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2026 Supreme(Online)(ATFP) 85
APPELLATE TRIBUNAL FOR FORFEITED PROPERTY
Balesh Kumar, Member, Rajesh Malhotra, Member
Shri Syed Nadeem Ahmed – Appellant
Versus
The Additional Director, The Directorate of Enforcement, Chennai – Respondent
FPA-FE-53/CHN/2019 | FPA-FE-103/CHN/2023
For the Appellant: Mr. T. Sundar Ramanathan, Adv., Ms. Sukanya Viswanathan, Adv.
For the Respondent:Mr. Pranav Mishra, Advocate
The provisions of the Foreign Exchange Management Act extend to the Exclusive Economic Zone, and export definitions encompass catches sold from the EEZ to foreign buyers.
Headnote:(A) Foreign Exchange Management Act, 1999 - Sections 3(b), 6(3)(d) and 8 - Penalty imposed for contraventions related to export of fisheries caught in the Exclusive Economic Zone (EEZ) and failure to realize foreign exchange - Act extends to EEZ; Notification not required - Appellant failed to make payment for imported vessels and not realized full export proceeds - Appeal partly allowed, penalties reduced. (Paras 21, 26, 38)
(B) Sovereignty and jurisdiction - Jurisdiction of FEMA extends to actions occurring in the EEZ; definition of export includes transactions in the EEZ. (Paras 12, 14)
Facts of the case:
Appellants engaged in deep sea fishing operations imported vessels, faced penalties for violations due to non-realization of export proceeds and failure to pay for imported goods. (Para 1)
Findings of Court:
The Tribunal found that the Appellants violated provisions of FEMA, but the penalties were adjusted based on their efforts to comply with regulations. (Paras 36, 38)
Issues: Whether FEMA provisions extend to EEZ and if non-realization of foreign exchange constitutes a contravention under FEMA. (Paras 21, 24)
Ratio Decidendi: The court emphasized that FEMA applies in the EEZ, and export definitions include sales transacted there, rejecting the Appellants’ claims against the penalties. (Paras 26, 28)
Result: Appeals partly allowed; penalties reduced to Rs. 9,00,000/- for the firm and Rs. 30,000/- for the individual. (Paras 38, 39)
| Table of Content |
|---|
| 1. details of penalties imposed (Para 1 , 2 , 3) |
| 2. arguments regarding jurisdiction of fema (Para 4 , 5 , 6) |
| 3. defense on payment regulations (Para 7 , 8 , 9) |
| 4. allegations of non-compliance (Para 10 , 11 , 12) |
| 5. arguments related to residency and jurisdiction (Para 13 , 14 , 15) |
| 6. details of loan and repayment issues (Para 16 , 17 , 18) |
| 7. court's analysis of the nature of fish export (Para 19 , 20 , 21 , 22) |
| 8. clarification on regulatory requirements (Para 23 , 24 , 25) |
| 9. findings on contravention of exchange regulations (Para 26 , 27 , 28 , 29) |
| 10. overview of penalties and their justification (Para 30 , 31 , 32 , 33 , 34) |
| 11. final ruling on penalties (Para 35 , 36 , 37) |
| 12. conclusion and order of the tribunal (Para 38 , 39) |
FINAL ORDER
29.01.2026
This Order disposes of the Appeals Nos. FPA-FE-53/CHN/2019 filed by M/s Neela Deep Sea Fisheries (NDSF) and FPA-FE- 103/CHN/2023 filed by Shri Syed Nadeem Ahmed, against the Order No. ADE/SRO/CEZO/01/2019 dated 19.07.2019 (Impugned Order), passed by the Additional Director, Enforcement Directorate, Government of India, Chennai. The Ld. Adjudicating Authority (AA) imposed the cumulative penalty of Rs. 95,00,000/- on the Appellant Firm comprising of the following:
a. Rs. 30,00,000/- for the contravention of Section 8 of the Foreign Exchange Management Act, 1999 ( FEMA ) read with Regulations 8, 9 (1) & 13 of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 and Regulation 3 of the Foreign Exchange Management (Realisation, Repatriation & Surrender of Foreign Exchange) Regulations, 2000 to the extent of US $ 14,01,116 (Rs. 6,16,49,104/-).
b. Rs. 30,00,000/- for the contravention of Section 3 (b) of FEMA to the extent of US $ 14,01,116 (Rs. 6,16,49,104/-).
c. Rs. 35,00,000/- for the contravention of Section 6 (3) (d) of FEMA read with Regulations 5 (3) & 6 (3) with Para 1 to Schedule III of the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations 2000 to the extent of US $ 6,30,746 (Rs.3,48,80,254/-).
The individual Appellant Shri Syed Nadeem Ahmed, who was the active partner of the Appellant Firm was penalized for the aforementioned contraventions in terms of Section 42 (1) of FEMA . Correspondingly the penalty amounts imposed on him were Rs. 3,00,000/-, Rs. 3,00,000/- and Rs. 4,00,000/- totaling Rs.10,00,000/-.
2. This Tribunal vide Order dated 28.11.2024 had directed the Appellant Firm and the individual Appellant to make pre-deposit of Rs. 9,00,000/- and Rs. 1,00,000/- respectively which has been complied with.
3. Briefly, the facts of the case are that NDSF had obtained necessary permission from the Ministry of Agriculture, Government of India in the year 2008 to acquire Tuna Long Liners Vessels (TLL). NDSF imported TLL from M/s Glory Ocean Ltd., Taiwan under trade credit. Further NDSF entered into a Memorandum of Understanding with M/s Eastward Exim and Shipping Pvt. Ltd., Seychelles for sale of fish caught by their TLLs. For the fish catches made in the Indian Exclusive Economic Zone (EEZ), NDSF raised 16 invoices. As per the Memorandum, M/s Eastward Exim and Shipping Pvt. Ltd., Seychelles made payment to NDSF after deducting the charges for bunkers and baits etc. and all the advance remittances. Thus, the value of the total export was US $ 22,95,918 of which US $ 8,94,802 was received as advance for the export of fish catches and the balance amount pending was US $ 14,01,116. The Appellants failed to make full payment under the deferred payment system as detailed in letter of permission of the Ministry of Agriculture, Government of India. NDSF imported four TLLs vide Bills of Entry Nos. 365757, 366404, 366412 and 366413 all dated 25.11.2009 from M/s Glory Ocean Ltd., Taiwan for total value of US $ 14,20,000. NDSF failed to make payment of US $ 6,30,746 (equivalent to Rs.3,48,80,254/-) to M/s Glory Ocean Ltd., Taiwan. The Reserve Bank of India (RBI) vide letter dated 05.11.2013 informed that no approval/ regulariz
