UNION OF INDIA Vs. S RAMAKRISHNAN

JUDGEMENT

(1.) APPEAL filed under Section 54 of the Foreign Exchange Regulation Act 1973 read with Sections 35 and 49 of the Foreign Exchange Management Act,1999 against the order passed in allowing the Appeal and setting aside the charge and order of penalty by the Appellate Tribunal for Foreign Exchange, New Delhi (hereinafter referred to as Appellate Tribunal), dated 09. 10. 2003 in Appeal No. 137 of 2003.

(2.) THE brief facts of the case are as follows:-2. 1. A charge was issued for contravention of Section 82 r/w. Section 18 (3) of the Foreign Exchange Regulation Act,1973 (for short 'fera') by the Deputy director Enforcement, Chennai. The second respondent exported garments in the year 2000 and failed to realise proceeds to the tune of US Dollars 52,739. 46 within the prescribed time limit and thereby contravened the provisions of section 18 (2) of the Act. The Director of the Company is liable for the conduct of the business of the Company during the relevant period. A show cause notice was issued to the respondents, however, they did not file any reply statement. 2. 2. The adjudication proceedings were held against the noticees and on close of the enquiry, the noticee Company was found guilty of the charges. The Director was found guilty invoking Section 68 (1) of the Act. Hence, a consolidated penalty of Rs. 5/- Lakhs was imposed on them. The respondents carried the matter in appeal before the Appellate Tribunal for Foreign Exchange, New Delhi in appeal No. 137 of 2003. The Appellate Tribunal allowed the appeal observing that it could not be stated that the provisions of the Act have been contravened, that even though FERA was replaced by Foreign Exchange Management Act (for short 'fema'), the offences stated to have been committed during the period covered by the FERA, proceedings could be initiated under FERA and failure to invoke of fema cannot be stated to be illegal and that these respondents' Company has taken sincere steps to realize the proceeds as required by the statute and so, the respondents could maintain appeal. The said order of the Appellate Tribunal has been challenged before this Court in this appeal.

(3.) IN order to have a thorough glance of the matter, it is profitable to extract Sections 18 (2) and (3) of FERA.