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TMI Blog2024 (9) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... nion of India against the impugned order dated 18.03.2021 passed by the Adjudicating Authority, vide which penalty of Rs. 2 lakh each was imposed on respondent no. 1 & 2 respectively for contravention of section 7(3) of the Foreign Exchange Management Act, 1999, r.w. Regulation 9 of Foreign Exchange Management (Export of Goods and Services) Regulation, 2000, for delay in realization of the export proceeds to the extent of US$ 9,93,652 (equivalent to INR 6,08,85,128/-). 2. As per the facts of the case, information was received that out of the 21 foreign remittances, the export obligations were not completed within the prescribed period of financial year, as detailed at page 5 of the impugned order. During investigation, it is revealed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les, regulation, notification, direction or order issued in exercise of the powers under the Act, or contravenes any condition subject to which an authorization is issued by the RBI, he shall, upon adjudication, be liable to a penalty upto thrice of the sum involved in such contravention, where such amount is quantifiable, or upto 2 lakhs where the amount is not quantifiable, and where such contravention is a continuing one, further penalty which may extend upto five thousand rupees every-day after the first day during which the contravention continues.He stated that Ld. Adjudicating Authority did not consider that the contravention under FEMA shall affect the financial systems of the country.He submitted that once the Adjudicating Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal for enhancement of penalty is to state that the penalty imposed by the Adjudicating Authority is abysmally low. The appellant has stated that the Adjudicating Authority has ignored the provisions of Section 13(1) of FEMA which provides for imposition of penalty up to thrice the sum involved in the contraventions. Section 13(1) of FEMA, 1999 states:- "If any person contravenes any provision of this Act, or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes any condition subject to which an authorisation is issued by the Reserve Bank, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in such contravention where such amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f provides for a penalty up to thrice the sum involved in such contravention, where contravention is quantifiable and upto only Rs. Two lakh, where contravention is not quantifiable, and thereby, gives explicit scope to the Adjudicating Authority to exercise his discretion, albeit judiciously, for imposition of penalty. In the present case, the Adjudicating Authority has made a finding in the impugned Adjudication Order that the contraventions are technical in nature and keeping in view the nature of the contraventions, he has taken the lenient view in imposition of penalties. As per the admitted fact, export proceeds are already realized by the respondent, though with delay of two years & eight months and three years & two months,from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, in not having imposed penalty which is commensurate with the amount of foreign remittance against exports, particularly so when the contraventions were technical in nature as the substantive provisions of the Regulations have been complied with, even though with some delay. The Adjudicating Authority has imposed separate penalty of Rs. Two Lakh each on both the Noticee(s) on account of delay for the compliances/remittances against exports. In the given circumstances, where the contraventions are not of substantive provisions, the penalties of Rs. Two Lakh each on both the Noticee(s), imposed by the Adjudicating Authority meet the ends of justice. 6. In view of the aforementioned discussions and the reasons relied upon by the Adjudicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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