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TMI Blog2023 (5) TMI 1384X X X X Extracts X X X X X X X X Extracts X X X X ..... rore only) imposed by the Adjudicating Authority on the respondent Shri Kaluram B. Proprietor of M/s. Spring Infotech for contravention of provisions of FEMA 1999 and Regulation thereunder involving amount of Rs. 20,62,94,201/- (Rupees Twenty Crore Sixty Two Lakh Ninety Four Thousand Two Hundred and One only). Penalty of Rs. 21,00,00,000/- comprises of Rs. 10,50,00,000 (Rupees Ten Crore and Fifty Lakhs only) for the contravention of the provisions of Section 10(6) of FEMA, 1999 r/w Regulation 6(1) of Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 and Rs. 10,50,00,000 (Rupees Ten Crore and Fifty Lakhs only) for the contravention of the provisions of section 3(b) of FEMA, 1999. It h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipation of the Respondent during the investigation and the Adjudication Proceedings. It appears that the respondent had opened an account with M/s. IndusInd Bank, Nungambakkam, Chennai. He successfully made outward remittances in 39 tranches totaling Rs. 20,62,94,201/- abroad in the guise of advance for imports. It was found that RTGS deposits were made in the said account which were immediately followed by 39 tranches of outward remittances to various entities abroad. In the documents the purpose which is mentioned for the outwards remittances is advance towards imports. The data obtained from the Customs data base showed that no import had taken place. The Adjudicating Authority made a finding that the said outward remittances were in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in exercise of the powers under this Act, or contravenes any condition subject to which an authorisation is 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." 6. On reading of Section 13(1) FEMA it is obvious that the maximum amount of penalty which can be imposed under the Section is three times the amount of contravention involved. From the language of the Section it is clear th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slightly over fifty percent thus totaling a penalty of over hundred percent. Any insistence to impose higher penalty for contraventions of each of the Section arising from the same set of transactions may introduce element of subjectivity. In any case, there is no such requirement under the statute as long as each contravention has been examined and if found established has attracted penalty. The reading of the Adjudication Order, therefore, reflects objectivity and judiciousness on the part of the Adjudicating Authority. 8. The Hon'ble Supreme Court in State of MP v. Bharat Heavy Electricals [1998 taxmann.com 1267/[1998] 99 ELT 33 (1997) 7 Supreme Court Cases 1] in its order dated 14-8-1997 held that in a statute prescribing the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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