NAZNEEN Vs. DIRECTOR OF STORE ENFORCEMENT

JUDGEMENT

(1.) THESE three appeals have been filed under Section 54 of the Foreign Exchange Regulation Act, 1973 ( for short 'the Act of 1973') read with Section 35 of the Foreign Exchange Management Act, 1999( for short 'the Act of 1999'), by M/s Taiyabi Khilona Store and its two partners, being aggrieved against the judgment and order dated 21.11.2007 passed by the Appellate Tribunal for Foreign Exchange in Appeal Nos. 71/05, 72/05 and 73/05. These three appeals have been preferred because of the reason that the appellant -Firm and its partners have been held guilty for violation of the provisions of Section 18(3) of the Act of 1973 and penalty of Rs. 1,00,000/ - has been imposed upon the Firm and its two partners separately.

(2.) BRIEF facts of the case are that M/s Taiyabi Khilona Store, a partnership firm having its two partners Abas Ali and Smt. Nazneen exported goods through its courier M/s Container Movement (Bombay Transport Private Limited) to its buyer M/s PAK Britannnia Limited, London (England). The said goods were worth 16553. According to the appellants, the document relating to the said export work sent to the Bank in London on 6.2.1996 for collection. The bill in this regard was drawn on D.P. Basis, according to which the buyer can retire the documents by making payment to bank on reaching of the consignment at its destination. However, the buyer did not take the delivery of the goods and according to the appellant, the appellant made his all efforts to recover the sale proceeds. Since the buyer did not take the delivery of goods, therefore, the authorities at London confiscated the goods at London. In view of the above, according to the appellant, the sale was not affected as the goods were not taken by the buyer and for constituting a sale, it is necessary that seller sales the goods to the buyer and buyer receives the goods. Since the goods were auctioned by the authorities at London by exercising statutory power, therefore, it was not a sale of goods at all and, therefore, the authorities committed serious error of law by punishing the appellants with the penalty as mentioned above under the provisions of Section 50 of the Act of 1973.

(3.) THE learned Counsel for the appellants lastly contended that if it is held that the appellant -Firm was guilty under Section 50 and was liable to be penalized for its fault then the authorities have committed serious error of law by imposing penalty upon the Firm as well as upon the partners. According to the learned Counsel for the appellants, the Firm is a compodium of the individual and is not an entity akin to company which can have its own assets and liability irrespective of the assets liability of its Director. In addition to above, according to the learned Counsel for the appellants even if it is held that the any of the appellants, partner of the firm could have been held responsible for conduct of the business of the Firm then there is no finding that any of the partners himself was responsible for and was incharge of the activities of the Firm and because of lapse of that partners, the foreign currency has not reached to India.