Page 102 - ELT_15th August 2020_Vol 373_Part 4

436 EXCISE LAW TIMES [ Vol. 373

5. Shri C.A. Sundaram, Learned Senior Counsel for the appellant sub-
mits that the High Court dismissed the appeal of the appellant holding that reply
dated 29-10-2003 of the appellant taking the plea that he was only a part-time
Director was only an afterthought. The High Court further held that the affidavit
dated 4-7-2003 of the Company Secretary relied by the appellant does not appear
to have been filed either before the Adjudicating Authority or the Appellate Tri-
bunal and no such plea had been taken in the earlier communications. Shri
Sundaram submits that the High Court committed error in dismissing the appeal
of the appellant whereas neither there was any material nor any specific case of
the Department that the appellant was in-charge of and responsible for the con-
duct of business of the Company. The mere fact of Company-MXL in its reply to
the notice dated 19-2-2001 having given the names of the 13 persons as Directors
of MXL does not amount to stating that all the Directors were responsible for the
conduct of business of the Company. The appellant could have been prosecuted
and punished for the contravention of the provisions of FERA, 1973 only after
returning a finding that it was the appellant who was responsible for the conduct
of business during the relevant period when remittances in question were made
by MXL. The Appellate Tribunal without recording any finding that appellant
was in charge of the affairs of the Company held the appellant liable, observing
that there is nothing on record to show that any restriction was placed on the
powers of the appellants as Directors of the Company with reference to subject
transactions. The Adjudicating Authority although noticed the detailed reply
given by the appellant dated 29-10-2003 but without returning any finding that
the appellant was Director who was responsible for working of MXL at the rele-
vant time imposed the penalty only relying on the letter of the Company Secre-
tary where names of the persons who were in the Board of Directors were men-
tioned.
6. Shri Sundaram further submits that with regard to a subsequent
transaction, proceedings were initiated against the appellant in respect to trans-
action of MXL where the plea of the appellant that he was only a part-time, non-
executive Director and had no executive role or function in the Company was
accepted and proceedings were dropped insofar as the appellant is concerned by
order dated 13-2-2004 which order clearly noticed the status and role of the ap-
pellant.
7. Learned Additional Solicitor General refuting the submissions of the
Counsel for the appellant contends that penalty has rightly been imposed on the
appellant. He submits that admittedly the appellant was Director during the rel-
evant period which fact was admitted too in the reply given to the show cause
notice. The show cause notice was issued against all the Directors including the
appellant and no effort has been made by the appellant to disprove the allega-
tions made against him. Learned Additional Solicitor General submits that there
needs no specific complaint in proceedings of FERA, 1973 as opposed to com-
plaint under Negotiable Instruments Act. When the proceedings have been initi-
ated under Section 51 of the FERA, 1973, the burden is on the appellant to prove
that he had no role to play on behalf of the Company.
8. Learned Counsel for the parties have placed reliance on few deci-
sions of this Court which shall be referred to while considering the submissions
of the parties in detail.
9. From the submissions made by the parties and materials on records
following points arise for determination in this appeal :
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