Decided on March 05,2020

Suborno Bose Appellant


A.M.KHANWILKAR,J. - (1.)This appeal emanates from the complaint proceedings initiated by the adjudicating authority being Deputy Director, Enforcement Directorate Foreign Exchange Management Act, under Section 16(3) of the Foreign Exchange Management Act, 1999 (for short, "the FEMA Act").
(2.)A showcause notice dated 19.5.2004 was issued to the appellant, stating that the adjudicating authority was satisfied that there was a prima facie contravention of Section 10(6) of the FEMA Act read with Sections 46 and 47 of the said Act and paragraphs A10 and A11 (Current Account Transaction) of the Foreign Exchange Manual 200304 in the complaint filed against the company named M/s. Zoom Enterprises Limited (for short, "the Company") of which, the appellant was the Managing Director. The appellant filed his reply to the said showcause notice on 10.6.2004, inter alia, contending that the Company had purchased 2 Nos. of Water Cooled Screw Chiller Unit Model and other accessories for a cost of 374000 FRF from Carrier S.A. of France and Air Handling and Fan Coil Unit for US$ 35766 from Carrier Corporation, Syracuse, New York. The import was done under Export Promotion Capital Goods (EPCG) Licence under Open General Licence (OGL). The goods were imported, but kept in warehouse, as the Company, which at the relevant time was under Mr. Aniruddha Roy Chowdhury and others, failed to take steps to get the goods released. The appellant took over the project only in July, 2002 and afterwards, he spent nearly 5 crores of rupees for the project work. Due to financial constraints, in February, 2003, a request was made to Tourism Finance Corporation of India Limited (TFCI) for sanction of a bank guarantee of Rs.40,00,000/ (Rupees forty lakhs only) to get the shipment in question cleared from the Customs Department, but for the reasons beyond the control of the Company and the appellant in particular, the shipment could not be cleared. A request was made to the Customs authority to help the Company to get the goods cleared, in case the clearing agent is unable to take necessary steps on their behalf. In the end, a request was made in the reply to grant more time to get the goods cleared and to submit the Bill of Entry (Exchange Control Copy) with the authorised dealer.
(3.)The reply to the showcause notice filed on behalf of the Company including for the appellant and the submissions made before the adjudicating authority were duly considered by the adjudicating authority in its Order (Original) dated 30.12.2004. The adjudicating authority concluded that the noticee Company and the appellant had violated the provisions of Section 10(6) of the FEMA Act read with Sections 46 and 47 of the said Act read with paragraphs A 10 and A11 (Current Account Transaction) of the Foreign Exchange Manual 200304 having found that the goods had arrived in India, but the Company failed to submit Bill of Entry and did not take delivery of the goods. The import formalities would have had completed only after submission of Bill of Entry. Thus, though the goods for which foreign exchange was remitted had reached the destination of the users, but the same were not released and as such kept in bonded warehouse. That resulted in contravention warranting issuance of showcause notice to the Company and the appellant. Resultantly, the adjudicating authority passed the following order:

In view of my above findings, I hold M/s Zoom enterprises Ltd., and their Managing Director Sri Suborno Bose guilty of the charge. In exercise of powers conferred on me under section 13(I) of the Foreign Exchange Management Act, 1999. I impose on them the following amount of penalty.

1) M/s Zoom Enterprise Ltd. Rs.10,00,000/ Rupees Ten Lakhs

2) Sri Suborno Bose Rs.10,00,000/(Rupees Ten Lakhs)

The penalty amount so imposed in terms of the provisions of section 13(I) of the said Act shall be deposited in the office of the Deputy Director, Directorate of Enforcement, Calcutta by cheques/demand draft issued in favour of the Chief Enforcement Officer (Admn.), 3rd M.S.O. Building, 6th floor, C&D Wing, Salt Take, Calcutta 700064 within 45 days from the date of receipt of this order."


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