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Violation of Section 9(1)(e) of FER Act, 1973 - Placing amount to the credit of a non-resident without RBI permission. Analysis: The judgment by Km. Vijay Laxmi, Member of the Appellate Tribunal for Foreign Exchange, pertains to appeals against a penalty imposed on a company and its directors for contravening Section 9(1)(e) of the FER Act, 1973. The penalty was for placing Rs. 95,000 to the credit of a non-resident without RBI permission. The appellants argued that the transaction was a local financial one, denying any foreign exchange involvement. They claimed ignorance of the non-resident status of the individual involved. However, it was established that the amount was indeed credited to a non-resident without seeking RBI permission, a clear violation of the law. The tribunal noted that the appellants failed to seek RBI permission before crediting the amount to a non-resident individual. It was emphasized that no one would deposit a significant sum without some acquaintance with the company, placing the burden on the appellants to verify the individual's residential status. The association between the company and the non-resident individual indicated the appellants' knowledge of the individual's status, reinforcing the charge against them. The judgment highlighted the importance of regulatory mechanisms under the FER Act to prevent economic offenses. It cited a case emphasizing the need to administer justice impartially to protect the national economy and interests. Despite the appellants' arguments, the tribunal found the impugned order to be correctly passed. The penalty amount was deemed appropriate considering the contravention's seriousness and the quantum involved. The tribunal upheld the penalty and directed the appellants to pay within 15 days, warning of legal action if the amount was not deposited promptly. Overall, the appeal was dismissed for lacking merit, affirming the penalty imposed for violating Section 9(1)(e) of the FER Act, 1973.
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