9911796707
TMI Blog2009 (8) TMI 1297X X X X Extracts X X X X X X X X Extracts X X X X ..... ly) against the appellant firm, M/s. Ashita Impex (P.) Ltd. and Rs. 5,00,000 (Rupees five lakh only) against its director, Narotam Sayal for contravention of provisions of section 9(1)(e) of the Foreign Exchange Regulation Act, 1973 and penalty of Rs. 30,00,000 against Narotam Sayal for contravention of provisions of section 8(1) of the Foreign Exchange Regulation Act, 1973. The appellants have made payment of 30 per cent of amount of penalty in compliance of the order of Hon'ble High Court dated 1-5-2008. Initially the appellants were directed by this Tribunal to deposit full amount of penalty. But the pre-deposit order of this Tribunal was challenged by the appellants which was modified by Hon'ble High Court and they were directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises was conducted on 1-4-2002 which resulted in seizure of certain documents. The statement of Narotam Sayal was recorded on 2-4-2002 and 3-4-2002 under section 40 of the FER Act where he stated that he was engaged in business of timber in the name of Style of M/s. Ashita Impex (P.) Ltd. He along with Ranjit Nanda was the directors of M/s. Ashita Impex Pvt. Ltd. and two other companies. When confronted with the seized documents in Page Nos. 93-114 of the file marked 'C' which were auditors report and annual accounts together with Director's report, for the period 2000-01, he explained them stating that the account showed an amount of US$ 2,00,26,245.22 in the name of M/s. Farlin Timbers Pvt. Ltd. under the heading 'sun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, shortages and difference in fluctuating foreign exchange. After taking into account the liabilities of M/s. Farlin under subject transactions, the remaining amount of Farlins liabilities was written off. The import of timber is an OGI, item, where no permission of RBI is required. The transaction did not come under the restrictive provisions of section 9(1)(e). The aim of FERA is to conserve foreign exchange which was fulfilled in this case by writing of the amounts. In case of import, the permission of RBI is not necessary for making write off as against the exports where permission is necessary. There was professional rivalry between M/s. Farlin and M/s. Miers who lodged complaints against the appellants for harassing them. The ingredi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in the seized document which was duly audited a/c which demonstrated that the amount was owed by the appellant company to M/s. Farlin, a person resident outside India. Admittedly there is no permission of the RBI in this case to place the said sum to the credit of a person resident outside India. The write of given by the appellants, being a unilateral act has raised several questions which have not been answered by the appellants. Moreover, it is not the case of the appellants that they ever approached the RBI for seeking waiver of the said amount which is substantial or kept the RBI informed about the said developments. Thus an adverse inference is the natural consequence. 10. In respect of the acquisition and transfer of foreign exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any purchase or sale of foreign currency effected in India between any person and a money changer. Explanation. For the purposes of this sub-section, a person, who deposits foreign exchange with another person or opens an account in foreign exchange with another person, shall be deemed to lend foreign exchange to such other person. 12. Thus under statutory scheme, as laid down under section 8 of the FER Act, no person resident in India other than an authorised dealer, shall outside India, purchase or otherwise acquire or borrow from, or sell, or otherwise transfer or lend to or exchange with, any person not being an authorised dealer, any foreign exchange. During the course of the investigations, the documents were seized which revealed re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emittances in the capacity of an agent to serve the best interest of principal. However, the appellant cannot be permitted to accept that part of his statement which suits him and to reject the another part which goes against him. The explanation offered by him is an afterthought and as such unacceptable. A careful consideration of the nature of the transactions, the seized documents and the statements of the appellant clearly demonstrate that the appellant was giving instructions to the overseas company and the foreign exchange was acquired and transferred by the appellant in contravention of section 8(1) of the FER Act, 1973. 14. However, the maturity amount of the insurance policy to the tune of US$ 1,63,360.55 equivalent to Rs. 79.S.727 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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