Amisha International Vs Joint Director (Appellate Tribunal Under Safema At New Delhi)
Diversion of Duty-Free Imports Leads to FEMA Breach – Tribunal Cuts Penalty to ₹6 Lakh- Money is an Asset under FEMA: Tribunal Upholds Contravention, Grants Partial Relief to Exporter
Amisha International, a 100% Export Oriented Unit (EOU), filed appeal against the order dated 28.09.2016 passed by the Joint Director, Directorate of Enforcement, Bangalore, imposing a penalty of ₹6,00,000 each for contravention of Sections 3(b) & 3(d) of the Foreign Exchange Management Act, 1999 (FEMA). Earlier, the Tribunal had waived pre-deposit considering the economic condition & poor health of Shri D.K. Jain, representative of the appellant.
The Enforcement Directorate initiated proceedings based on information from the Directorate of Revenue Intelligence (DRI) alleging that the appellant diverted duty-free imported silk yarn into the domestic market & fraudulently exported consignments of bricks & silk waste in the guise of “powder-grade silk yarn” to M/s Seven Star General Trading Co., Ajman (UAE). The DRI intercepted one such container at Cochin Port revealing bricks wrapped in textile waste instead of silk yarn. Shri D.K. Jain, in his statements before the DRI, admitted having shipped four such fraudulent consignments.
The Adjudicating Authority held that the appellant received inward remittances from the UAE firm through banking channels against these fraudulent exports & simultaneously made unauthorized payments in India to acquire foreign exchange abroad, thereby contravening Sections 3(b) & 3(d) of FEMA.
