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TMI Blog2025 (4) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. to Rs. 10,00,000/- (Rupees Ten Lakhs Only) and Rs. 5,00,000/- (Rupees Five Lakhs Only) respectively. The Appeal to the Ld. Special Director had arisen from Adjudication Order dated 16.07.2010 issued by the Ld. Adjudicating Authority, Deputy Director, Enforcement Directorate, Ahmedabad in Order No. Adj/01/DD/RP/A/2010-FERA/1168 ("Adjudication Order"), whereby, the Ld. Adjudicating Authority had imposed penalty of Rs. 25,00,000/- (Rupees Twenty-Five Lakhs Only) and Rs 10,00,000/- (Rs Ten Lakhs Only) on M/s Vishal Exports Overseas Ltd. and Shri Pradeep S Mehta, Director, M/s Vishal Exports Overseas Ltd. respectively. Ld. Adjudicating Authority held that the Appellants were in contravention of Section 48 & Section 73(3) of the Foreign Exchange Regulation Act, 1973 ("FERA") read with Section 68(1) & 68(2) of FERA read with relevant Reserve Bank of India Circulars read with Section 64(2) of FERA read with Section 49(3) & 49(4) of Foreign Exchange Management Act, 1999 ("FEMA"). 2. This Tribunal vide order dated 18.04.2018 on the Applications for the waiver of the pre-deposit of the penalty amount held that since in the first Appeal penalty amount was reduced to the large extent, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder, which failed to deal with the specific contentions raised by the Appellants before the Ld. Special Director. Ld. Counsel relied on the decisions of the Hon'ble Supreme Court in Nestle India Ltd. versus Commissioner of Central Excise, Chandigarh, 2009 (235) ELT 577 (SC) and Commissioner of Central Excise, Mumbai versus Burroughs Wellcome (I) Ltd., 2006 (202) ELT 737 (SC) to buttress his arguments. Ld. Counsel prayed to allow the two Appeals and set aside the Impugned Order dated 06.03.2013. Ld. Counsel for the Appellants pleaded that this Tribunal in Appeal No. 738/2003 vide order dated 02.08.2007 has set aside the orders of the Adjudicating Authority with respect to 11 different Show Cause Notices issued to a shipping Company or maritime agency, which is carrier of goods charging them for abetment in the contravention of FERA provisions as invoked in the present case. 5. Ld. Counsel for the Respondent argued that investigations conducted by Enforcement Directorate, Ahmedabad revealed that the Appellant Company had effected shipment of 500 M.T.s of Wheat Flour valued at Rs. 70 Lakhs, as declared in the relevant export documents, such as Invoices, GR Forms, Packing Lists, Ship ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he material on record. We do not agree with the arguments that the impugned order issued by the Special Director (Appeals) is cryptic being without any reasonable justification for its inferences. First and foremost, it is to be noted that the impugned order has reduced the penalty amount imposed in the Adjudication Order dated 16.07.2010 substantially. The penalty of Rs. 25,00,000/- imposed on the Appellant Company VEOL has been reduced to Rs. 10,00,000/- and the penalty of Rs. 10,00,000/- imposed on the Appellant individual Sh. Pradeep S. Mehta has been reduced to Rs. 5,00,000/-. Ld. Special Director (Appeals) has observed that the penalty amounts have been reduced on consideration of the facts and circumstances of the case the same have been found to be excessive. Ld. Special Director (Appeals) has reiterated that despite numerous opportunities given in the course of Adjudication proceedings as well as in the Appeal proceedings, the Appellants have failed to establish that 500 MTs of Wheat Flour actually reached Russia which was required as per "Scheme of Export of Goods and Services against Repayment of State Credits granted by the erstwhile Soviet Union." Ld. Special Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to any authority or person for any purpose under this Act, give any information or make any statement which he knows or has reasonable cause to believe to be false, or not true, in any material particular. Section 73 (3) The Reserve Bank may give directions in regard to the making of payment and the doing of other acts by bankers, authorised dealers, money changers, stock brokers or other persons, who are authorised by the Reserve Bank to do anything in pursuance of this Act in the course of their business, as appear to it to be necessary or expedient for the purpose of securing compliance with the provisions of this Act and of any rules, directions or orders made thereunder." The relevant RBI circulars stipulate the terms of the Scheme of Export of Goods and Services against Repayment of State Credits granted by the erstwhile Soviet Union. 11. We observe that the Scheme was result of trade agreement between the Governments of India and Russia. The Central Banks of the two nations were made responsible for the implementation of the Scheme. It was imperative on the part of the Exporters and the Importers, who opted for the Scheme to ensure that the terms and conditions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following requirement is mentioned as Paragraph 2(vi) of the said RBI Circular dated 28.09.1993: - "Funds from repayments of State Credits are to be utilized for export of goods to Russian Federation only. No third country exports are permitted to be financed out of funds from such repayments of State Credits." 12. Ld. Counsel for the Appellant had cited the affidavits of the Chief Commissioner of Customs, the response of the Reserve Bank of India (RBI) and that of the DGFT. Ld. Adjudicating Authority has correctly pointed out that none of these relate to the responses after taking into account the peculiar circumstances entailed by the stipulations of the Schemes. Moreover, the requirements under different laws are separate and the Authority concerned have provided information in respect of the laws to which compliance is to be made by such Authorities. In this regard, the following paragraph 36 of the Adjudication Order dated 16.07.2010 brings out the scope of mis-interpretation 36. The advocate of VEOL & its Director Shri Pradip S. Mehta in his reply dated 06.02.2010 has also referred to a reply received by his clients from the RBI under the RTI Act. I have perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t requirements of RBI Circular were not fulfilled, which amounted to violation of FERA provisions, it was incumbent upon the exporter VEOL and other Noticees to submit documentary proof to show compliance of the RBI Circular governing the scheme of "Export of Goods & Services against Repayment of State Credits granted by erstwhile Soviet Union". Further, no provision of FERA / FEMA puts any bar or restriction on initiating adjudication proceedings by the Directorate of Enforcement, for any contravention, the compliance certificate given by the nominated Bank is of no consequence in these proceedings. 13. The arguments made by the Appellants that since they had exported the Goods on FOB basis, they had no control over the destination where Goods would be unloaded does not cut ice in the facts of the present matter. In view of the observation afore, it is clear that after having opted for the said Scheme they could not have agreed to adhere to only few terms of the Scheme and not to other terms. It is obvious that any exporter who did not want to take benefit of the Scheme is also required to realise the export proceeds in Foreign Currency directly from the foreign buyer. If the Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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