January 28, 2019

Corporate Litigation Alert - January 2019

In a recent judgment, the Appellate Tribunal for Foreign Exchange, New Delhi has set aside imposition of penalty by Directorate of Enforcement on our client on account of non-submission of Bill of Entry for imports/ non-receipt of goods and non-repatriation of advance given to foreign supplier in case of imports.
Key observations in the judgment:
  • Exemption granted by RBI to waive requirement of submission of Bill of Entries ‘without prejudice to the action by Enforcement Directorate’ does not empower Enforcement Directorate to assume jurisdiction to investigate, adjudicate upon and impose penalty with respect to any alleged contravention.
  • Section 10(5) of FEMA 1999 applies only before the Authorized Dealer undertakes the transaction for the customer. Thus it cannot be attracted to any events that occur at the time of or after the transaction.
  • Non-receipt of goods by the importer despite making advance payment for import does not attract Section 10(6) of FEMA, 1999 or Regulation 6 of FEMA ( Realisation, Repatriation & Surrender of Foreign Exchange) Regulations, 2000.
Vaish Associates represented the client before the Tribunal ably supported by  a team comprising of Mrs.Sulekha Kaul, Principal Associate, Mr. Gaurav Varma, Principal Associate,Mr. Sujoy Datta,SeniorAssociate and Mr. Mohit Das,Junior Associate.
Copy of the judgment is attached herewith for your kind perusal.
For any details and clarifications, please feel free to write to Mr. Satwinder Singh at [email protected]