Page 101 - ELT_15th August 2020_Vol 373_Part 4

2020 ] SHAILENDRA SWARUP v. DEPUTY DIRECTOR, ENFORCEMENT DIRECTORATE 435

2.1 Modi Xerox Ltd. (MXL) was a Company registered under the Com-
panies Act, 1956 in the year 1983. Between the period 12-6-1985 — 21-11-1985,
20 remittances were made by the Company-MXL through its banker Standard
Chartered Bank. The Reserve Bank of India issued a letter stating that despite
reminder issued by the Authorised Dealer, MXL had not submitted the Exchange
Control copy of the Customs Bills of Entry/Postal Wrappers as evidence of im-
port of goods into India. Enforcement Directorate wrote to MXL in the year 1991-
1993 for supplying invoices as well as purchase orders. MXL on 9-7-1993 provid-
ed for four transactions and Chartered Accountant’s Certificates for balance 16
amounts for which MXL’s Bankers were unable to trace old records dating back
to 1985. MXL amalgamated and merged into Xerox Modicorp Ltd. (hereinafter
referred to as “XMC”) on 10-1-2000. A show cause notice dated 19-2-2001 was
issued by the Deputy Director, Enforcement Directorate to MXL and its Direc-
tors, including the appellant. The show cause notice required to show cause in
writing as to why adjudication proceedings as contemplated in Section 51 of For-
eign Exchange Regulation Act, 1973 (hereinafter referred to as “FERA, 1973”)
should not be held for contravention. Xerox Modi Corporation Ltd. (successor of
MXL) replied the show cause notice dated 19-2-2001 vide its letter dated 26-3-
2001. The Directorate of Enforcement decided to hold proceedings as contem-
plated in Section 51 of the FERA, 1973 read with Section 3 and 4 of Section 49 of
FEMA and fixed 22-10-2003 for personal hearing. Notice dated 8-10-2003 was
sent to MXL and its Directors. Notice dated 8-10-2003 was replied by the appel-
lant vide its detailed reply dated 29-10-2003. In the reply the appellant stated that
he is a practicing Advocate of the Supreme Court and was only a part-time, non-
executive Director of MXL and he was never in the employment of the Company
nor had executive role in the functions of the Company. It was further stated that
the appellant was never in charge of nor ever responsible for the conduct of
business of the Company. Along with the reply an affidavit of the Company Sec-
retary dated 4-7-2003 that the appellant who was the Director of erstwhile Com-
pany-XML was only a part-time, Director of the said Company and never in-
charge of day to day business of the Company was also filed. The MXL has also
submitted a reply dated 29-10-2003. The Deputy Director, Enforcement Direc-
torate after hearing the appellant, other Directors of the Company passed an or-
der dated 31-3-2004 imposing a penalty of ` 1,00,000/- on the appellant for con-
travention of Section 8(3) read with 8(4) and Section 68 of FERA, 1973.
2.2 Aggrieved by the order dated 31-3-2004 imposing penalty of
Rs. 1,00,000/- on the appellant, Appeal No. 622 of 2004 was filed by the appellant
before the Appellate Tribunal for Foreign Exchange which appeal came to be
dismissed by the Appellate Tribunal on 26-3-2008. Against the order of the Ap-
pellate Tribunal dated 26-3-2008, Criminal Appeal No. 575 of 2008 was filed by
the appellant in Delhi High [Court]. The Delhi High Court by the impugned
judgment dated 18-11-2009 has dismissed the appeal of the appellant, question-
ing which judgment this appeal has been filed.
3. The High Court, in Criminal Appeal, during pendency of the appeal
has stayed the order of penalty. This Court while issuing notice on 19-2-2010 in
the present appeal had also stayed the order of penalty imposed on the appel-
lant.
4. We have heard Shri C.A. Sundaram, Learned Senior Counsel for the
appellant and Shri K.M. Nataraj, Learned Additional Solicitor General for the
respondent.
EXCISE LAW TIMES  15th August 2020  101