1999 (8) TMI 1026 - AT - FEMA

Summary

Issues:
1. Penalty imposition under the Foreign Exchange Regulation Act, 1973 for non-realization of export proceeds.
2. Contravention of section 18(2) and section 18(3) of the Act.
3. Applicability of section 68(1) regarding liability of individuals in charge of a company for contraventions.
4. Dispensation from pre-deposit of penalty.
5. Merits of appeals and payment of penalties in instalments.

Analysis:

1. The judgment involves appeals against a common Adjudication Order imposing penalties for non-realization of export proceeds under the Foreign Exchange Regulation Act, 1973. The penalties were imposed on the appellant in different capacities related to a company, Modula India.

2. Show-cause notices were issued to the company and the appellant, alleging contravention of section 18(2) and section 18(3) for non-realization of export proceeds. Written replies were submitted, followed by personal hearings before the adjudicating authority passed the impugned order.

3. The counsel for the appellants argued that the company's guilt must be established before holding the individual director liable under section 68(1) of the Act. The judgment emphasized that the person in charge of the company can only be held guilty if the company itself is found to be in contravention.

4. Regarding dispensation from pre-deposit of the penalty, the appellants' advanced age and business cessation were considered. The judgment granted dispensation from pre-deposit of the remaining penalty amount in both cases due to the appellants' circumstances.

5. In Appeal No. 220 of 1992, the adjudicating authority found the appellant guilty in his capacity as director without holding the exporter-company guilty. The judgment set aside the impugned order, emphasizing that the individual cannot be held guilty if the company's guilt is not established.

6. In Appeal No. 221 of 1992, the legality of the impugned order was upheld as the appellant failed to provide evidence to challenge it. The request for payment of the penalty in instalments was declined due to the appellant's failure to deposit further instalments after an initial payment.

7. The judgment dismissed Appeal No. 221 of 1992 and directed the appellant to pay the remaining penalty amount within a specified period, failing which the respondent would be entitled to recover it in accordance with the law.