GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (2) TMI 480 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE NEW DELHI

2016 (2) TMI 480 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI - 2015 (328) E.L.T. 117 (ATFE) - Levy of penalty for Non realization of export proceeds (foreign exchange) within six months of the date of shipment or within the extended period - Held that:- Considering the submission that almost entire sale proceeds have been realized and loss to the exchequer has subsequently been made good therefore, taking a holistic view, we are of the opinion that it will be just and fair in the circum .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

:- 17-7-2015 - Vinay Kumar Mathur, Chairperson and Ms. Sharda Jain, Member Ms. Pooja Saigal, Advocate, for the Appellant. Shri Rahul Meena, Legal Consultant, for the Respondent. ORDER We have heard Ms. Pooja Saigal, Advocate, for the appellants and Mr. Rahul Meena, Legal Consultant for the respondents and have also perused the record. 1. Brief facts relevant for the disposal of the instant appeals are that Appeal No. 519/1993 has been filed by appellant M.L. Gupta, Karta of M/s. Kanta Inter .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion 18(2) of Foreign Exchange Regulation Act, 1973 (hereinafter called FERA, 1973) r/w Central Government Notification dated 1-1-1974 has been made. Show cause notice was issued to M/s. Kanta International and M.L. Gupta, Karta of the firm. However, no reply was received for quite some time. Therefore, adjudication proceedings were initiated. Several, dates for personal hearing were also fixed. Ultimately Shri J.S. Arora, Advocate, appeared for M/s. Kanta International in response and submitted .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rejected. He also observed that the firm had not approached the Indian Embassy, Chamber of Commerce and Attorneys abroad in an effort to realize outstanding export proceeds. He recorded his dissatisfaction that the exporter had not made any efforts worth the name to pressurize the buyer to remit the export proceeds and held appellant M.L. Gupta, Karta of M/s. Kanta International liable for contravention of Section 18(2) r/w Section 18(3) of FERA, 1973 and imposed a penalty of ₹ 25,00,000/ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

failed to realize entire export proceeds for the said shipment. Contravention of the provisions of Section 18(2), 18(3) r/w Central Government Notification No. F.I.67/EC/73-1 & 3 both, dated 1-1-1974 have been alleged. Sh. M.L. Gupta, Smt. Rajkarni and Smt. Sarla Agarwal were partners in the firm during the relevant period and were allegedly incharge and responsible for the conduct of the business. Show cause notice was issued. However, no reply thereby was filed for a period of almost five .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of ₹ 10,00,000/- upon M/s. Sandeep Traders and also a penalty of ₹ 5,00,000/- upon M.L. Gupta, partner, vide the impugned order. The impugned order has been challenged through the instant appeal by M/s. Sandeep Traders while Appeal No. 521/1993 has been filed by the appellant M.L. Gupta, partner of M/s. Sandeep Traders against the same impugned order. In the instant appeal, the appellant has challenged imposition of penalty of ₹ 5,00,000/- against him for having contravened pr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ral Government Notification and Section 68(1) of FERA, 1973. The allegations were that in the year 1984 the firm effected Shipment of goods valued at ₹ 28,88,662/- and US $ 738.50 and failed to realize & repatriate the sale proceeds within the prescribed period. The Adjudicating Authority found the efforts made for realization to be inadequate. 4. Appeal No. 523/1993 has been filed by the appellant M.L. Gupta, Director M/s. M.L. Gupta & Sons (P) Ltd., against the Adjudication .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

filed by Mr. M.L. Gupta, Karta of M/s. Kanta International challenging Adjudication Order No. SDE(R)III/6/93, dated 30-6-1993. It is alleged that in July, 1984 appellant instructed P. Gangaram and C. Gangaram persons resident of outside India to arrange Foreign Exchange of Pound 20,000/- in Dubai for M/s. Kanta International in lieu of payment of ₹ 3,20,000/-. The amount of Pound 20,000/- was subsequently remitted to SBI Overseas Branch, New Delhi. Appellant has been held guilty of contrav .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ation and repatriation of export proceeds. The allegations are that in the year 1984, the firm had affected shipment of goods worth ₹ 26,01,005.00 and US $ 991.05 under GRI forms but had failed to realize the export proceeds within the prescribed period. 7. Since all the appeals have been filed against adjudication orders which relate to firms in which the appellant M.L. Gupta or Mrs. Manjari Gupta were partners and contraventions of similar nature have been alleged against them, and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

judgment dictated by the Hon ble Chairperson could not be pronounced as the Hon ble Member did not sign the order. In this view, there was no valid adjudication in the instant appeals which were subsequently placed before this Bench on 19-8-2014 on which date in view of the fact that the draft judgment dated 13-1-2011 could not be pronounced by the Bench, appeals were ordered to be reheard. 9. Ms. Pooja Saigal, ld. Counsel for the appellants has submitted that various adjudication orders we .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

xport realization has been annexed as Annexure A.1 along with certificates issued by the concerned authorized dealers (Banks) affirming that the export proceeds have been realized and GR forms released in respect of all the shipments except in respect of certain shipments of small amounts. Further submission is that the State Bank has been unable to trace the records to release GR forms and in such cases the appellants have placed the original FIRs. Submission is that the very basis upon which t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

peals in view of the affidavits by the appellants therein filed in March, 2010 along with the proof of realization were duly considered by this Tribunal and an order was dictated by then Hon ble Chairperson for remand of all the appeals for fresh consideration by the Adjudicating Authority. However, the Hon ble Member did not put his signature on the draft judgment nor passed any independent order of dissent or recorded his disagreement formally. However, technically the draft judgment could not .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d are excessive and arbitrary. The only requirement and obligation against the appellants was to make bona fide efforts for realization of the entire export proceeds. Genuine and bona fide efforts were made by the appellants as a result of which they have succeeded in realization of the export proceeds. Consequently all the impugned orders in which efforts made by the appellants were not duly taken note of, and prima facie appear to have been passed with a prejudice are liable to be set aside. N .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to those circumstances also no effective representation could be made in the adjudication proceedings. The impugned orders are ex parte and against principles of natural justice and were not fair. No financial loss has been caused to exchequer of the country and the appeals deserve to be allowed. 11. Ld. Legal Consultant has defended the impugned orders and has submitted that the appellants have failed to realize the sale proceeds of goods exported within the stipulated period in contraven .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

so made applications to the RBI for extending the time for realization of the export proceeds. The Adjudicating Authority rightly held that the correspondence was ex parte and had not been made with all the buyers. No effort to contact Indian Embassy, Chamber of Commerce or legal proceedings were initiated against the buyers. The authorized dealers also informed the appellants that their request for extension of time limit relating to GR forms have been rejected. Thus, the Adjudicating Authority .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s from the transactions, cannot be considered as genuine and bona fide efforts, within the meaning of FERA. Realization after such a long gap cannot be treated to be valid compliance of the provision. The fact remains that at the time of the adjudication the appellants had not realized any amount and thus the adjudication order is perfectly legal and valid and cannot be altered or set aside at this belated stage. Time is the essence and since the appeals have no merits therefore, they are liable .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ting that during the pendency of the appeal, the appellant has made consistent and persistent efforts and has realized the complete export proceeds qua the exports that have taken place during the year 1984 & 1985. Through Annexure A-I, the appellant has filed the particulars of GR numbers, names of the foreign buyers, invoice value, amount received and also certificate of realization of GRI forms by the concerned branch of State Bank of India. A certificate confirming the realization of exp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

been filed after almost 17 years of filing of appeals. The moot question for determination in the instant appeals is whether the post adjudication realization of export proceeds of transactions which had taken place way back in 1984-84 will have any bearing upon the findings recorded by the Adjudicating Authority of non-compliance and alleged contravention by the appellants. 14. At this stage, we wish to clarify that in our considered view no fruitful purpose will be served by remanding th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

either disposing of the appeal itself and considering such additional evidence itself or remanding or remitting the matter to the Adjudicating Authority for fresh determination in the light of additional evidence filed in appeal. We are inclined to opt for the first option and proceed to evaluate the consequences of realization of the export proceeds during the pendency of the appeal. 15. The appellants have contended that they have realized almost all the outstanding dues in each of the ap .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

said period, therefore, the presumption of having contravened provisions of Section 18 will be available against them. The Adjudicating Officer in view of the fact that RBI had declined the request for extension of time and the appellants had failed to realize any amount whatsoever within the time allowed to them was justified in holding that the appellants have contravened the provisions of Section 18 of FERA, 1973. The efforts made by them were duly considered by the Adjudicating Officer who f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n response. Therefore, in July, 1992 dates for personal hearing were fixed and several opportunities were afforded and ultimately Sh. J.S. Arora, Advocate, appeared on behalf of the appellants and filed written submissions out of which only one i.e. relating to show cause notice II were final submissions and in rest of the replies further time for filing detailed reply was sought. It has come that several reminders were sent to the said counsel by the Adjudicating Authority in between December, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

egally the alleged contraventions were made out against all the appellants. As regards the question as to whether adequate efforts for repatriation were undertaken by the appellants or not, it has been pleaded on behalf of the appellants that due to simultaneous proceedings by the Directorate of Revenue, Intelligence, CBI, ED, CCI, Customs and detention under COFEPOSA of the appellant M.L. Gupta, detailed replies could not be filed and immediate steps for repatriation could not be taken. We are .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

raventions under FERA r/w Central Government Notifications of 1974. Further, it is also not disputed that extension was sought by the appellants from the RBI. It has also come that the prayer for extension was declined by the RBI. 18. In the instant appeals, it has also been pleaded that due to persistent and sustained efforts of the appellants, almost entire export proceeds have been recovered after the year 2000. Therefore, there is no loss of foreign exchange to the exchequer. It has als .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nalty of ₹ 25,00,000/- has been imposed against M.L. Gupta, Karta. In Hindustan Steel Limited v. State of Orissa, AIR 1970 SC 253 = 1978 (2) E.L.T. (J159) (S.C.), the Hon ble Supreme Court has held that an order imposing penalty for failure to carry out a statutory obligation is the result of a quasi criminal proceeding, and a penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version