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Garments India Exporters v/s Director of Enforcement

Company & Directors' Information:- J J EXPORTERS LTD [Active] CIN = L17112WB1972PLC028631

Company & Directors' Information:- K S V EXPORTERS PVT LTD [Active] CIN = U52201KL1991PTC006093

Company & Directors' Information:- C K EXPORTERS PRIVATE LIMITED [Converted to LLP] CIN = U74899DL1983PTC015092

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- K C D EXPORTERS PRIVATE LIMITED [Strike Off] CIN = U52599TN1996PTC035117

Company & Directors' Information:- EXPORTERS (INDIA) LIMITED [Active] CIN = U51109MH1949PLC007061

Company & Directors' Information:- R K D EXPORTERS PRIVATE LIMITED [Strike Off] CIN = U51909PB1995PTC017237

Company & Directors' Information:- B AND L EXPORTERS PVT LTD [Strike Off] CIN = U51909KL1994PTC007825

Company & Directors' Information:- C S A EXPORTERS PVT LTD [Strike Off] CIN = U51909CH1983PTC005685

Company & Directors' Information:- J S S EXPORTERS PRIVATE LIMITED [Strike Off] CIN = U51909TZ2005PTC011860

Company & Directors' Information:- B R EXPORTERS PRIVATE LIMITED [Strike Off] CIN = U99999MH1973PTC016377

Company & Directors' Information:- EXPORTERS (INDIA) LIMITED [Dissolved] CIN = U99999MH1941PTC003430

    APPEAL NO. 49 OF 2003

    Decided On, 13 July 2004

    At, Appellate Tribunal For Foreign Exchange New Delhi

    By, O.P. NAHAR

    Mahendra Singh for the Petitioner. T.K. Gadoo for the Respondent.

Judgment Text

1. This appeal is against Adjudication Order No. DD/MAS/87-88/89(SS) dated 13-12-1999 passed by Deputy Director, Directorate of Enforcement imposing a penalty of Rs. 90,000 against the appellant firm (hereinafter called first appellant) and Rs. 50,000 against appellant Shri K.M. Abdul Jaleel, managing partner of the first appellant (hereinafter called second appellant) for the reasons that the two appellants failed to take reasonable steps for repatriation of the export proceeds of (i) GR No. 064297 of US $ 1382.40 and (ii) GR No. 064295 of US $ 8461.20 in contravention of provisions of section 18(2) read with section 18(3) of FERA, 1973. The learned counsel Shri Mahendra Singh stated that delay in filing of this appeal has already been condoned by order dated 14-7-2003 passed by this Tribunal and 10% of the penalty is deposited as pre-deposit in accordance with the order dated 14-7-2003 passed by this Tribunal. As pre-deposit of the penalty has already been made in accordance with the directions of this Tribunal so this matter is taken up for hearing on merits.

2. According to the counsel Shri Mahendra Singh the goods exported were not sold and kept lying in the foreign market due to change of fashion and there is no sale of such goods hence question of repatriation of export proceeds does not arise in the facts of this case. Further, it is argued that the second appellant made personal visit to the foreign land twice to persuade the foreign buyer to remit the export proceeds and this can be termed as more than reasonable. Despite this effort adjudicating authority has unreasonably held the appellants guilty against 2 Show-Cause Notices No. T.4/30-M/96(SCN) dated 7-11-1996 and T.4/39SZ/CLT/99 dated 1-7-1999.

3. Despite sufficient opportunity given nothing is shown on record wherefrom it can be claimed that the exporter has made reasonable efforts for repatriation of the goods. As per the provisions of sub-section (3) of section 18 there is presumption against the exporter unless it is proved that he made reasonable efforts for repatriation of the export proceeds. This presumption has not been rebutted in a sufficient manner and two visits alone cannot rebut this statutory presumption. Moreover visit alone without linking such visit to the question in hand cannot displace the statutory presumption. In this situation it is difficult to find fault with the adjudication order and it is liable to be sustained and affirmed so far as arriving of the guilt of the first appellant is concerned.

4. First appellant is a partnership firm and second appellant is a partner of the same. The partnership firm is not a corporation having separate legal personality. This Tribunal has time and again held that penalty cannot be imposed simultaneously against the partnership firm as well as partner till fastening of guilt against such partner as per facts of the case is clearly available. No such facts have been brought to light by Shri T.K. Gadoo. Hence, the arriving of guilt and imposition of penalty against the second appellant is liable to be quashed and set aside.

5. For the reasons recorded hereinabove the arriving of guilt against the appellant M/s. Garments India Exporters is liable to be sustained and the order is passed accordingly. The amount involved in non-repatriation is quite substantial, therefore, the penalty imposed of Rs. 90,000 cannot be taken as excessive. This amount of penalty is sustained. Howsoever, penalty of Rs. 50,000 imposed against the partner Shri K.M. Abdul Jaleel including arrival of guilt against him is quashed and set aside.

6. This appeal is partly allowed so far as

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appellant Shri K.M. Abdul Jaleel is concerned but appeal by M/s. Garments India Exporters is dismissed. The first appellant is permitted to make deposit of the remaining penalty after adjustment of pre-deposited amount within 60 days from the receipt of this order failing which respondents are permitted to recover the same in accordance with the law. The pre-deposited amount may be appropriated towards penalty.