Home List Manuals FEMAFEMA Ready ReckonerCompounding Offences This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
Compounding of Offences [ Section 15 ] - FEMA Ready Reckoner - FEMAExtract Compounding of Offences Compounding Authority [ Section 15(1) ] Person authorized by central government under section 15 i.e. classed of officers of the Enforcement Directorate and class of officers of the RBI can act as Compounding Authority. The compounding of any contravention under section 13 may be made in the manner provided in the Rules made under section 15. In terms of the said Rules, the compounding of contraventions has been administratively divided in two classes: Compounding by the Reserve bank of India Compounding by the Enforcement Directorate Time Limit for Compounding : Any contravention under section 13 may, be compounded within 180 days from the date of receipt of application by the relevant officer of the Directorate of Enforcement or the Reserve bank of India. As per Rule 4 of Foreign Exchange (Compounding Proceeding) Rules 2000 , deals with the power of the Reserve Bank to compound contraventions as follows Jurisdiction of the Reserve Bank's Officer No contravention shall be compounded unless the amount involved in such contravention is quantifiable. Depending on the amount involved in the contravention, the jurisdiction of the officers of the Reserve Bank has been fixed by Rule 4(1) as follows: Sum Involved in Contravention Jurisdiction of the Reserve Bank's officer Upto 10 Lakhs Assistant General Manager More than 10 Lakhs but upto 40 Lakhs Deputy General Manager More than 40 Lakhs but upto 100 lakhs General Manager Above 100 Lakhs Chief General Manager Second or subsequent contravention committed [ Rule 4(2) ] Nothing contained in section 15(1) shall apply to a contravention committed by any person within a period of three years from the date on which a similar contravention committed by him was compounded under these rules. Compute the time period for Second or subsequent contravention committed Any second or subsequent contravention committed after the expiry of a period of three years from the date on which the contravention was previously compounded shall be deemed to be a first contravention. Application form and fees [ Rule 4(4) ] Every application for compounding any contravention under this rule shall be made in Form to the Reserve Bank of India, Exchange Control Department, Central Office, Mumbai along with a fee of Rs. 5000/- by Demand Draft in favour of compounding authority. As per Rule 5 of Foreign Exchange (Compounding Proceeding) Rules 2000 , deals with the power of the Enforcement Directorate to compound contraventions as follows : Jurisdiction of the Enforcement Directorate Officer No contravention shall be compounded unless the amount involved in such contravention is quantifiable. Depending on the amount involved in the contravention, the jurisdiction of the officers of the Enforcement Directorate has been fixed by Rule 5(1) as follows: Sum Involved in Contravention Jurisdiction of the Enforcement Directorate officer Upto 5 Lakhs Deputy Director More than 5 Lakhs but upto 10 Lakhs Additional Director More than 10 Lakhs but upto 50 lakhs Special Director More than 50 Lakhs but upto 100 Lakhs Special Director with Deputy Legal Adviser Above 100 Lakhs the Director of Enforcement with Special Director Second or subsequent contravention committed [ Rule 5(2) ] Nothing contained in section 15(1) shall apply to a contravention committed by any person within a period of three years from the date on which a similar contravention committed by him was compounded under these rules. Compute the time period for Second or subsequent contravention committed Any second or subsequent contravention committed after the expiry of a period of three years from the date on which the contravention was previously compounded shall be deemed to be a first contravention. Application form and fees [ Rule 5(4) ] Every application for compounding any contravention under this rule shall be made in Form to the Director, Directorate of Enforcement, New Delhi, along with a fee of Rs.5000/- by DD in favour of the Compounding Authority Procedure for Compounding [ Rule 8 ] For the purpose of compounding, the compounding authority is authorised by Rule 8(1) to call for any information, records or any other documents relevant to the compounding proceedings. In terms of rule 8(2) in terms of, the compounding authority is required to afford an opportunity of hearing to all concerned as expeditiously as possible and not latter than 180 days from the date of the application. Only thereafter, the Compounding Authority shall pass the order of compounding Any proceeding initiated under rule 4 , if the Enforcement Directorate is of the view that the said proceeding relates to a serious contravention suspected of money laundering, terror financing or affecting sovereignty and integrity of the nation, the Compounding Authority shall not proceed with the matter and shall remit the case to the appropriate Adjudicating Authority for adjudicating contravention under section 13 . In case of Compounding, no proceeding may be initiated [ Section 15(2) ] Where a contravention has been compounded under section 15(1) , no proceeding or further proceeding, as the case may be, shall be initiated or continued, as the case may be, against the person committing such contravention under that section, in respect of the contravention so compounded. Rule 6 provides that where any contravention is compounded before its adjudication under section 16 , no inquiry shall be held for adjustment of such contravention against the person in relation to whom the contravention is so compounded. Compounding Authority to notify adjudicating authority Rule 7 provides that where the compounding of any contravention is made after making a complaint under section 16(3) , such compounding shall be brought by compounding authority in writing to the notice of the adjudicating authority. In the said rule, it is also provided that upon such notice of compounding being given the person in relation to whom the contravention is compounded shall be discharged. Compounding Amount Rule 9,10,11 and 12 deal with the following aspect of the compounding amount Payment amount In terms of Rule 9 , the sum for which the contravention has been compounded under rule 8(2) the sum involved in such contravention shall be deposited within fifteen days from the date of the order of compounding of such contravention by demand draft in favour of the Compounding Authority. Failure to pay the compounded amount In terms of Rule 10 , In case a person fails to pay the sum compounded in accordance with the rule 9 within the time specified in that rule, he shall be deemed to have never made an application for compounding of any contravention under these rules and the provisions of the Act for contravention shall apply to him. Bar on compounding In terms of Rule 11 , The contravention cannot be compounded if an appeal has been filed under section 17 or section 19 of the Act. Thus, where appeal is not filed against the order of adjudication, such adjudication Contravention may be compounded. Contents of the order of the Compounding Authority - In terms of Rule 12 (1) Every order shall specify the provisions of the Act or of the rules, directions, requisitions or orders made thereunder in respect of which contravention has taken place alongwith details of the alleged contravention. (2) Every such order shall be dated and signed by the Compounding Authority under his seal. Delegation of power to Regional offices of RBI Compounding powers have been delegated to the Regional office of the reserve bank of India to compound the some contravention. Compounding powers have been delegated to the Regional Offices of the Reserve Bank of India to compound the some contravention as per RBI A.P. (DIR Series) Circular No. 06 dated 17-11-2020 .
|