2018 (9) TMI 933 - AT - FEMA

Charge under Regulations 8, 9 & 13 of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 and Regulations 3(1) and 3(2) of Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000 read with Section 42 of FEMA, 1999 - Bill of Lading (B/L) relevancy - Held that - Two sets of documents available for the same shipment under the same B/L nos. While the appellants have claimed one to be genuine, the respondents have claimed the other to be genuine. From the impugned order no investigation done even to establish which was the correct B/L. The adjudication order does not even deal with the Indian High Commission or EFCC, Nigeria s letter even though it was mentioned before him during the personal hearing. Enquiries from the Steamer Agent M/s. Arebee Star Maritime Agencies Pvt. Ltd. was also done and the Branch Manager was summoned to appear before the Assistant Director, Enforcement Directorate, Chennai, wherein he stated that they were making enquiries with regard to discharge of shipments at Lagos when it was destined for Russia, and that as soon as they get any evidence regarding the same he would furnish it. However, in the entire order there is no further mention of the result of enquiry. It a case to be remanded back to the adjudicating authority to go into all the issues including the veracity of the B/L and pass a speaking order after affording an opportunity to the appellants.

Summary

Issues:
1. Export of medicaments to Russia against payment in Indian rupees but consignments actually shipped to Nigeria.
2. Allegations under various regulations of Foreign Exchange Management Act, 1999.
3. Discrepancy between Bill of Lading presented by the appellants and the one claimed to be authentic by the respondents.
4. Lack of investigation to determine the genuine Bill of Lading.
5. Need for remand to adjudicating authority for a comprehensive review and decision.

Issue 1: Export Discrepancy
M/s. Medopharm exported medicaments to Russia but two consignments were found to have been shipped to Nigeria, not in compliance with regulations requiring payment in the appropriate currency based on the final destination. Allegations under various Foreign Exchange Management Act regulations were made.

Issue 2: Legal Arguments
The appellants argued that they fulfilled their obligations by shipping goods on a Free on Board (FOB) basis, with no complaints from the Russian importer and repatriation through normal banking channels. They claimed the Bill of Lading specified St. Petersburg as the destination, thus denying liability for penalties.

Issue 3: Discrepancy in Bill of Lading
Respondents contended that the Bill of Lading provided by the appellants was fake, presenting an alternate Bill of Lading from the Indian High Commission in Lagos. This authentic document indicated diversion of goods to Nigeria, supported by investigations and transactions detailed in the EFCC report.

Issue 4: Lack of Investigation
The judgment highlighted the presence of conflicting sets of documents for the same shipment, with no conclusive determination of the genuine Bill of Lading. The adjudication order failed to address evidence from the Indian High Commission and EFCC, indicating a lack of thorough investigation into the matter.

Issue 5: Remand Decision
In light of the unresolved discrepancies and the need for a comprehensive review, the judgment concluded that the case should be remanded to the adjudicating authority. This remand would allow for a detailed examination of all issues, including the authenticity of the Bill of Lading, and the issuance of a comprehensive decision after providing the appellants with an opportunity to present their case.

In conclusion, the judgment in the Appellate Tribunal ATFEMA case addressed discrepancies in export destinations, legal arguments regarding fulfillment of obligations, conflicting Bill of Lading documents, insufficient investigation, and the decision to remand for a comprehensive review. The detailed analysis of each issue provided clarity on the complex legal aspects involved in the case, emphasizing the importance of thorough examination and fair adjudication in matters concerning foreign exchange regulations and export compliance.