CONTRAVENTION UNDER FEMA
Export proceeds have to be realized and repatriated to India on the due date or within nine months from the date of shipment, whichever is earlier, for all exports including Units in SEZs, Status Holder Exporters, EOUs, Units in EHTPs, STPs, and BTPs.
If exporters fail their obligations, they are deemed to be under contravention under The FEMA laws.
FAILURE ON THE PART OF MRUGANK INVESTMENTS UNDER FEMA
Mrugank Investments had failed to realise export proceeds within stipulated time ?.
Adjudicating Authority vide impugned order imposed penalty of Rs. 40 Lakhs company and Rs.4 Lakh on each of four Directors of Company including appellants, in view of fact that appellants failed to furnish any documentary evidence of having made efforts to realize export proceeds.
VIEWS OF THE COURT
There were no reason to intervene with Impugned Order insofar as its findings that appellant Directors have contravened Sections 8 of FEMA , however, ends of justice would met on reduction of penalty amount on appellants to Rs.2 lakh.
FINDINGS
1.??? Export proceeds have to be realised in India within 9 months of date of export . Else it will be considered as contravention of section 8 of the Foreign Exchange Management Act, 1999.
2.??? If the export proceeds cannot be repatriated within 9 months from the date of export, you have to apply for the extension to RBI through your banker stating the valid reasons for the same.
3.??? Time limit for realisation is 15 months in cases of goods sent to Indian owned warehouses abroad set up with the approval of RBI.
4.??? ?RBI may allow time up to 12 months for exports made on consignment basis to CIS and East European countries and financed in a permitted currency..
5.??? Cases where A/D Branch on application in form ETX (Annexure 2(3) has allowed extension of time
R V Seckar , Practicing Company Secretary
79047 19295
