PARVATHI TEXTILES Vs. DIRECTOR ENFORCEMENT DIRECTORATE

JUDGEMENT

(1.) This appeal by Messrs. Parvathi Textiles, is directed against the order dated 12-2-1975 passed by the Foreign Exchange Regulation Appellate Board in Appeal No. 73 of 1965, dismissing the appeal of the present appellants, on confirming the order dated 24-7-1965 passed by the Director of Enforcement against the present appellants.

(2.) Messrs. Parvathi Textiles is a partnership firm, of which, Sri V. Perumalchettiar is the active partner, the other two partners being merely sleeping partners. This firm was carrying on textile business and admittedly they exported two shipments of handloom silk, zari brocades and handicraft zari thread worth of Rs. 2,95,195 as per the declaration made by them in the relevant G.I.R. forms. They were issued licence on condition that they should credit the proceeds in foreign exchange within six months in the prescribed manner. It appears that thereafter, they got the time for credit extended by the Reserve Bank of India till the end of 31-12-1963. But inspite of it they did not credit a single pai. The Assistant Director Enforcement Directorate, Ministry of Finance, Government of India, called for information by issuing directive under S. 19(2) of the Foreign Exchange Regulation Act, 1947 to which the present firm inter alia replied thus :

(3.) The firm appeared before the Director, Enforcement Directorate, New Delhi and at the hearing which took place at Madras on 14-7-1965 Sri N. C. S. Raghavan, Advocate and Chartered Accountant appeared for the firm and pleaded guilty to the charge. Accordingly, the Director accepting the plea of N. C. S. Raghavan found M/s. Parvathi Textiles and its partner Sri V. Perumal Chettiar, guilty of having contravened the provisions of S. 12 (2) of the Foreign Exchange Regulation Act, 1947. As regards the other two partners namely, Sri Krishnaraj and Smt. S. Venkatalakshmi they were accepted as mere benamidars of Sri V. Perumal Chettiar ; they were not aware of the transactions nor they were benefited by the exports. The Director giving them benefit of doubt, acquitted them.