2005 (98) ECC 14 (ATFFE)

APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE

New Delhi

Shri O.P. Nahar, Acting Chairperson

Dolly Farms and Resorts Pvt. Ltd.

Versus

Director of Enforcement

Appeal No. 97 of 2003

[Against Adjudication Order No. ADJ/63/DZ/2003/AD(SRB) dated 20.2.2003 passed by Asstt. Director of Enforcement, New Delhi]

Order dated 26.8.2004, Certified on 14.9.2004

Foreign Exchange Regulation Act, 1973

Section 9(1)(c) and 9(1)(a) r/w Section 68(1) -- Penalty -- Penalty amount is correlated in whatever way it is possible against the fault or guilt committed by the contravener of the provision of law.

Foreign Exchange Regulation Act, 1973

Section 9(1)(c) and 9(1)(a) r/w Section 68(1) -- Penalty of Rs. 60,000 imposed on the appellant company who was an artificial person but two other individuals who worked on behalf of the appellant penalized with an amount of Rs. 10,000 each -- The amount of penalty was required to be reduced so that the excessive part goes out -- Appeal partly allowed and penalty against the appellant reduced to Rs. 15,000 but otherwise the impugned order sustained and maintained.

PRESENT :

Shri A. Acharjee, Advocate for the appellant.

Shri A.C. Singh, ALA for the respondent.

ORDER

This order of the Appellate Tribunal for Foreign Exchange is delivered by O.P. Nahar, Acting Chairperson.

This appeal is filed against Adjudication Order No. ADJ/63/DZ/2003/AD(SRB) dated 20.2.03 passed by Asstt. Director, Enforcement Directorate imposing a penalty of Rs. 60,000 for contravention of provisions of section 9(1)(c) & 9(1)(a) r/w 64(2) and 68(1) of FERA, 1973.

2. The appellant has admitted the alleged contravention but argued on quantum of penalty stating that Rs. 60,000 is imposed on the appellant company who is an artificial person but two other individuals who worked on behalf of the appellant are penalized with an amount of Rs. 10,000 each. According to the counsel the penalty amount cannot exceed the proportion of guilt and both the two are required to be correlated. There should be a clear correlation between the fault and amount of penalty. Shri A.C. Singh, ALA is unable to counter these arguments. It is well settled in law that penalty amount is required to be correlated in whatever way it is possible against the fault or guilt committed by the contravener of the provisions of law.

3. The appellant company has already deposited Rs. 15,000 as pre-deposit in accordance with order dated 9.1.04 passed by this Tribunal which comes to 25% of the penalty imposed in the adjudication order.

4. Looking towards the totality of the facts the amount of penalty of Rs. 60,000 is required to be reduced so that the excessive part goes out. It appears appropriate to reduce the amount of penalty against the appellant to Rs. 15,000 which will serve the ends of justice. The amount of pre-deposit made with the respondent may be appropriated towards the penalty amount subject to aforesaid. This appeal is partly allowed and penalty against the appellant is reduced to Rs. 15,000 (Rupees fifteen thousand only) but otherwise the impugned order is sustained and maintained.