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TMI Blog2025 (3) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... rigours of law with respect to their failure in realization of the pending export proceeds with respect to the 07 GRs totaling USD 3,93,094.63 as mentioned above. We observe that with respect to the 07 GRs for amount of USD 3,93,094.63, the statutory period of six months for realization and repatriation of the full export value of the goods exported had expired between 02.05.2000 to 13.08.2000, that is much before the date of resignation of the two Appellants w.e.f. 01.09.2000. The pleadings made with respect to the efforts of contacting the buyers through letters, faxes and telephones etc. to be regarded as reasonable steps cannot be accepted as observed in the preceding paragraphs of this Order. Appellants too have failed to produce mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt : Shri Shoumendu Mukherji, Ms. Aninuddha Ghosh, Ms. Meghal Sharma, Advocates ORDER This Order disposes of the Appeal Nos FPA-FE-205/MUM/2010 and FPA-FE-206/MUM/2010 filed by Sh. Mehul Shah, Partner, M/s Rosecut Diamonds and Sh. Ashwin Shah, Partner, M/s Rosecut Diamonds ("Appellants") respectively. The Appellants have challenged the Order dated 20.08.2010 ("Impugned Order") issued by the Ld. Adjudicating Authority, Special Director, Enforcement Directorate, New Delhi. The Ld. Adjudicating Authority vide Impugned Order imposed penalty of Rs 50,00,000/- (Rs Fifty Lakhs Only) for the contravention of Section 7 and 8 of the Foreign Exchange Management Act, 1999 ("FEMA") read with Regulations 8, 9 and 13 of the Foreign Exchange Management ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. Ld. Counsel further pleaded that as per clause 3 of the said arrangement, the Appellants were estopped from acting directly or indirectly in the affairs of the partnership firm. Ld. Counsel pleaded that the other partner, one Sh. Ketan A Shah of M/s Rosecut Diamonds had taken all reasonable steps to realise and repatriate the export proceeds relating to the pending Export Bills. Sh. Ketan A Shah had taken all the steps to recover the proceeds pending against the Export Bills from the foreign buyers through letters, faxes, contacting the buyers through telephones etc. Sh. Ketan Shah had taken the steps to initiate legal proceedings in Hong Kong to recover the outstanding amount, however, the said proceedings could not be pursued d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that the provisions of FEMA r/w the said regulations were rightly invoked against the Noticees for their failure to take reasonable steps for realization and repatriation of the Export proceeds in respect of these GRs. In view of the statutory provisions of the Act, Ld. Adjudicating Authority has inferred that the provisions require the Exporter and not the Authorized Dealer to take the steps to realize and repatriate the proceeds of the Exports. Ld. Adjudicating Authority has examined the steps taken for the realization of the Export proceeds. In the absence of certain documents to corroborate the contention that the matter was pursued in Hong Kong Court which could not be furnished by the Exporter Noticee M/s Rosecut Diamonds and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th respect to their failure in realization of the pending export proceeds with respect to the 07 GRs totaling USD 3,93,094.63 as mentioned above. We observe that with respect to the 07 GRs for amount of USD 3,93,094.63, the statutory period of six months for realization and repatriation of the full export value of the goods exported had expired between 02.05.2000 to 13.08.2000, that is much before the date of resignation of the two Appellants w.e.f. 01.09.2000. 8. The pleadings made with respect to the efforts of contacting the buyers through letters, faxes and telephones etc. to be regarded as reasonable steps cannot be accepted as observed in the preceding paragraphs of this Order. We observe that Appellants too have failed to produce ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equally responsible for their failure to take steps to realize and repatriate the export proceeds." 10. In view of the aforementioned discussions and analysis, we find that the two Appellants, have contravened Section 7 and 8 of the FEMA, 1999 read with Regulations 8, 9 and 13 of the FEMA Regulations, 2000 read with Section 42(1) of FEMA, 1999 with respect to the 07 GRs of the amount USD 3,93,094.63. 11. We observe that the Ld. Adjudicating Authority has imposed penalty of Rs. 1,50,00,000/- on M/s Rosecut Diamonds for the contravention of Section 7 & 8 of FEMA r/w Regulations 8, 9 & 13 of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000. This penalty has been imposed for failure to realize and repatriate US ..... X X X X Extracts X X X X X X X X Extracts X X X X
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