Thyssenkrupp Industrial Solutions (India) Private Limited
- CitationRBI Compounding Order CA No. MUM872/2019
Ratio decidendi
The rule this decision rests on
The compounding authority holds that a contravention of Para 9(2) of FEMA 20, consisting of non-filing or delayed filing of the Annual Return on Foreign Liabilities and Assets by an Indian company that has received foreign direct investment, is an admitted contravention which may be compounded under the Foreign Exchange (Compounding Proceedings) Rules, 2000, on payment of a compounding sum, where the applicant's declarations as to the absence of pending enquiry, investigation, adjudication or appeal are accepted as true and the compounding is without prejudice to other action if those declarations prove false. The compounding amount is fixed by the authority's exercise of discretion under Section 13 of FEMA, which permits a penalty of up to thrice the sum involved; the authority takes a lenient view in light of the facts and circumstances of the case and fixes the amount with reference to the ends of justice. Compounding of the admitted contravention is confined to the Para 9(2) contravention alone and does not bar any other authority from proceeding against the company for other contraventions.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
In the Reserve Bank of India Foreign Exchange Department Mumbai Regional Office Main Building, 3rd floor Shahid Bhagat Singh Marg, Fort Mumbai 400 001 Present Shri J.K. Pandey Chief General Manager May 30, 2019 CA No. MUM872/2019 In the matter of M/s Thyssenkrupp Industrial Solutions ( India) Pvt Ltd Uhde House LBS Marg, Vikhroli West, Mumbai 400083 (Applicant) In exercise of the powers conferred under section 15(1) of the Foreign Exchange Management Act, 1999 and the Regulations/Rules/Notifications/Orders made thereunder, I pass the following Order 1 The applicant has filed the compounding application dated April 09, 2019, received at the Reserve Bank on April 12, 2019, for compounding of contravention/s of the provisions of the Foreign Exchange Management Act, 1999 (the FEMA) and the regulations issued thereunder. The contraventions sought to be compounded are in respect of the following Regulations/ paras under Schedule 1 to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations 2000, notified vide Notification No. FEMA 20/2000-RB dated May 3, 2000 and as amended from time to time (hereinafter referred to as FEMA 20):
I Para 9 (2) of FEMA 20: Delay in filing ‘Annual Return on Foreign Liabilities and Assets’ (FLA Returns).
FED, MRO, CEFA, M/s Thyssenkrupp Industrial Solutions ( India) Pvt Ltd, CA No: MUM 872/2019
2 Brief facts of the applicant company are as follows: Date of Incorporation December 23, 1977 Its main activities are: Architectural and engineering activities and related technical consultancy
3 The company has not filed/delayed in filing the Annual Return on Foreign Liabilities and Assets (FLA return) to the Reserve Bank of India for the Financial Years 2006-07, 2007-08, 2008-09, 2009-10, 2010-11, 2011-12, 2012-13, 2013-14, 2014-15, 2015-16 and 2016-17. Whereas, in terms of Para 9(2) of FEMA 20, all Indian companies which have received Foreign Direct Investment in the previous years including the current year, shall submit to the Reserve Bank of India, on or before the due date (as applicable) each year, a report titled ‘Annual Return on Foreign Liabilities and Assets’ as specified by the Reserve Bank from time to time.
4 The applicant was given an opportunity for personal hearing, for further submission in person and/or for producing documents, if any, in support of the application vide e-mail dated May 16, 2019. The applicant applied for waiver of personal hearing vide e mail dated May 16, 2019. The applicant, in the compounding application, had admitted the contravention as stated above for which compounding has been sought. It had been submitted that the contravention was not wilful and was unintentional. The application for compounding is, therefore, being considered on the basis of the averments made in the application as well as other documents and submissions made in this context by the applicant.
5 I have given my careful consideration to the documents on record and thereafter. Accordingly, I hold that the applicant has contravened the following FEMA provisions issued in terms of: I Para 9 (2) of FEMA 20, due to non-filing/delay in filing of Annual Return on Foreign Liabilities and Assets for the Financial Years 2006-07, 2007-08, 2008-09, 2009-10, 2010-11, 2011-12, 2012-13, 2013-14, 2014-15, 2015-16 and 2016-17. 6 It has been declared in the compounding application dated April 09, 2019 that the particulars given by the applicant in the application are true and correct to the best of their/his/her knowledge and belief. It has also been declared in a declaration attached to the compounding application that the applicant was not under any enquiry/investigation/adjudication by any agency as on the date of the application and has, in this regard, not informed of initiation of any such enquiry/investigation/ adjudication proceedings against it/him/her thereafter. It has further been declared that the applicant has not filed any appeal under section 17 or section 19 of FEMA, 1999. Accordingly, the above contraventions which are being compounded in this Order are subject to the veracity of the above declarations made by the applicant and this order is without prejudice to any other action which may be taken by any authority under the extant laws if the said declarations are subsequently discovered to be false and/or incorrect.
FED, MRO, CEFA, M/s Thyssenkrupp Industrial Solutions ( India) Pvt Ltd, CA No: MUM 872/2019
7 In terms of Section 13 of the FEMA, any person contravening any provision of the Act shall be liable to a penalty up to thrice the sum involved in such contravention upon adjudication. However, taking into account the relevant facts and circumstances of the case as stated in the foregoing paragraphs, I am persuaded to take a lenient view on the amount for which the contraventions are to be compounded and I consider that an amount of Rs.110,000 (Rupees One Lakh Ten Thousand and Zero Paise Only) will meet the ends of justice.
8 Accordingly, I compound the admitted contravention/s namely, the contravention/s of Para 9 (2) of FEMA 20, by the applicant, on the facts discussed above in terms of the Foreign Exchange (Compounding Proceedings) Rules, 2000 on payment of an amount of Rs. 110,000 (Rupees One Lakh Ten Thousand and Zero Paise Only) which shall be deposited by the applicant with the Reserve Bank of India, Foreign Exchange Department, Mumbai Regional Office, Main Building, 3rd floor, Shahid Bhagat Singh Marg, Fort, Mumbai-400001 by a demand draft drawn in favour of the "Reserve Bank of India" and payable at Mumbai within a period of 15 days from the date of this order. In case of failure to deposit the compounded amount within the above-mentioned period, Rule 10 of the Foreign Exchange (Compounding Proceedings) Rules, 2000 dated May 3, 2000 shall apply.
9 The above order is passed only in respect of contraventions of Para 9 (2) of FEMA 20 and does not restrict the right of any other authority to proceed against the Company for any other violations/contraventions noticed at any point of time.
10 The application is disposed of accordingly. dated: May 30, 2019 Compounding Authority (J.K. Pandey) Chief General Manager
FED, MRO, CEFA, M/s Thyssenkrupp Industrial Solutions ( India) Pvt Ltd, CA No: MUM 872/2019
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