Appeal against penalty for contravention of FEMA 1999. Tribunal held no material proved the Customs Clearance Agent committed contravention under Sections 3(b) and 3(d). Penalty set aside; appeal allowed.
Impugned order imposing penalty of Rs.5,00,000/- set aside; appeal allowed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
FPA-FE-15/MUM/2011
Manoj Arjun Gore … Appellant
Versus
Special Director Directorate of Enforcement, Mumbai … Respondent
Advocates/Authorized Representatives who appeared
For the Appellants : Shri Naveen Malhotra, Shri Ritnik Malhotra, Advs. For the Respondent : Shri Sunder Kumar, Shri Varun Mishra, Shri Divanshu, Advs.
CORAM
JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI V. ANANDARAJAN : MEMBER
FINAL ORDER 04.03.2025
FPA-FE-15/MUM/2011
By this appeal, a challenge has been made to the order dated 21.01.2011 passed by the Special Director of Enforcement. The penalty of Rs.2,00,000/- has been imposed on the appellant for contravention of Section 3(b) and Rs.3,00,000/for contravention of Section 3(d) of the Foreign Exchange Management Act, 1999 (in short `the Act of 1999’).
FPA-FE-15/MUM/2011
Page 1 of 4
Section 3(b) and 3(d) of the Act of 1999. The allegation for contravention of the provisions aforesaid may exist against those who were involved in export and made transaction in the foreign currency. Special Director of Enforcement imposed the penalty against the appellant without any contravention on his part to Section 3(b) and 3(d) of the Act of 1999. In fact, being Custom Clearance Agent, he was getting only remuneration. One Vinod Chitalia was getting 15% of the DEPB amount for clearance of substituted material to Shri Nikunj Kanakia and alleged to have given 9% of DEPB to the appellant. It would not make out a case for contravention of Section 3(b) and (d) of the Act of 1999.
FPA-FE-15/MUM/2011
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against the appellant and thereby interference in the impugned order may not be made.
“3. Dealing in foreign exchange, etc.
- Save as otherwise provided in this Act, rules or regulations made thereunder, or with the general or special permission of the Reserve Bank, no person shall-
(a) xxx
(b) make any payment to or for the credit of any person resident outside India in any manner;
(c) xxx
(d) enter into any financial transaction in India as consideration for or in association with acquisition or creation or transfer of a right to acquire, any asset outside India by any person.
Explanation. - For the purpose of this clause, financial transaction means making any payment to, or for the credit of any person, or receiving any payment for, by order or on behalf of any person, or drawing, issuing or negotiating any bill of exchange or promissory note, or transferring any security or acknowledging any debt”.
for the credit of any person resident outside India in any manner without compliances, as given under the Act, Rules and Regulation, a case would be made out. In the similar manner Section 3(d) makes out a case if one enters into any financial transaction in India as consideration for or in association with
FPA-FE-15/MUM/2011
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acquisition or creation or transfer of a right to acquire, any asset outside India by any person.
(Justice Munishwar Nath Bhandari) Chairman
(V. Anandarajan) Member
New Delhi, 4th March, 2025
‘srd’
FPA-FE-15/MUM/2011
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3 issues framed by the court
Whether the Customs Clearance Agent committed a contravention under Section 3(b) and 3(d) of the Foreign Exchange Management Act, 1999 by receiving commission for processing export documents.
Whether evidence collected by the Directorate of Enforcement establishes sufficient material to sustain the penalty imposed on the appellant.
Whether the penalty imposed on the appellant should be upheld or set aside due to lack of material proving contravention.
2 provisions across 1 enactments
Manoj Arjun Gore
Special Director Directorate of Enforcement, Mumbai
Munishwar Nath Bhandari
V. Anandarajan
As recorded by the court registry
2 orders share this CNR
Judgements on the same questions, provisions and authorities, from every court
