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TMI Blog2008 (12) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... m Khan as Managing Director and partner of a said company and the firm for the contravention of provisions of section 10(6) of the FEM Act, 1999 read with regulation 6(1) of FEM (Realisation, and Surrender of Foreign Exchange) Regulation, 2000 for having misused the foreign exchange remitted abroad for import of goods where the goods imported were found to be different in nature, weight and value as against the declaration made by the appellants in Form A-1. The actual value of the goods so imported were found to be US $92,927 as against declared value US $29,625 in case of M/s. A.R.M. (P.) Ltd., and in case of M/s. Pashun Impex US $80826.82 as against the declared value of US $27059.91. The Special Director (Appeals) confirmed the Adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exchange remitted for the purpose for which it was remitted where the appellants were held guilty and being aggrieved these appeals have been preferred by the appellants for setting aside the impugned order. 5. I have heard elaborate arguments from Shri Deepak Jain, Advocate on behalf of the appellants and Shri A.C. Singh, DLA, for the respondent and gone through the record, relevant law and judicial pronouncements carefully. It is argued on behalf of the appellants that Special Director (Appeals) has erroneously confirmed the order of the Adjudicating Authority. The Adjudicating Authority had no jurisdiction to go into the matter when the proceedings have been drawn by the custom authorities and the matter was subjudice before the CESTAT. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the relevant provision of section 10(6) of the FEMA, 1999, for better appreciation of the legal preposition which is produced below : Authorised person. ****** (6) Any person, other than an authorised person, who has acquired or purchased foreign exchange for any purpose mentioned in the declaration made by him to authorised person under sub-section (5) does not use it for such purpose or does not surrender it to authorised person within the specified period or uses the foreign exchange so acquired or purchased for any other purpose for which purchase or acquisition of foreign exchange is not permissible under the provisions of the Act or the rules or regulations or direction or order made thereunder shall be deemed to have committed con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RI in Bangalore on 1-5-2003 and 2-5-2003 respectively. On enquiry DRI informed vide their letter dated 19-8-2003 to the Enforcement Directorate that the company mis-declared the items and the proceedings were pending against them. 9. From perusal of record, it is clear that K. Riaz Ahmed, Manager of M/s. Pashun Impex in his statement dated 20-6-2003 admitted that the mis-declaration of goods was made by the appellants before the custom authorities with a view of paying lesser custom duty and vide letter dated 25-6-2003 the firm requested for adjudication of the case without the issue of the show-cause notice and personal hearing. It is not explained by the appellants as to why the manager of their firm will falsely implicate the appellants. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved by the Supreme Court in Standard Chartered Bank v. Directorate of Enforcement 2005 (5) JT 267. The Court observed that there are two modes of dealing with person violating FERA while primary purpose of adjudication is of imposing penalty in the interest of revenue and the preservation of Foreign Exchange, the primary purpose of prosecution, is to serve a strong deterrent to persons or companies contravening the provisions of the Act and to send a message to the security at large. The Supreme Court observed as under: The two proceedings i.e. Adjudication as contemplated under section 50 of the FER Act and prosecution under section 56 of the FER Act are independent and the finding of one is not conclusive in the other. 11. The FERA was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent in nature, quality and weight and value than the goods declared in the relevant bills of entry and Form A-1 and the imported goods were misdeclared by the appellants. The charges are found established against the appellants. The appellant company/firm and its Managing Director/partner have rightly been held guilty under section 10(6) read with regulation 6(1) of FEM (Realisation and Surrender of Foreign Exchange) Regulation, 2000. 13. It is not disputed that the appellant in Appeal No. 141/06 was the partner of the appellant firm M/s. Pashun Impex during the relevant period who was responsible for the day to day functioning of the said firm. So far as the amount of penalty against the appellant firm, M/s. Pashun Impex is concerned, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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