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2020 (1) TMI 544 - AT - FEMAContravention of FEMA - Investment in three step-down subsidiaries through Wholly Owned Subsidiary (WOS) without the permission of the RBI - Penalty imposed - HELD THAT:- As provided that if any person contravened any provision of this act or contravened any rules, regulation, notification, direction or order issued in exercise of the powers under this Act be liable to penalty upto thrice the sum involved in such contravention where such amount is quantifiable. In the present case the sum involved are quantifiable. During the course of argument the learned counsel for the appellants submitted, on query by the Bench, submitted that more than six crores of INR were invested in the step-down subsidiaries. If it is so the imposition of ₹ 70 lakhs on the appellant company and ₹ 20 lakhs on the Managing Director is not disproportionate. In my view the Adjudicating Authority has taken a lenient view and has imposed penalty lessor than the proportionate penalty. In the present fact and circumstances of the case the judgments stated by the appellant is not helpful to the case of the appellant. There is no illegality in the impugned order passed by the Special Director, (Appeals).There are contravention of the provisions of section 6(3)(a) of the FEMA and Regulations 5, 6 & 13. The Adjudicating Authority has also rightly held that Mr. Taurani has violated the aforesaid provisions in terms of Section 42(1) of FEMA.
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