TMI Blog2016 (2) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 International. It is alleged that during the year 1976-1985 M/s. Kanta International, New Delhi, effected shipment of goods (garments) valued at ₹ 52,45,755.10 under the GRI Forms. M/s. Kanta International did not take effective steps for realization of the export proceeds within six months of the date of shipment or within the extended period and the substantial amount of ₹ 51,96,892.36 could not be recovered in respect of the said shipment. It was alleged that a contravention under Section 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 we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e did not file. The Adjudicating Authority was convinced that adequate efforts were not undertaken for realization and repatriation of the amount of sale proceeds. Therefore, he held the firm M/s. Sandeep Traders liable for the contravention and imposed a penalty 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 provisions of Sections 18(2), 18(3) of FERA, 1973 r/w relevant modification of Section 68(1) of FERA, 1973. 3. Appeal No. 522/1993 has been filed by M.L. Gupta against Adjudication Order No. SDE(R)III/58/93, dated 30-6-1993 whereby a penalty of ₹ 10,00,000/- has been imposed against M/s. M.L. Gupta Sons (P) Ltd., and a separate individual penalty of ₹ 5,00,000/- against the appellant M.L. Gupta for having contravened p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant M.L. Gupta or Mrs. Manjari Gupta were partners and contraventions of similar nature have been alleged against them, and the defence taken is common, therefore, for convenience sake, all the appeals are being disposed of by a common order/judgment. 8. From the perusal of record, it appears that the instant appeals were earlier heard by a Division Bench of this Tribunal consisting of Justice Subhash Samvatsar, Chairperson and Sh. M.A. Khan Yusufi, Hon ble Member and judgment was reserved. It appears that there was a difference of opinion between the Hon ble Chairperson and Hon ble Member. Therefore, the draft 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 were passed in the instant appeals. An affidavit each has been filed in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he penalties imposed 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. No enclosures or relied upon documents were supplied to appellants, the transactions were old, therefore, request for granting more time to file detailed reply was sought copies of all relied upon documents were demanded which were not furnished. No inspection was permitted and no personal hearing was afforded. Various agencies such as D.R.I.; Customs; C.B.I., CCI E E.D. were ...... after the appellant at the relevant time. Appellant M.L. Gupta was also detained under COFEPOSA due 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended period as the case may be under Section 18 of FERA. It is also a requirement that the exporter shall have to take all reasonable steps to receive or recover the payment of goods and in the event of his failure to do so, it will be presumed that he has contravened the provisions. In Appeal No. 519/93, affidavit of Moti Lal Gupta, Karta of M/s. Kanta International has been filed on 15-3-2010 stating 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 export proceeds has also been issued by the Bank. Canara Bank has also issued a certificate in 2004 stating that ₹ 2,30,545/- has been received. Certificates of CITI Bank, Canara Bank, etc. have also been filed. Details of realization and certificates in a consolidated form of all the appeals from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion 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 found that filing of mere correspondence with foreign buyers will not amount to due compliance of Section 18 of FERA. Therefore, the Adjudicating Officer rightly held the appellants guilty of contravening the provisions under which the appellants were charged. 16. The findings of the ld. Adjudicating Authority appear to us to be correct in view of the fact that most of the transactions had taken place around 1984-85 and show cause notices were issued on 16-4-1987. However, nobody turned up in 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalties of almost half of the amount of transactions involved after rounding off in each matter. For example, in Appeal No. 519/1993, the amount involved was ₹ 51,96,892.36 and a penalty 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 acted in conscious disregard of its obligation. It has further been held that imposition of penalty is a matter of discretion of the authority to be exercised of all the relevant circumstances. 19. 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 circumstances that the penalties imposed which are almost half of the amount of all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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