Dr. C. Manoharan & Ors. Vs Special Director (Appellate Tribunal Under SAFEMA Delhi)
Tribunal Partly Relieves Family, Cuts FEMA Penalties: Hawala & Undervaluation Charges Proven Against Manoharan & NTPL
The Appellate Tribunal under SAFEMA/FEMA decided four connected appeals arising from a major case of undervaluation of imports, hawala remittances & Customs evasion, involving Dr. C. Manoharan, Nitish Tools Pvt. Ltd. (NTPL), Smt. M. Thenmozhi, & Smt. C. Lakshmi. The Enforcement Directorate had imposed penalties of ₹2 crore on Dr. Manoharan, ₹5 crore on NTPL, & ₹10 lakh each on the two female directors u/s 3(b) of FEMA read with Section 42.
ED’s case-supported by DRI, CBI & PMLA investigations-established that Manoharan & his companies imported carbide tips & drill rods from China using parallel invoices, systematically undervaluing consignments & making illegal hawala payments of ₹63.43 crore for NTPL & ₹52.51 crore for SSE/NTPL to overseas suppliers. Evidence recovered from Manoharan’s seized laptop-contracts, dual invoices, e-mails with suppliers, hawala receipts, TT copies, & deleted files-confirmed that the declared prices were suppressed nearly twelve-fold, with the balance remitted through a hawala operator named “Sunil” in Coimbatore.
Manoharan’s own detailed statements under Customs Act (Section 108), FEMA (Section 37) & PMLA (Section 50) described the method of undervaluation, the arrangement with Chinese suppliers, the mode of cash delivery to Sunil, & the generation of unaccounted cash through downstream sales. These statements were corroborated by bank records, tax returns of connected entities, DRI witnesses, & statements of his wife, mother-in-law & father-in-law. The Tribunal rejected the arguments on coercion, retraction, & non-compliance with Section 65B / 138C, holding that Section 39 of FEMA overrides & allows reliance on seized electronic evidence. Judicial precedents such as Vinod M. Chitalia & K.T.M.S. Mohamed were applied to uphold the evidentiary value of corroborated statements.
