2003 (12) TMI 688 - AT - FEMA

Summary

Issues:
1. Violation of section 8(3) and 8(4) of the Foreign Exchange Regulation Act.
2. Intervention by the Forum regarding penalty imposition.

Detailed Analysis:
1. The judgment pertains to an appeal from orders of the Deputy Director of Enforcement, Bangalore, regarding violations of section 8(3) and 8(4) of the Foreign Exchange Regulation Act. The company and its Directors were charged with acquiring and remitting foreign exchange without submitting the required documentation to the bank, contravening the Act's provisions. The Adjudication Officer found the noticees guilty and imposed a penalty, leading to the appeal by the company and co-noticees.

2. The central issue for the Forum to decide was whether the findings and penalty imposed warranted intervention. The appellant argued that the default in import documentation was due to the Port Trust's actions and not wilful default on their part. However, evidence showed that the goods were not received in India, leading to a breach of the Act's provisions. The Adjudicating Officer's findings were deemed legally sound, and the appellant's arguments were found to lack merit.

3. Regarding the penalty, the appellant contended that there was no guilty intent in the default. Despite this claim, the failure to import the goods and the company's silence on the matter indicated a culpable mindset, inferring mens rea. However, considering mitigating circumstances such as significant losses incurred by the company, a reduced penalty of Rs. 15,000 was deemed appropriate. The penalty was divided between the company and its Directors, with the modified amounts being Rs. 10,000 for the company and Rs. 2,500 each for the Directors.

4. Ultimately, the appeal was partly allowed, concurring with the findings of guilt and modifying the penalty to Rs. 15,000. The company was directed to deposit Rs. 10,000 accordingly. The judgment highlighted the importance of complying with foreign exchange regulations and the consequences of non-compliance, even in cases where intent may be disputed.