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TMI Blog2018 (9) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... gulation Act, 1973 thereby imposing a penalty of Rs. 25,00,000/- (Rupees twenty five lakh only) on the Appellant No. 1 Company M/s. Sigmalon Equipment Pvt. Ltd who has also Appellant No. 2, Shri Ashok Kumar (he is dead now) guilty of the charges under Section 16(1) read with 68(1) of Foreign Exchange Regulation Act, 1973 and thereby imposing a penalty of Rs. 15,00,000/- (Rupees fifteen lakh only). 2. The Dy. Director further held Appellant No. 2 guilty to the charges under Section 8(1) of Foreign Exchange Regulation Act, 1973 and thereby imposing a penalty of Rs. 10,00,000/- (Rupees Ten lakh only) on Appellant No.2, Shri Ashok Kumar. 3. It is the case of the Respondent, Enforcement Directorate, Mumbai that it has received information thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o show cause in writing within 10 days as to why Adjudication Proceedings as contemplated in Section 51 of the FERA, 1973 should not be held against them. Pursuant to the said direction of the Dy. Director, Enforcement Directorate, Mumbai, the Appellant filed their response. 7. Late Shri Ashok Kumar vide his reply dated 24.03.2003, clarified the position that the company did not enter into contract worth US $ 1,50,000 nor rendered the services in respect of documentation work. 8. By Order dated 14.05.2003, the Dy. Director inter-alia, held Appellant No. 1 company guilty under Section 16(1) of the Foreign Exchange Regulation Act, 1973 and thereby imposed a penalty of Rs. 25,00,000 (Rupees twenty five lakh only) on the Appellant No. 1, comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduced as under:- "as far as the allegations relating to siphoning of funds, we do not find much substance in the allegation of the Petitioner. In regard to the alleged siphoning off 1.5 Lakhs US Dollars, the Petitioner has not furnished any documentary evidence to show that such an amount was due to the Company and the same has been paid by the foreign party. In the absence of details, we are not in a position to hold these allegations against the 2nd Respondent." 13. The above finding and judgement of the Company Law Board were never challenged by Shri Vinod Kumar. In the present case, the action against the present Appellant was initiated by the Respondent also on the basis of only a complaint made by Shri Vinod Kumar. 14. It is adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this regard were produced/proved. It is also a matter of fact that show cause notice was issued on the complaint of Shri Vinod Kumar and after the findings of the court in favour of Late Shri Ashok Kumar. 19. The Dy. Director failed to apply its mind to the submissions made by Late Shri Ashok Kumar and by Shri Anshul Kumar, on behalf of Late Shri Ashok Kumar and the Appellant Company, to the Show Cause Notice and without there being any evidence with respect to the said allegation, the Respondent held the Appellant guilty under Section 16 (1) read with Section 68(1) of the Act and thereby imposed a very heavy and severe penalty of Rs. 25 Lakhs on the Company and Rs. 15 Lakhs and Rs. 10 Lakhs on Late Shri Ashok Kumar. 20. There is no other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in the alleged transaction of US $ 1,50,000/-. In case, Shri Ashok Kumar has received the Foreign Exchange from the German Company and deposited in his personal account, the documentary evidence ought to have been brought on record. On the basis of hearsay statement without any evidence, the findings could not have been arrived as it is the admitted position that Vinod Kumar brother Ashok Kumar had the litigations in the courts. 23. The financial status of the Appellant Company is that it had already closed down since 1991. The Appellant Company had also filed its IT Returns for the assessment years 2000-01 and 2006-07 by its Auditors together with profit and loss accounts and auditors report and also balance sheet and annual report end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was ever produced by Shri Vinod Kumar and or relied upon by the Respondent. Therefore, such statement made by Late Shri Ashok Kumar ought not to be relied upon by the Respondent during the adjudication proceedings in the absence of back-up evidence to some extent. Merely on the complaint by the rival party, no penalty can be imposed unless the admission based on some evidences as it is the practice that accuse always alleged that admissions are obtained under threat and pressure. In such situation, proper investigation is required in order to prove guilt of accused party. 27. The statements of Shri Vinod Kumar are contradictory and self-defeating. Shri Vinod Kumar in his statement dated 09.04.2002 before the Respondent states that he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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