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2017 (11) TMI 618

Head Note:
Non-realisation of export sale proceeds - Proceedings as contemplated under Section 18(2) & 18(3) read with Section 68(1) & 68(2) of FERA - Held that:- It is evident that the Appellant joined as Director solely in the capacity of advisory role and was specifically excluded from the day to day operations of the company as evidenced from the correspondence. There cannot be any adverse inference against the Appellant‟s role as to its involvement in the exports or realization of the proceeds. Unless country is established particularly when Noticee No. 14‟s being not above suspicion has been given the benefit and no penalty imposed upon him. Rule of equality would apply in this matter. Discrimination of the department cannot be accepted.

The impugned order deals with the violations committed by the persons in charge of MVR Group of companies. The Appellant was neither part of the management managing the affairs of the MVR group of companies nor was he in any way concerned with the company. This fact has been clearly acknowledged by the Adjudicating Authority while passing the impugned order. Yet the Adjudicating Authority chooses to impose the penalty on the Appellant. Having found nothing against the Appellant, the Adjudicating Authority ought not to have imposed the penalty.

In the impugned order the Adjudicating Authority found nothing against the Appellant, however, the Special Director observes erroneously that the Appellant ought to have exercised due diligence in knowing the details of the company and his responsibilities which he failed to do so and thereby rendered himself responsible to the non-realisation of export sale proceeds and thus contravened the provisions of Section 18(2) & 18(3) of FERA.The impugned order suffers from legal infirmities and the same is liable to be set aside.


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