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TMI Blog2017 (1) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions. In view of the belated show cause notice being served on the appellant, the defence of the appellant that it was not in possession of the copies of Bill of Entry for the two transactions is plausible. It cannot be held that the respondent has proved its allegation beyond reasonable doubt and the copies of the Bills of Lading probablise that the remittances were utilized for import. Consequently, the impugned orders passed by the Appellate Tribunal and the Adjudicating Authority are set aside. - CRL.A. 952/2012 and Crl. M.A. Nos. 14143/2012 and 11140/2014 - - - Dated:- 11-1-2017 - MS. MUKTA GUPTA J. Appellant Represented by: Mr. Rajshekhar Rao and Mr. K. Harshavardhan, Advocates. Respondent Represented by: Mr. Kunal Dutt, Advocate. MUKTA GUPTA, J. (ORAL) 1. Show cause notice was issued to the appellant alleging violation of Section 8 (3) and Section 8 (4) of the Foreign Exchange Regulation Act, 1973 (in short FERA ) read with Chapter 7A.20 (i) of the Exchange Control Manual, 1995. 2. It was alleged that though foreign exchange was remitted in four imports however, the appellant failed to submit exchange control copy of Bill of Entry for confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A reads as under: 8 (3) Where any foreign exchange is acquired by any person, other than an authorised dealer or a money-changer, for any particular purpose, or where any person has been permitted conditionally to acquire foreign exchange, the said person shall not use the foreign exchange so acquired otherwise than for that purpose or, as the case may be, fail to comply with any condition to which the permission granted to him is subject, and where any foreign exchange so acquired cannot be so used or the conditions cannot be complied with the said person shall, within a period of thirty days from the date on which he comes to know that such foreign exchange cannot be so used or the conditions cannot be complied with, sell the foreign exchange to an authorised dealer or to a money-changer. 8 (4) For the avoidance of doubt, it is hereby declared that where a person acquires foreign exchange for sending or bringing into India any goods but sends or brings no such goods or does not send or bring goods of a value representing the foreign exchange acquired, within a reasonable time or sends or brings any goods of a kind, quality or quantity different from that specified by hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) Importer's full name and address with code number. (b) Import licence number and date (wherever applicable) (c) Bank's reference of letter of credit number etc., if any. (d) Number and date of Exchange Control copy of bill of entry/postal wrapper and the amount of import. (e) Particulars of goods imported (iii) Internal inspectors or auditors (including external auditors appointed by authorised dealers) should carry out 100% verification of all the Exchange Control copies of bills of entry/postal/wrappers and a certificate to that effect should be forwarded, on half-yearly basis, to the office of Reserve Bank under whose jurisdiction the authorised dealer is situated. (iv) In case an importer does not furnish the Exchange Control copy of Bill of Entry within three months from the date of remittance (or within prescribed period as provided in paragraph 7A.10), the authorised dealer should issue a reminder to the importer asking him to produce it forthwith. If there is still no response, a reminder by registered post with acknowledgement due should be issued not later than one month from the date of the first reminder. (v) Authorised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Company, it does not by its mere production amount to a proof of it or of the truth of the entries therein. If these entries are challenged the Appellant must prove each of such entries by producing the books and speaking from the entries made therein. If a letter or other document is produced to establish some fact which is relevant to the enquiry the writer must be produced or his affidavit in respect thereof be filed and opportunity afforded to the opposite party who challenges this fact. This is both in accord with principles of natural justice as also according to the procedure under Order XIX Civil Procedure Code and the Evidence Act both of which incorporate these general principles. Even if all technicalities of the Evidence Act are not strictly applicable except in so far as Section 11 of the Industrial Disputes Act, 1947 and the rules prescribed therein permit it, it is inconceivable that the Tribunal can act on what is not evidence such as hearsay, nor can it justify the Tribunal in basing its award on copies of documents when the originals which are in existence are not produced and proved by one of the methods either by affidavit or by witness who have executed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. The State of Orissa, AIR 1970 SC 253 wherein the Court while dealing on the question of imposition of penalty observed as under:- Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. 28. In Bata India Ltd. (supra), the Calcutta High Court observed that it was obligatory for the authorities under FERA (which stands replaced by FEMA) to consider the question of propriety of imposing penalty in the facts of a given case. It observed that it is settled law that penalty would not be imposed in quasi criminal proceedings merely because it is lawful to do so. Whether penalty should be imposed or not is a matter of disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment as prosecutor to make out a case beyond all reasonable doubt that there has been a violation of the law. In this regard, reliance was placed on In re HPC Productions Ltd., 1962 (2) WLR 51. 10. Thus the Courts have repeatedly held that in quasi criminal proceedings the penalty should not be imposed merely because it is lawful to impose the penalty. Whether penalty should be imposed or not is a matter of discretion to be exercised judicially and on consideration of all the relevant circumstances. Further simplicitor from the non-compliance of placing on record no inference can be drawn that the foreign remittance was not used for the purpose of import. It is trite law that to impose a penal liability compliance should be sought within a reasonable time and a person cannot be penalised for not retaining the documents for a period of 13 years. During the course of the present appeal, exchange copy of Bill of Entry qua transaction at Sr. No. 2 has already been placed however, despite best efforts the appellant could not locate the exchange copies of Bills of Entry qua other two transactions. 11. In view of the belated show cause notice being served on the appellant, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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