shall be that at the time offence was committed, the Director was In-Charge of and was responsible to the Company for the conduct of the Business of the Company. The liability to be proceeded with for offence under Section 68 of FERA 1973 depends on the role one plays in the affairs of the Company and not on mere designation or status. Ld. Counsel also cited the Judgment of Hon'ble Bombay High Court in Shashank Vyankatesh Manohar vs. Union of India, (MANU/MH/ 1132/2013) whereby it was held that if th....
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....hey attempted to file with RBI, however due to non-availability of FIRC for Rs. 5.25 crore out of Rs. 16.29 crore FDIs, RBI did not take on record their application. Ld. Counsel for the Respondent further submitted that for four remittances dated 28.01.2005, 28.01.2005, 17.03.2006 and 27.09.2006 no report was filed and thus the delay as counted up to the date of filing Complaint under Section 16(3) of FEMA varied from 15 years, 2 days to 13 years, 4 months, 3 days. For rest of the 11 remittances while the reporting was done yet with delay ranging from 6 years, 5 months, 3 days to 4 years, 11 days. Ld. Counsel further stated that the date of allotment of shares with respect to all 14 tranches of remittances was 31.03.2012 with delay ranging from 7 years, 2 months, 3 days to 2 years, 11 months, 16 days. Ld. Counsel stated that for none of the 14 remittances FCGPR was filed. 6. Ld. Counsel for the Respondent submitted that the Ld. AA has confirmed the aforementioned facts in his findings made in the Impugned Order in paragraphs 6.3, 6.4 and 6.5 as follows: "6.3. I find that there are delays in reporting the advance remittances received by M/s. ETA Power Gen Private Limited....
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....s under FEMA, 1999 are not criminal/quasi criminal. Also, I am of the view that the contraventions committed by Noticee No. 1 are substantial breaches and therefore Noticee No. 1 is liable for imposition of penalty under Section 13(1) of FEMA, 1999 " 8. Ld. Counsel for the Appellant argued that the statement of Shri T C Ravindran tendered voluntarily on 07.01.2020 under Section 37 of FEMA is admissible as evidence. Shri Ravindran had clarified that he joined the Appellant Company as Executive Director in 2006, and the Promoter Directors took care of all formalities regarding share allotment and other regulatory formality of FDI. Shri Ravindran stated that he was only responsible for the execution of the project activities on technical site and he did not attend the Board Meetings. He specified that Shri Abdul Qadir, Shri Ashraf Abdul Rahman Buhari, Shri Khalid Abdul Khader Buhari and Shri Sathak Ansari were the Promoter Directors/ Shareholders who took care of the business relating to FDI. Ld. Counsel stated that after due consideration of the said statement as well as of other facts, the Ld. AA rejected the contentions of the individual Appellants. Ld. Counsel therefore pleaded....
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....e find that Paragraph 2 of the said Circular states the following: "The above provisions shall come into effect immediately for the delayed filing made on or after the date of this circular." We observe that the remittances had been made in 14 tranches beginning from 28.01.2005 and ending on 15.04.2009. The Circular is dated 30.09.2022. We do not find that the Circular is applicable to the facts and the circumstances of the present case. 11. Ld. Counsel for the Appellants has pleaded that the individual Appellants have contended that it is with effect from the date of the Board Meeting held on 23.11.2012 that each one of them had become the Whole Time/Executive Director consequent upon the resignation of Shri T C Ravindran. We find that it is on record that Shri Ravindran in his statement dated 07.01.2020 under Section 37 of FEMA, which is admissible as evidence, categorically stated that he was neither a Promoter Director nor a Shareholder. He had also stated that the four individual Appellant were responsible for all formalities regarding share allotment and its regulatory requirements. We also find necessary corroboration of these facts in the statement dated 05.1....