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TMI Blog2023 (7) TMI 1477X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions had occurred. Form 32 in the case of Shri R. Gopalakrishnan shows that he vacated office as an Additional Director and reappointed as a Director w.e.f. 22-7-1999. In the appeal, pleading has been made that Shri R. Gopalakrishnan was non-executive and independent Director who was not involved in the day to day affairs of the Company. The Adjudicating Authority has acknowledged that the Show Cause Notice has failed to spell out clearly the role of the Directors. Therefore, the aforementioned charges established for the Company fail to hold good under section 42 of FEMA 1999 against the aforementioned four Directors of the Company. While the charges against the Appellant Company stand established, in view of the fact that the Company has been making regular imports of substantial amounts and it is only in miniscule percentage of cases that the Company failed to submit proof of imports against 10 remittances, in the interest of justice the penalty under section 13(1) of FEMA 1999 is reduced to Rs. 5,00,000/- (Rupees Five Lakhs Only). The amount already paid by the Appellant Company as pre-deposit of penalty vide demand draft dated 27-2-2018 is to be fully adjusted against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out in the Show Cause Notice and therefore, imposed penalty of Rs. 1,00,000/- each on Sarv/Shri Nihal Kaviratne, Amit Jain, R. Gopalakrishan Sanjiv Mishra. 4. This Tribunal vide the orders dated 23-2-2018 1-8-2018 disposed of the applications for waiver of the pre-deposit of the penalty by directing the Appellant Company to pay a sum of Rs. 5,00,000/- as pre-deposit of the penalty imposed on them under the impugned order. The Tribunal noted that three of the four Directors were appointed subsequently to the occurrence of the transactions in question and hence the pre-deposit of penalty was entirely waived off for each of the four Directors. 5. The appellants have pleaded in the appeal to set aside the impugned order dated 30-1-2015 and to quash the penalties imposed on the appellants. The main ground taken by the appellants for the appeal is that the Show Cause Notice suffers from serious latches as it has been issued after 12 years of the initial detection of the case by the respondent. They have pleaded that they were under the impression that the matter had been closed because of the prolonged silence on the part of the said Authorised Dealer as well as the Enforcement Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these directives were not received by them. He stated that the appellants have failed to provide proof for shifting of offices. He distinguished the present case from those referred in the judgments submitted by the Learned Counsel for the Appellants. Learned Counsel for the Respondent submitted a copy of the judgment dated 23-5-2006 of the Hon'ble Supreme Court in [Civil Appeal No. 9523-9524 of 2023, SEBI v. Shriram Mutual Fund [2006] 68 SCL 216 (SC). 8. I have given due consideration to the pleadings in the appeal, replies and written submissions filed, Adjudication Order and to the arguments of the two sides made during the hearings. It is patent that the enquiries were initiated by the Enforcement Directorate upon receipt of an information from Reserve Bank of India vide letter dated 8-8-2002 that certain importers had failed to submit documentary evidence as proof of imports for remittances made from Deutsche Bank, Tolstoy Marg, New Delhi, which was the Authorised Dealer (AD). The Respondent issued directives on 8-12-2002 to the Appellant Company, to which there was no response from them. The AD informed on 16-12-2002 that for 11 remittances the documentary evidence in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8-12-2002. They were issued directive again on 21-4-2003 by the Respondent. However, the Appellants did not respond. To yet another directive on 8-7-2012 the appellants chose to remain silent. Under such circumstances the appellants cannot take refuge under the plea of latches. It is to be noted that the appellants have chosen to respond to the Enforcement Directorate and join the enquiry after Show Cause Notice was issued to them on 31-3-2014. They have failed to explain that how they could receive the Show Cause Notice when previously the three communications from the Directorate to them remained unanswered. Their plea that the passage of long time prevented them from submitting proofs of imports against the reported remittances does not cut much ice given that in spite of having been put to notice they could not keep the safe custody of the documents relevant to dispute in hand. It is surprising that a Company which was importing on regular basis could not even produce alternative documents to sustain their contentions that for the remaining 10 remittances they had in fact imported goods. It is important to note here that the Adjudicating Authority has in his impugned order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 amount is quantifiable, or up to two lakh rupees where the amount is not quantifiable, and where such contravention is a continuing one, further penalty which may extend to five thousand rupees for every day after the first day during which the contravention continues. Thus, there is nothing in the Section which can indicate directly or indirectly requirement of mens rea. Words like willful , deliberately , intentionally etc. are missing. The Hon'ble Supreme Court in the Judgment supra have cited the judgment in Director of Enforcement v. MCTM Corporation (P.) Ltd. 1996 taxmann.com 805 (SC) [Manu/SC/0300/1996, dated 19-1-1996] wherein even for FERA 1947 it was held that the contravention shall be breach of a civil obligation which would attract penalty irrespective of the fact whether the contravention was made with any guilty intention or not. The Judgment supra cited a number of previous judgments wherein it was held that mens rea is not an essential element for imposing penalty for breach of civil obligations. His Lordships have clar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the petitioner therein. The third judgment State of Punjab v. Bhatinda District Coop. Milk Producers Union Ltd. [2007] 11 SCC 363 cited by the Learned Counsel for the Appellants, the Hon'ble Court stated that statutory authority must exercise jurisdiction within a reasonable period even if no period of limitation has been prescribed under the statute. The Hon'ble Court has gone on to state that what should be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors. In fact these very factors have been taken into consideration for the present appeal. 15. The fourth judgment Innovative Tech Pack Ltd. v. Special Director of Enforcement 2017 SCC OnLine Del 6485/[2017] 78 taxmann.com 156 (Delhi) cited by the appellants has facts which are not the same as those of the present appeal. In fact in the cited case, it appears that for the 3 remittances in question the appellant had placed on record the Bills of Lading, yet the Adjudicating Authority and the Appellate Tribunal issued the order against the appellants therein. On the other hand, in the present appeal for 2 out of 12 remittances the appellant had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o notice through sending the directives thrice, of which the first one was issued within four months of the receipt of information from the RBI. The Appellants did not respond to any of these directives. Such inactivity and inaction on the part of the Appellants takes the case out of the clutches of the principle of laches. The sixth case Tamil Nadu Housing Board Chennai v. M. Meiyappan [2010] 14 SCC 309 on the principle of laches is also not applicable to the facts of the present appeal. 17. Learned Counsel for the Appellants has cited Raj Kumar Shivhare v. Asstt. Director, Directorate of Enforcement[2010] 4 SCC 772/[2010] 100 SCL 211 (SC) which does not appear to be relevant to the dispute at hand in the present appeal as the cited judgment has held that FEMA is a complete code in itself. The statutory scheme under section 34 of FEMA is to exclude the jurisdiction of the civil courts. His Lordships have further held that when a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation. The eighth citation of Learned Counsel for the Appellant is Karnataka Rare Earth v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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