ASHOK K PARASHRAMKA Vs. UNION OF INDIA

JUDGEMENT

(1.) Appellate Authority for Foreign Exchange has, by the two orders impugned in this petition, declined to waive the pre-deposit of the amount of penalty levied against the petitioners in terms of Sections 18 (Payment of exported goods), 50 (Penalty) and 51 (Power to adjudicate) of the Foreign Exchange Regulation Act, 1973 read with sub-sections 3 and 4 of Section 49 of the Foreign Exchange Management Act, 1999. Aggrieved the petitioners have assailed the validity of the said orders apart from challenging the vires of the Constitution 39th Amendment Act, 1975 and Sections 18(2), (3), 40(4), 56 and 59 of FERA, 1973. The controversy arises in the following circumstances.

(2.) A memorandum dated 3rd May, 2002 was issued by the Enforcement Directorate, Ministry of Finance to M/s Panchamukhi India Pvt. Ltd. whereby the latter and its directors Messrs Mahesh Phool Modi and Ashok Kumar Parashramka were called upon to show cause as to why adjudication proceedings as contemplated in Section 51 of the FERA, 1973 read with Section 49 of FEMA be not initiated against them for their failure to take any action to secure the receipt of export proceeds to the tune of US$ 5,19,338.60 being the value of goods supplied by them to M/s Golden Impex Trading Company, UAE, Dubai. The memorandum inter alia pointed out that the noticees had failed to take/refrained from taking any action and all reasonable steps necessary to secure the export proceeds of the aforesaid amount in the prescribed manner within the stipulated period without the permission of the Reserve Bank of India which was tantamount to a contravention of the provisions of Section 18(2) of FERA, 1973 read with Central Government notification dated 1st January, 1974 issued on the subject.

(3.) The adjudication proceedings initiated in pursuance of the above memorandum culminated in an order dated 26th December, 2003 passed by the adjudicating authority levying a penalty of Rs.20 lacs on the company M/s Panchmukhi India Pvt. Ltd. and Rs.4 lacs each on Sh. Mahesh Phoolchand Modi and Mr.Ashok Kumar Parashramka, its directors. The adjudication order recorded, among others, the following findings: