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Issues Involved:
1. Contravention of Section 8(3) read with Section 8(4) of the Foreign Exchange Regulation Act, 1973. 2. Contravention of Section 9(1)(c) of the Foreign Exchange Regulation Act, 1973. Issue-wise Detailed Analysis: 1. Contravention of Section 8(3) read with Section 8(4) of the Foreign Exchange Regulation Act, 1973: The first issue pertains to the alleged failure of Asian Electronics Ltd. (AEL) to surrender foreign exchange of DM 52,000 to an authorized dealer in India within 30 days of realizing that the amount could not be utilized for its intended purpose. The foreign exchange was acquired for purchasing a Semi-automatic Ceramic Capacitor Plant, including an Internal and External Silvering Unit from a West German firm, Seiferth. The unit was not supplied, leading to the charge of contravention of Section 8(3) read with Section 8(4). The Adjudicating Officer (AO) found that AEL had indeed failed to use the foreign exchange for the intended purpose and had not surrendered it within the stipulated time. Despite the remittance of DM 50,055 received later, the AO imposed a penalty of Rs. 50,000 on AEL for this contravention. On appeal, it was argued that the litigation and subsequent remittance should mitigate the penalty. The Tribunal acknowledged the remittance as a mitigating factor but upheld the contravention of Section 8(3) read with Section 8(4), reducing the penalty from Rs. 50,000 to Rs. 25,000. 2. Contravention of Section 9(1)(c) of the Foreign Exchange Regulation Act, 1973: The second issue involved the charge against AEL for allegedly acknowledging a debt of DM 11,598.40 to Seiferth without the general or special exemption of the RBI. This charge was based on an entry in the diary of the late P.A. Bhatt, a former Joint Managing Director of AEL, indicating "amount to be paid." The AO found that AEL had acknowledged the debt without the necessary exemption, thereby contravening Section 9(1)(c), and imposed a penalty of Rs. 50,000. On appeal, it was contended that the diary entry did not constitute an acknowledgment of debt on behalf of AEL, and there was no evidence of any right to receive payment being created in favor of the foreign supplier. The Tribunal agreed with this argument, noting that a mere acknowledgment of debt does not establish a contravention unless it results in the creation of a right to receive payment. Consequently, the Tribunal set aside the AO's finding and the penalty of Rs. 50,000 imposed on AEL for this charge. Conclusion: In summary, the Tribunal partially allowed the appeal. The penalty for the contravention of Section 8(3) read with Section 8(4) was reduced to Rs. 25,000, while the finding of contravention of Section 9(1)(c) and the corresponding penalty were set aside. The Tribunal directed that Rs. 25,000 be refunded to AEL within 45 days of the receipt of the order, considering the mitigating factors and lack of evidence for the second charge.
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