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TMI Blog2013 (11) TMI 1540X X X X Extracts X X X X X X X X Extracts X X X X ..... ny penalty. Further, one of the partners Shri Sharavan Kumar has stated in his statement before the 1st respondent herein that the appellant and two others are partners besides the appellant and another partner Shri Sharavan Kumar were looking after the business and the day to day affairs of the Company - Decided against appellangt. - C.M.A. No. 1610 & M.P. No. 1 of 2008 - - - Dated:- 22-11-2013 - C.S. Karnan, J. Shri K. Sakthivel, for the Appellant. Shri K. Ramasamy, Special Govt. Pleader and T. Poornam, for the Respondent. JUDGMENT The short facts of the case are as follows :- The Deputy Commissioner of Customs, Chennai, ordered recovery of ₹ 15,42,642/- as drawback of the Customs and Central Excise Duties Drawback Rules of 1995 read with Section 75(1) of the Customs Act, 1962, from M/s. Dhaneshwara Overseas and its Partner, Mr. Sharavan Kumar, on the ground that export proceeds in respect of shipping bills dated 18-12-2000, have not been realized. Based on the above information details of pending export bills were called from the Tamil Nadu Mercantile Bank Limited, through which the export bills for M/s. Dhaneswara Overseas were negotiated. M/s. Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aman Prakash, Shri Regraj Rathod and one Kishore Kumar were partners apart from him in M/s. Dhaneswara Overseas, he and his brother Daman Prakash were only responsible for the conduct of the business of the firm. The Reserve Bank of India, vide letter dated 12-3-2004 in response to letter dated 4-3-2004 of Madras Office of Enforcement, has confirmed that they have not granted any extension of time beyond 10-11-2003 and also in this further letter dated 29-3-2004 confirmed that they have not considered any waiver/write off for the said firm. As regards to the distribution in G.R. No. AP-784860, dated 23-7-1998 for US$ 900, the Tamil Nadu Mercantile Bank, Chennai-6, vide letter dated 6-8-2004 confirmed that the said bill belonged to M/s. Dhaneswara Overseas and is still pending realization. 4. Mr. Daman Prakash, another partner of M/s. Dhaneswara Overseas, was also examined under summons on 27-5-2004 and his statement was recorded, wherein he, inter alia, stated that the firm was started as a family concern but the matter related to unrealized export bills of M/s. Dhaneswara Overseas was followed by his brother, Mr. Sharavan Kumar, with their Foreign buyers to raise the pending ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm was submitted with documentary proof as to what action has been initiated to recover the export dues outstanding, the request of noticee No. 2 would not be acceded to. The noticee No. 3 in the telegram dated 4-12-2004 requested for short adjournment instead of 7-12-2004. Accordingly, the case was fixed on 23-12-2004 at Chennai. Meanwhile, Mr. R. Lokanathan, Advocate for Daman Prakash vide letter dated 13-12-2004 requested for time on the ground that they were not provided with copies of the relied documents. The relied upon documents was again supplied on 15-12-2004 against acknowledgement. The call notice meant for M/s. Dhaneswara Overseas and Shri Sharavan Kumar were served under Section 9(c) of FEMA, 1999 on 15-12-2004 and the call notice issued to Mr. Daman Prakash was received by one Mr. S. Chockalingam on 15-12-2004. 7. It is additionally added that on 23-12-2004 Mr. B. Kumar and Mr. V.S. Srikrishnan, Advocates appeared on behalf of Mr. Daman Prakash and submitted a letter dated 22-12-2004 along with certificate dated 20-12-2004 issued by M/s. S.L. Gadhia and Company C.A. firm regarding filing the returns of income-tax for the period of 1996 to 2004. In his submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers are guilty in terms of Section 42 of FEM Act, 1999. Shri Sharavan Kumar, Daman Prakash and M/s. Dhaneswar Overseas are liable to penalty under Section 13 of the said Act. 10. Aggrieved by the said order Mr. Daman Prakash, has filed an appeal No. 179 of 2005, on the file of the Appellate Tribunal, Foreign Exchange, New Delhi, the said appeal was dismissed by the Appellate Authority on 13-1-2005. Against the said dismissal of the appeal now the present appeal has been filed by the appellant. 11. The highly competent counsel Mr. K. Sakthivel submits that the Reserve Bank of India has condoned the non-realization of export proceeds of M/s. Dhaneswara Overseas, in which the appellant was a partner after the provisions of the Foreign Exchange Management Act by way of order dated 23-2-2005 thereby nothing survives in the adjudication initiated earlier to the order of the Reserve Bank for condonation. The Reserve Bank of India had granted extension up to 10th November, 2003 for furnishing explanations and thereby on the material date on which the adjudication order was passed, there was no cause of action. The non-realization of the export proceeds by itself is not the offence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Dhaneswara Overseas. 14. The learned counsel had cited the below mentioned citation : 2005 (5) CTC 65 Negotiable Instruments Act, 1881, Sections 138 141 - Offences by Companies - Liability of Managing Director, Directors and persons in charge of and responsible for conduct of business of company - When persons are sought to be made criminally liable under Section 141 for offence committed by companies, such person should be incharge of and responsible to company for the conduct of business of company at the time when offence is committed - Every person connected with company cannot be held responsible - Only those persons who were in charge of and responsible for conduct of business of company at time of commission of offence will be liable for criminal action - Criminal liability depends on role played in affairs of company and not on status or designation - Every Director, Manager or secretary of company cannot be made liable for criminal action - Direct involvement in offence committed is necessary - Consent or connivance or neglect on part of holders of office of company would be essential - Complaint must disclose necessary facts regarding liability of official ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not be acceded to. The learned counsel further contended that the noticee No. 3 in their telegram dated 4-12-2004 request for short adjournment instead of 7-12-2004. Accordingly the case was filed on 23-12-2004, at Chennai. The appellant had stated that the firm is a family partnership company. The partners were Sharavan Kumar, Narendra Kumar who expired on 15-11-1996 hence his son Kishore Kumar was inducted as a partner from 16-11-1996, Shri Regraj Rathod and Shri Daman Prakash that the firm as well as the partners are assessed for Income Tax and that the firm has been carrying on business from 1992 onwards. The highly competent counsel further submits that the Deputy Commissioner of Customs responsible for the recovery of ₹ 15,42,642/- of drawback of the Customs and Central Excise Duty Drawback Rules, 1995 from M/s. Dhaneswara Overseas, on the ground that export proceeds in respect of supporting bills dated 18-12-2000. There were 8 export bills for a total value of ₹ 1,64,90,623/- in respect of export of fabrics and garments made during the period of August, 1998 to January, 2001, the said particulars furnished by M/s. Tamilnadu Mercantile Bank. One of the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bonded Warehouse, because the bills are in D.P. at site and that the goods were reported to be gone for public auction. 17. The learned counsel further submits that the appellant s brother Shri Sharavan Kumar, stated that the partner of the firm are the appellant herein and Mr. Kishore Kumar were partners including himself and the appellant herein is only responsible for the conduct of the business of the firm. As such the appellant is liable to pay the penalty. The appellant also was examined and he had stated that the firm is being run by the family members. The Tamil Nadu Mercantile Bank vide his letter dated 6-8-2004 confirmed that distributed GR. No. AP784860, dated 23-7-1998 for US$ 900 was handed over to Dhaneswara Overseas and the same is still outstanding. Further, Shri Sharavan Kumar and the appellant herein were solely responsible for the conduct of the business of the firm, being the partners during the relevant period. One of the partners, Shri Sharavan Kumar stated in his statement that the appellant herein was looking after the business and day to day affairs of the Company. Therefore, the penalty was imposed. Hence, the learned Senior Counsel for the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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