Page 121 - ELT_1_1st April 2020_Vol 372_Part

2020 ] SUBORNO BOSE v. ENFORCEMENT DIRECTORATE 7

been taken till 2005 either to take delivery of the goods so imported and warehoused
or for taking necessary extension/approval from RBI/authorized dealer. As far as
the change in management of the company is concerned, the change took place in
late 2001 but even after the change in management, the then Chairman, Sh.
Anirudh Rai Choudhary, remained Director of the new company up to 2004, as is
mentioned in the annual report for the year 2003-04, a copy enclosed with the ap-
peal petition. The Managing Director of the changed company was well aware of
the goods so imported and warehoused as a reply were submitted to the Enforce-
ment Authorities as early as in July, 2002.
9. As far as financial constraints are concerned it is seen from the MOU, dated
22-10-2001 that the appellant company was transferred from the old management
to the new management after the shares were transferred for about six crores of ru-
pees. From the annual report for the year 2003-04, it is seen that loans of Rs. 7.33
crores were taken and invested a capital work-in-progress shown at Rs. 13.07
crores. The company also advanced Rs. 1.20 crores. Substantial investment was
made in the capital work including air conditioners, furniture and electrical instal-
lation, etc., etc. In spite of availability of sufficient funds during this period the ap-
pellant company did not take any step to take delivery of the imported goods which
are lying in the warehouse since 2000. Note was given in Schedule 11 to the annual
accounts that the liability against bank guarantee and Customs duty in respect of
import of air conditioning plant was not provided in the accounts. The sequence of
such events clearly show that the appellant company and its Managing Director
responsible for running the company did not take reasonable steps of delivery of the
imported goods so warehoused and thereafter to submit bill of entry to the author-
ized dealer.
10. It is therefore evident that the appellants did not comply with the re-
quirements of Section 10(6) of FEMA, RBI regulation, dated 3-5-2000 and
Circular, dated 24-8-2000, supra. Even when the show cause notice was is-
sued by the AA steps were not taken to take delivery of the goods from the
warehouse and to submit the bill of entry to the authorized dealer. It is
therefore held that the appellant company is guilty of contravening these
provisions of FEMA and guidelines issued by the RBI supra. The AA is jus-
tified in imposing the penalty of Rs. 10 lakhs on the appellant company
which is confirmed. The appeal filed by the appellant company is accord-
ingly dismissed.
11. As far as the other appellant is concerned Sh. Suborno Bose was the Manag-
ing Director and responsible for the conduct of business of the company. He is so
guilty of contravention of provisions of FEMA and guidelines of RBI thereof, su-
pra. It is therefore held that AA is justified in imposing the penalty of Rs. 10 lakhs
on the appellant Managing Director which is confirmed. The appeal filed by the
Managing Director is accordingly dismissed.
12. The Ld. Counsel has referred to certain decisions under Excise and
Custom Act. These cases have not been discussed as the violation under
FEMA and RBI guidelines depends on the facts of each individual case. The
appeal being decided on the merits of the case under consideration.
13. It is necessary to mention here that the foreign exchange was remitted
in 2000, the goods were imported in 2000 and were warehoused in 2000
when Sh. Anirudh Rai Choudhary, was the then Chairman of the company.
He remained Chairman till October, 2001 when the management changed
as per MOU. Sh. Anirudh Rai Choudhary remained Director of the new
EXCISE LAW TIMES  1st April 2020  169