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TMI Blog1991 (10) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... 1th Floor, Nariman Point, Bombay-21 and its Directors, The rationale in dealing with the six SCNs in the same adjudicaton order is not clear as the charges contained in the two sets of SCNs appear to be quite different excepting for the fact that Shri P.A. Bhatt, Who was the Joint Managing Director of Asian Electronics Ltd. (A.E.L) during the period when the alleged contravention of the Act took place, appears to have subsequently become a Director of Mulco Electronics Ltd. It also appears that Mulco Electronics Ltd. had filed a separate and independent Appeal before the Board (being Appeal No. 578 of 1985) which was disposed of by the Board on 31-12-1987 by its order of the same date. The Board had in the said order drawn attention to the confusion in the adjudication proceedings by reason of misjoinder of parties and the likely prejudice arising against a party in common proceedings when different persons and different contraventions of law are involved. Be that as it may, the facts leading to the present appeal are: SCN-I dated 31-12-1983 was issued to Asian Electronics Ltd. and its two former Joint Managing Directors, namely, S/Shri P.A. Bhatt and A.K. Hafizka calling upon them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s regards the charge contained in SCN-II, Shri Bhatt maintained that the foreign supplier had supplied the machinery against L/C for DM 8,00,401.60 and had drawn a bill for DM 11,598.40 which was not paid by A.E.L. Shri Bhatt also stated that he had retired from A.E.L. by the end of 1976. In the course of further correspondence, the department was informed that Shri Bhatt had expired on 1-10-1984. During the personal hearings before the Adjudicating Officer, A.E.L. was represented by its Advocate, Shri Madhu M. Patel along with its Director Shri Suresh H. Shah. Shri Shah during the proceedings stated that the,. foreign supplier had not supplied one unit of the plant as a result of which litigation had ensued and their lawyer in Germany had retained some amounts. Shri Shah further stated that he had become a non-resident Director of A.E.L. with the approval of the RBI in September 1979. During April 1980, according to Shri Shah, he had gone to Germany and entered into an agreement with Seiferth for remitting the amount of DM 52,000 and an amount of US $ 23,500 had been received by A.E.L. which was equivalent to DM 50,500. As regards SCN-II, Shri Suresh Shah stated that the entry sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also ended that the Appellant Company has been penalised for some of the and omissions of late Shri P.A. Bhatt in his capacity as Managing Director of the company and that Shri Bhatt had negotiated the deal on his and arrived at some understanding. It was also submitted that the penalties imposed on the company meant penalties on the new management the new management could not be penalised for the faults committed by the earlier management. Shri Madhu Patel, Advocate for the Appellants, rutted two further written arguments on 28-2-1989 and 24-4-1989. In the written submission, it has been contended that the company had received an inward remittance of DM 50,055 on 1-6-1981 and this made it clear that the company had realised the outstanding amounts, As regards the charge of 'acknowledging a debt in contravention of section 9(1)(c)(SCN-II). In Shri Patel submitted that the entry contained in late Shri Bhatt's diary indicating amount to be paid' would not amount to an acknowledgement of debt and even if it amounts to an acknowledgement of debt, it would be in the personal capacity of Shri Bhatt and could not be considered to be a acknowledgement on behalf of the company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing before the Board on 26-8-1991. Shri Madhu M.; Patel contended that the Appellants have subsequently received the entire amount of DM 52,000 through the intervention of one of their Directors, Shri Suresh Shah. However, representative of the Respondent, Shri Gadoo submitted, that even if the fact of receipt of DM 52,000 was not disputed, contravention of section 8(3), read with section 8(4), has been proved. Respondent's representative submitted that there was no evidence to show that the remittance of DM 52,000 was actually made by the foreign supplier of machinery in lieu of the disputed price of the ceramic capacitor plant. 4. As regards the charge under SCN-II, Shri Patel had contended that the Board had by its order dated 31-12-1987 in Appeal No. 578 of 1985 filed by Mulco Industries Ltd. held that an entry by one of its non-resident Directors in one of the files stating 'this will be attended to'(while referring to one of the Bills for airfare and professional services of a foreign expert) would not I amount to an acknowledgement of a debt within the meaning of section 9(1)(c). Relying on the Supreme Court judgment in Shapoor Fredoom : Mazda v. Durga Prosad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hange cannot be so used, , shall sell the foreign exchange to an authorised dealer or to a money-changer. Section 8(4) further provides 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 him at the time of acquisition of foreign exchange, such person shall, unless the contrary is proved, be presumed not to have been able to use the foreign exchange for the purpose for which he acquired it. On the accepted facts of the case, the Appellants had opened an L/C in favour of the foreign supplier on 8-4-1974 for DM 8,00,401.60 for the supply of a ceramic capacitor plant which included an internal and external silvering unit valued at DM 52,000 Since no such silvering unit was supplied, there is a clear contravention of section 8(3) inasmuch as the Appellants have failed to use the foreign exchange for the purpose for which it was acquired. The Appellants have however, contended that there was a dispute regarding th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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