DIRECTORATE OF ENFORCEMENT Vs. A.K. MITTAL

JUDGEMENT

(1.) A memorandum dated 22.3.2002, was issued by the Special Director, Enforcement Directorate, to the reskpondents, Rajasthan Petro Synthetics Ltd. (hereinafter referred to as "the Company"), Mr. G.P. Poddar, Managing Director of the Company, Mr. A.K. Mittal, Executive Director of the Company and Mr. B.B. Verma, Manager of the Company, alleging therein that during 1985-1988 they had imported pigment preparations and not PP Dyed Chips which was the import item declared by the Company and the price for the said import were negotiated by Mr. G.P. Poddar and Mr. A.K. Mittal. Reference in this regard was made to the statement made by Mr. B.B. Verma on several dates under Section 40 of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as "the Act"). Alleging contravention of Section 8(3)(4) of the Act and also alleging that S/Shri G.P. Poddar, A.K. Mittal and B.B. Verma were the persons responsible/supervisor/in-charge of the Company for conduct of its business at the relevant time when the import was made, they were required to show cause as to why adjudication proceedings as contemplated in Section 51 of the Act should not be held against them, for the aforesaid contravention.

(2.) Vide order dated 26.10.2006, the Special Director of Enforcement, holding them guilty of contravention of Section 8(3) & 8(4) read with Section 68(1)&(2) of the Act, imposed penalty of Rs.8.00 lakh upon the Company, Rs.2.00 lakh each on Mr. G.P. Poddar and Mr. A.K. Mittal and Rs.50,000/- on Mr. B.B. Verma.

(3.) While imposing penalty, the Special Director inter alia took note of the fact that Mr. G.P. Poddar, Managing Director of the Company in his statement dated 18.11.1993 had stated that they had placed order for import of P.P. Dyed Chips during the period Mr. A.K. Mittal was the General Manager and Mr. B.B. Verma was the Manager (Imports) and as per the procedure Mr. Mittal was the person to approve the purchase bill though wherever required he used to consult his superiors such as another Director, Mr. Kedia or the Managing Director, Mr. G.P. Poddar. In the said statement, Mr. Poddar had also stated that P.P. Dyed Chips were virgin P.P. Polymers (major component) and pigment (minor component). It was further stated by Mr. Poddar in the aforesaid statement that the prices of pigment preparation could be higher than that of P.P. Dyed Chips though and in the opinion of Mr. Poddar P.P. Dyed Chips and PP Chips should be classified under same tariff, though he had no idea of pigment preparation.