TMI Blog1996 (2) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... section 68(1) of the Act. 2. The appellants have prayed for waiver of pre-deposit. Shri Thukral, the learned counsel for the appellant, submitted that the penalty on the second appellant has been imposed merely by applying the provisions of section 68(1) without considering the fact that unlike a company, the first appellant was a partnership firm and not an entity independent of the second appellant. He pleaded that the Board has always taken the view that if the penalty is imposed on a firm or company, a further penalty on the partners should not be imposed, particularly if the partner has not acted for personal gain, apart from in the course of the partnership business. Moreover, Shri Thukral submitted, that the second appellant is pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them. Shri Thukral submitted that during the period from 1977-78 when the firm was established to 1986 when the business was stopped the appellants exported goods worth about 45 lakhs and they had been regularly receiving payments from the foreign buyers. This, Shri Thukral stated, could be seen from the nil outstanding reported by two of the appellants banks. He submitted that out of the total outstanding amount of Rs. 13 lakhs, one shipment was of the value of Rs. 4 lakhs out of which the appellant received Rs. 3 lakhs and was expecting balance payment but due to the action initiated by DRI against the foreign buyers and their agent in India, they stopped payment. He further submitted that none of the foreign buyers disputed his liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtners as it would amount to punishing twice. As regards the first appellant, Shri Thukral submitted that in the event the Board upholds the finding of contravention he would strongly plead for reduction of the penalty amount. Reiterating his earlier submissions he stated that the firm had been defunct and had not carried any business since 1986. The other partner is his widowed mother and, therefore, the liability to pay any penalty on the firm would be on the second appellant personally. The financial position of the second appellant should, therefore, be taken into consideration, apart from other relevant factors for determining the amount of penalty. He submitted that the penalty imposed on the firm is too excessive for the second appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of a prudent businessman. They ought to have known that such proceedings are always prolonged and then there cannot be any guarantee that those proceedings would end in favour of foreign buyer or their agent. He also submitted that DRI had initiated action in 1988 whereas the export proceeds had become due for realisation more than a year earlier. 7. With regard to Shri Thukral s submissions in respect of the penalties, Dr. Shamsuddin did not dispute that this Board did not generally uphold the penalty on the partners, in addition to the penalty on the firm, though he added, there was no legal bar to imposition of penalty on the partners. As regards the penalty on the first appellant, he submitted that if the appellants could afford to aw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l has tried to rebut the presumption by putting forth the facts of DRI action and the receipt of the remittances of Rs. 3 lakhs and taking the plea that the appellants, under those circumstances, could not have done anything except to persuade the foreign buyer to clear the outstanding amount. In my opinion, the plea of DRI action has no force as it is not disputed that the foreign buyer had remitted Rs. 3 lakhs towards outstanding dues even subsequent to DRI s action. The appellant s plea that personal persuasion, which resulted in the remittance of Rs. 3 lakhs was, under the circumstances, a more prudent business approach, has some force but they ought to have known that they had certain obligations under the law which regulated their bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts has already caused loss to the appellants. Since it is not disputed that the appellants had stopped their export business in 1986, their submission that they had to do so due to losses suffered by them, cannot be rejected outright. In the circumstances, a penalty of Rs. 1,50,000 would be harsh. Another factor to be taken into consideration is that the burden of payment of penalty will ultimately be on the second appellant as the first appellant is defunct. In my opinion, a penalty of Rs. 35,000 would be adequate to desist the appellants from committing such contraventions. 12. As regards the second appellant, the penalty has been imposed on him only by invoking the provisions of section 68(1), it appears to be only judicious, that havi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|