TMI Blog2018 (10) TMI 1420X X X X Extracts X X X X X X X X Extracts X X X X ..... le period for the written submissions on behalf of the respondent, when the same was not filed, we proceeded to pass the present order on the basis of the written arguments filed by the appellant and the materials available on record. Once the issue of SCN of the offence completed in FERA regime no SCN can be issued after 1.6.2002 under FEMA,1999 because of the statutory bar under FEMA, 1999.Accordingly, in the light of the above, the appeal is allowed. The entire proceedings based on the illegally issued SCN (assuming jurisdiction under FEMA, 1999) is null and void ab-initio and therefore the penalty imposed is untenable by the force of law. - FPA-FE-119/MUM/2011 - - - Dated:- 25-10-2018 - Justice Manmohan Singh Chairman And Shri G.C. Mishra Member For the Appellant : Shri B. Seshagopalan, Advocate For the Respondent : Shri Prashant Pandey Legal Consultant JUDGEMENT FPA-FE-119/MUM/2011 1. The present appeal has been filed by the appellant against order (original) bearing no. ADJ/16-B/SDE/RAJ/2011/FEMA dated 31.5.2011 (received on 04.07.2011) by the Appellant in view of show cause notice no. T.4/30-B/2005/SDE/FEMA. The Special Director of Enforcemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealizing the pending exports proceeds. 6. The said M/s Ennore Traders P Ltd. started the export business of Towels in the year 1994 and exports were made till 1996. The Company in all exported goods worth ₹ 22 Crores and realized about ₹ 14 crores only. However, on account of world wide recession, sluggish market condition, devaluation of currency of East Asian countries in 1996 the company had been closed down in 1997 due to heavy losses. The name of the said company was deleted from the Register under Companies Act under section 560 of the Companies Act, 1956 since the Registrar was satisfied that there was no business since the last export made in January, 1996 due to heavy financial loss and the requisite further formalities have been duly complied by the Asst. Registrar. 7. On the basis of the above information/investigation a show Cause notice dt. 5.10.2005 was issued by the Respondent under the provisions of section 8 of the FEMA, 1999 r/w Regulations 9 and 13 of FEM ( Export of goods and services) Regulations 2000 and section 42 of the FEMA, 1999 to M/S Ennore Traders P Ltd , Shri. Sandeep Agarwal and the Appellant in the capacity of Directors of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssible recovery ii) AOZT TRIO MOSCOW :- The buyer has not only cheated M/s Ennore Industries Ltd. but also so many companies in Mumbai and has also been absconding. The said company was liquidated following the collapse of USSR and devaluation of Rouble. As the whereabouts of Russian company and the persons concerned were not traceable, which being the first step before blindly launching any proceedings in court in Russia which inturn would result in spending money without any scope that too when the company has been liquidated. iii) Tan Tekstil Turkey :- The goods in question were exported under D/P basis and the buyer did not clear the goods as the quota restrictions for textile goods were imposed by the Govt. of Turkey and did not take delivery of the goods. During the course of personal hearing on 17.02.2011 the authorized representative brought to the notice of the Respondent that the Govt. of Turkey suddenly implemented the quota system with effective from 01.01.1996 and even the Govt. Of India separately sought consultations with Trukey under ART. XXII of the GATT the Govt. of Turkey did not yield. In short even the Govt., of India could not solve the issue and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. Respondent s conclusion that R.B.I. did not agree to write off is purely hypothetical as on the date of adjudication and nothing but presumption without any basis. 10. The Appellant submits that the Respondent, ignoring all the judicial dictum and in highly arbitrary manner without even taking the crucial submissions with regard to reasonable steps taken in the back drop of precarious financial condition imposed an unreasonable penalty of ₹ 55,00,000/- on the Appellant vide his order dt. 31.5.2011 (received on 4.7.2011). 11. Aggrieved with the impugned order the Appellant has filed the present appeal inter alia amongst various grounds. a) The Appellant submits that the hearing in the instant adjudication took place on 17.2.2011 and the impugned order has been placed on 31.5.2011 (i.e. After clear three months) and as per the judicial dictum of the Apex Court in the case of Anil Rai which was duly relied on in the Appeal No.82 and 83/1999 of M/s. Bhagyalakshmi Pharma Lab Vs Special Director of Enforcement, Mumbai by the Tribunal vide its order dt.13.12.2010 while remanding the matter. The Appellant submits that being binding precedent the present impugned order c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntry suddenly imposing conditions of import which was not in force on the date of export and goods have been auctioned for no fault of the exporter no penalty can be imposed on the simple ground that initiation of legal action is not always a perquisite. d) The Appellant submits that the Respondent has acquitted was Modern Terry Towels Ltd ( Dt. of order 28.6.2002) probably on the ground the exports made to Aozt Trio, Moscow were written off . The Appellant submits that the ground of write off is nothing but the exports proceeds were not recoverable for the same reason as that of the M/s. Ennore Traders Pvt. Ltd. The only fault is that while the bankers of M/s Modern Terry Towels have recommended the bankers of M/s Ennore Industries Ltd did not recommend for the reasons best known to them as at no point of time they reverted back. The appellant submits that the appellant cannot be visited with the penalty for no fault of theirs and infact the duty of the bankers co-exist in the alleged contravention. e) The Appellant submits that as per the categorical judgment of the High Court of Delhi in the case of Ganesh Polytex Ltd. have categorically held that when the exporter had tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations 2000 and section 42 of FEMA, 1999 (Ref. Page No.26 of compilation of Appeal 4 Period of unrealized exports 1997-1998 (Ref. para 2 of judgment) Dec95-Dec 96 (Reference to page No. 28 and 29 of the compilation of Appeal) 5 Status of the Company JTS has become defunct and closed down operations since 1998-1999 (Ref. para No.10 of the judgement) The Company M/s Ennore Traders P Ltd has become defunct and closed down operations since 1995-96. The Company was dissolved and that is why no penalty was imposed on the company (Ref. page No.123 of compilation of Appeal and para No.15 of Adjudication order) 6 Intimation about non receipt of export proceeds 20.6.2002 (para No.7 of judgement/ 28.3.2003/3.7.2003 (Para No.2 and Page no.27 and page No.33 of of compilation of documents of Appeal) 7 Efforts made to realise export proceeds No details available in the judgement Page N0.53, 73 and 112 of the compilation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgement in the case of Bhupinder V.Shah Vs UOI. The said factual position has not denied by Mr. Pandey. It was not denied on behalf of respondent that the said judgement has attained finality as the same was not carried to Apex Court. 20. The final judgment rendered by the Hon ble High Court of Delhi is totally covered with the facts of the present case. The said decision is binding effect to this tribunal. Thus, the impugned order is liable to be set-aside. 21. In the present appeal both the parties had made their submissions on 16th May, 2018 and the order was reserved. On the said date, two weeks time was granted to the parties to file their written submissions. The written argument of the appellant was received however no written submissions has been filed by the respondent. Even after waiting for the considerable period for the written submissions on behalf of the respondent, when the same was not filed, we proceeded to pass the present order on the basis of the written arguments filed by the appellant and the materials available on record. 22. Once the issue of SCN of the offence completed in FERA regime no SCN can be issued after 1.6.2002 under FEMA,1999 becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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