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2019 (6) TMI 636

..... 1999 read with regulation Nos. 8,9 & 13 of Foreign Exchange Management (Export o Goods and Services) Regulations, 2002 - Penalty imposed - HELD THAT:- Foreign Exchange Management Act, 1999 (‘FEMA’) was brought in to keep pace with the changing dynamics of the Indian economic polity repealed the Foreign Exchange Regulation Act, 1973 (‘FERA’) and came into force on 1-6-2000. Apart from removing criminal prosecution for non-compliance of foreign exchange norms, FEMA also introduced a sunset clause for taking notice of contraventions under FEMA. FEMA provides that no adjudicating authority shall take notice of any contravention under FERA two years after the coming into force of FEMA. In other words, it provided a window up to 31-05-2002 for the authorities under FEMA to take notice of contraventions under FERA. The export of goods had been made on 29h May, 2000 under GR No. 366158. The subject export was governed by the Foreign Exchange Regulation Act, 1973 and no proceedings under section 8 of the FEMA 1999 which came into force on 1st June 2000 could be applicable for the GR No. 366158 dated 29.05.2000. In BHUPENDRA V. SHAH VERSUS UNION OF INDIA & ORS .....

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..... ountant For the Respondent : Ms. Aagam Kaur, Legal Consultant JUDGMENT FPA-FE-24, 25 & 26/KOL/2017 1. By this order, this Tribunal proposes to decide the above-mentioned appeals filed u/s 17 of the Foreign Exchange Management Act, 1999, against the order dated 10.03.2017 passed by the Special Director. 2. The operative part of the impugned order is read, as under:- The submission of the AR, order of the Adjudicating Officer and the Grounds of appeal along with additional grounds were duly considered. It is an admitted fact that the appellant exported goods on 29.05.2000 of US$ 29100 and failed to realize export proceeds of US$6558.64. In this case, FEMA came to existence w.e.f. 01.06.2000 while export was made on 29.05.2000 i.e. 1-2 days before the new Act came into operation. The violation by the appellant came to light on 23.06.2010 when XOS statement for non-realization/short of foreign exchange received and accordingly show cause was received. The plea taken u/s 49(3) by appellant in additional grounds and submission is not applicable as violation came was found in 2010 only. NO sufficient reasons were advanced by the appellant for non-relisation of US$6558.64 as export pro .....

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..... /s. Jiwanram Sheoduttrai Industries Pvt. Ltd. was recorded on 22.9.2011 during investigation wherein he inter alia, stated that amount of Euro 35952.00 and US$ 8421.00 is pending realization against the aforesaid exports. He also stated that during the period 2000- 2008 when the exports in question were made, he himself and Shri Pankaj Poddar, the then Executive and now Director were responsible for conduct of business of the company. v) The investigations made have revealed that M/s. Jiwanram Sheoduttrai Industries Pvt. Ltd Kolkata during the year 2000; exported goods under cover of GR No. AT 366158 dt. 29.5.2000 (Bill No. 21 PSFBCU-14521700 dated 05.7.2000) and failed to realize export proceeds of US$ 6558.64 equivalent to ₹ 3,87,368.00. vi. S/Shri Alok Prakash and Pankaj Poddar, Directors of the company M/s. Jiwanram Sheoduttrai Industries Pvt. Ltd. were responsible for the realization of the export proceeds. They have failed to take reasonable steps to realize the export proceeds. vii. Based on the above complaint dated 10.7.12 and documents relied therein, Show Cause Notice No. T- 4/01/Kol/SCN/FEMA/2012/AD/Adj/4866-4868 dated 11.7.12 was issued to the said M/s. Jiwanram .....

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..... uments advanced by the said buyer was compelled to accede to their request which was considered to be genuine and subsequently informed the negotiating banker i.e. Dena Bank, Park Street Branch, Kolkata vide letter dated 12.2.03 that out of outstanding amount of US$ 29,100.00 (Bank Ref. No. 14521700) plus US$ 1862.00 (Bank Ref. No. 14526600) totaling US$ 30,962.00, the said buyer had remitted US$ 22541.36 towards final settlement which was arrived at after prolonged verbal negotiations between them and the less amount i.e. US$ 8421.04 should be treated as trade discount. The noticee company also requested their banker to accept the FIRC and release the pending GR. 4.3 The noticee company informed their banker vide letter dated 12.2.2003 about proposed settlement of export bill along with submission of FIRC for US$ 22,541.36 which is the subject matter of the present show cause notice in question their banker neither rejected out claim nor advised them any further course of action relating to the matter and as a result they had shown the relevant export bill as part outstanding in their Books of A/cs. Moreover, the noticee company s employee who was acquainted with the matter and de .....

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..... e Customs Authority to re-export the same articles to the said overseas buyer within 6 months after necessary repairing/reconditioning work. 6. Accordingly, JSIPL re-exported the whole item after completion of reconditioning/ repairing. Out of total invoice value of US $ 30962 the said buyer remitted US $ 22541.36 towards final settlement which was received after prolonged negotiations. The said fact was duly conveyed and informed to the Dena Bank the Authorised dealer of JSIPL with a request to the then Manager of the Bank to treat the difference (shot remittance) of US $ 8421.04 as trade discount. 7. It is the case of the appellants that the then manager in its own wisdom neither informed the company nor closed the export outstanding in its books and consequent to that the impugned notice has been received by the company. JSIPL was not aware of the unilateral action of the bank and was not aware of the fact that the bank have chosen to show that export bill as outstanding whereas in fact the matter had been settled between the buyer and the Company. Furthermore, in any business leave apart export business there are numerous occasion where there is difference of opinion about the .....

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..... JSIPL has not written off any export debtors during the last preceding two years, Audited accounts are already submitted therefore penalty is wrongly imposed 11. JSIPL has continued to be in the business of exports. The export made by the company calculated on FOB Basis in subsequent financial years in the following table: Financial year Export of goods (Amount in Rs.) 2000-2001 18,69,13,348 2001-2002 20,98,76,543 2003-2004 23,81,91,538 2004-2005 28,68,68,248 2005-2006 40,03,65,807 2006-2007 50,94,38,092 2007-2008 69,24,53,370 2008-2009 81,45,28,007 2009-2010 54,57,60,127 2010-2011 82,10,38,168 2011-2012 98,66,55,884 2012-2013 113,93,66,674 2013-2014 126,72,53,646 2014-2015 111,15,48,733 2015-2016 106,66,62,315 12. Thus, the company or its Directors are no circumstances any loss to the exchequer could have been through by them. The company and or its Directors had negotiated very hard as per material available with the buyer failed to convince him to release the payment. In fact it is a case of less - realisation of proceeds due to the fact of defective supply and also the information about the less realization has been passed on to the Authorised dealer to deal with. Legal issue .....

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..... nt with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act; b. Any appeal preferred to the appellant board under subsection (2) of section 52 of the repealed Act but no disposed of before the commencement of this Act shall stand transferred to and shall be disposed of by the Appellate Tribunal constituted under this Act; c. Every appeal from any decision or other of the Appellate board under subsection (3) or subsection (4) of section 52 of the repealed Act shall, if not filed before the commencement of this Act, be filed before the High Court within a period of sixty days of such commencement; Provided that the High Court may entertain such appeal after the expiry of the said period of sixty days if it is satisfied that that appellant was prevented by sufficient cause from filing the appeal; vi) Save as otherwise provided in subsection(3), the mention of particular matters in subsections(2), (4) and (5) shall not e held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897 (10 of 1897), with regard to the effect of repeal. 16. The export of goods had been made on 29h May, 2000 under .....

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..... n (3) of section 49 provides that notwithstanding anything contained in any other law for the time being in force, no court shall take cognizance of any offence under the repealed Act and no adjudicating officer shall take notice of any contravention under Section 51 of the repealed Act after the expiry of a period of two years from the date of the commencement of this Act. Many orders on this issue have also been passed by this Tribunal in favour of the appellants under the similar circumstances. 21. The FEMA was enacted in the year 1999, but in view of provisions contained in its section 1(4) it came into force on 1.06.2000 when the Central Government by notification in the Official Gazette notified it. The adjudicatory proceedings initiated under the FERA would be saved particularly when an express intention for saving all those proceedings is available in aforesaid section 49. According to Section 49(3) of the FEMA therefore such proceedings would only be valid notice of which has been taken by the adjudicatory officer within two years from the date of commencement of the FERA. 22. Decision under FERA but still valid under FEMA- In LIC VS Escorts Ltd. AIR 1986 sc 1370(1986) 1 S .....

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