Page 125 - ELT_1_1st April 2020_Vol 372_Part

2020 ] SUBORNO BOSE v. ENFORCEMENT DIRECTORATE 11

warehouse and the Company took no steps to clear the same. As a result, Section
10(6) of the FEMA Act is clearly attracted being a case of not using the procured
foreign exchange for completing the import procedure. It is also possible to take
the view that the Company should have taken steps to surrender the foreign ex-
change to the authorised person within the specified time as provided in Regula-
tion 6 of the Foreign Exchange Management (Realisation, Repatriation and Sur-
render of Foreign Exchange) Regulations, 2000 (for short, “the FEMA Regula-
tions”) issued by the Reserve Bank of India. The said regulation reads thus :-
6. Period of surrender in certain cases : - (1) Any person who has ac-
quired or purchased foreign exchange for any purpose mentioned in the
declaration made by him to an authorised person under sub-section (5) of
Section 10 of the Act does not use it for such purpose or for any other pur-
pose for which purchase or acquisition of foreign exchange is permissible
under the provisions of the Act or the rules or regulations or direction or
order made thereunder, shall surrender such foreign exchange or the un-
used portion thereof to an authorised person within a period of sixty days
from the date of its acquisition or purchase by him.
(2) Notwithstanding anything contained in sub-regulation (1), where the
foreign exchange acquired or purchased by any person from an authorised
person is for the purpose of foreign travel, then, the unspent balance of
such foreign exchange shall, save as otherwise provided in the regulations
made under the Act, be surrendered to an authorised person -
(i) within ninety days from the date of return of the traveller to
India, when the unspent foreign exchange is in the form of
currency notes and coins; and
(ii) within one hundred eighty days from the date of return of the
traveller to India, when the unspent foreign exchange is in the
form of travellers cheques.”
The appellant has placed reliance on the text of Section 42 of the FEMA Act to
bolster his argument that only such person who was in charge of the Company at
the time the contravention was committed, would be responsible for the action.
11. The High Court has opined that the contravention referred to in
Section 10(6) by its very nature is a continuing offence. We agree with that view.
It is indisputable that the penalty provided for such contravention is on account
of civil obligation under the FEMA Act or the rules or regulations or direction or
order made thereunder. If the delinquency is a civil obligation, the defaulter is
obligated to make efforts by payment of the penalty imposed for such contraven-
tion. So long as the imported goods remained uncleared and obligation provided
under the rules and regulations to submit Bill of Entry was not discharged, the
contravention would continue to operate until corrective steps were taken by the
Company and the persons in charge of the affairs of the Company. The High
Court has adverted to the exposition in Chairman, SEBI v. Shriram Mutual Fund &
Anr. - (2006) 5 SCC 361. In this decision, while dealing with the question as to
whether mens rea is essential for imposing penalty for breach of civil obligations,
the Court adverted to the dictum in Director of Enforcement v. M.C.T.M. Corpora-
tion Pvt. Ltd. & Ors. - (1996) 2 SCC 471, which in turn had quoted the exposition
in Corpus Juris Secundum, Vol. 85, page 580, paragraph 1023, which reads thus :-

EXCISE LAW TIMES  1st April 2020  173