1995 (8) TMI 347 - AT - FEMA

Summary

Issues:
1. Imposition of penalty for non-realization of export proceeds under Foreign Exchange Regulation Act, 1973.
2. Appellant's defense not considered in adjudication proceedings.
3. Lack of opportunity to present evidence before the Adjudicating Officer.
4. Ex parte order passed before the scheduled hearing date.
5. Proprietary concern's liability under section 68(1) of the Act.

Analysis:
1. The appeal was filed against an adjudication order imposing penalties for non-realization of export proceeds, contravening the Foreign Exchange Regulation Act, 1973. The appellant challenged the penalties imposed on both the appellant and another individual associated with Apex Exports.

2. The appellant's counsel argued that the appellant, as the sole proprietor of Apex Exports, could be held liable for the penalty imposed on the other individual. The appellant contended that the penalty was imposed without providing an opportunity to present a defense in the adjudication proceedings.

3. It was highlighted that the appellant was not given a chance to present evidence of the realization of export proceeds before the Adjudicating Officer. The order was passed without considering the appellant's submissions, raising concerns about procedural fairness.

4. The ex parte nature of the order was emphasized, as it was issued before the scheduled hearing date. This raised doubts about the validity of the order and the procedural irregularities in the adjudication process.

5. The Chairman observed that a proprietary concern is not a separate legal entity from its proprietor. Therefore, the provision of section 68(1) of the Act, which pertains to penalties, cannot be invoked against a proprietary business. This observation clarified the legal position regarding the liability of proprietary concerns under the Act.

In conclusion, the appeal was allowed, and the impugned order was set aside. The case was remanded for fresh adjudication to provide the appellant with a fair opportunity to present evidence and defense. The Chairman's observations regarding the liability of proprietary concerns under the Act added clarity to the legal interpretation in such cases.