Home Case Index All Cases FEMA FEMA + AT FEMA - 2019 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (3) TMI 1517 - AT - FEMAViolation of S.18 of the FERA - non-recovery of the export proceeds relating to various items of exports made to Iraq, USSR etc. - waiver applications pending - penalty imposed on the Appellant Company for the alleged violation - personal penalty on directors - Held that:- No penalty could be imposed in respect of outstanding recovery from Iraq for which extension of time had already been granted and the extended time was not yet over. No penalty could also have been imposed for outstanding amounts from other 5 countries in respect of which waiver application was pending. The appeal filed in the appellant-Hindustan Lever Ltd. is allowed in the light of above said facts. Personal penalty on directors - As mentioned a penalty of ₹ 25 Lakhs was also imposed in respect of each of the 3 Directors - NO PENALTY COULD BE IMPOSED ON THE DIRECTORS The penalty of ₹ 25 Lakhs each imposed in respect of the 3 Directors are also liable to be set aside. Firstly, the appellants have filed an affidavit in this regard. In para 5 of the said Affidavit, at pg. 4 it is clarified that the 3 Directors were not in-charge of Exports. Mr. Buckle the 3rd Director was not even a Director during the relevant period. (He took charge of the office with effect from 1.1.93 when the exports are within the period 1982 to 1991.) (See para 3(i) at pg. 2 of the said affidavit). The details regarding the other two Directors are also set out in the said Affidavit. In the Show Cause Notice dated 25.11.1993 only the names of the aforesaid 3 Directors are mentioned. Their names are included only on account they being Directors. No further allegation or statement is made as to ‘how’ they were in-charge and were responsible to the Company for the conduct of business of the Company in relation to such exports and the recovery of the amounts in relation thereto, as contemplated under Section 68. It is settled law that mere repetition of the language of the Section in the Show Cause Notice is not enough. Unless it is specifically stated as to how the said Directors are responsible and in-charge of, as contemplated in Section 68. In the light of settled law, the impugned order with regard to penalty imposed to three directors is also set-aside. Appeal allowed.
|