APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI FPA-FE-03/BNG/2014 Shri M. Lakshmi Chand Jain … Appellant Versus The Joint Director, Directorate of Enforcement, Bangalore … Respondent Advocates/Authorized Representatives who appeared For the Appellant : Mr. Hari Radhakrishnan, Advocate Mr. Mohd. Uvaisullah Muhcin, Adv.

For the Respondent : Mr. Mohd. Wasay Khan, Advocate CORAM SHRI BALESH KUMAR : MEMBER SHRI RAJESH MALHOTRA : MEMBER

FINAL ORDER

13.11.2025 This Order disposes of the Appeal No. FPA-FE-03/BNG/2014 filed by Shri M. Lakshmi Chand Jain, against the Order No.JD/04/BZ/2012-13/(FEMA)/(JD-SA)/2197 dated 06.12.2013 (Impugned Order) passed by the Joint Director, Directorate of Enforcement, Government of India, Bangalore. Penalty of Rs.30,00,000/- was imposed on the Appellant Shri M. Lakshmi Chand Jain for the contravention of Section 8 of the Foreign Exchange Management Act, 1999 (FEMA) read with Regulation 3 of FEMA (Realisation, Repatriation and Surrender of Foreign Exchange) Regulation, 2000 vide the Impugned Order. This Tribunal vide Order dated 01.04.2024 disposed of the Application for waiver of the pre- deposit of the penalty amount with direction to pay Rs.10,00,000/- in the form of FDR with the Respondent Directorate within one month of the Order. It is recorded on the Order Sheet dated 07.10.2024 that the Appellant has complied with the Order by depositing Union Bank of India Draft No. 175131 dated 08.05.2024.

2. Ld. Counsel for the Appellant stated that the conclusion made in the Impugned Order was erroneous since the Appellant had received the commission payable by the foreign supplier by way of setting off the same against the value of goods purchased by the Appellant from such foreign supplier. Ld. Counsel contended that the Respondent has also duly admitted the said fact. Ld. Counsel submitted that Section 8 of FEMA and Regulation 3 of FEMA (Realisation, Repatriation and Surrender of Foreign Exchange) Regulation, 2000 mandate that a person resident in India "shall take all reasonable steps to realise and repatriate to India such foreign exchange" which is due to such person. It is therefore submitted that the act of the Appellant in setting-off the commission receivable by the Appellant against the import payables for the goods imported by the Appellant, would have to necessarily lead to a conclusion that the Appellant had indeed realised the value of commission receivable by the Appellant from such foreign suppliers. He therefore contended that the finding that the Appellant had violated the provisions of Section 8 of FEMA r/w Regulation 3 of FEM (Realisation, Repatriation and Surrender of Foreign Exchange) Regulation, 2000 is unsustainable in law and is therefore liable to be set aside.

3. Ld. Counsel for the Appellant elaborated that the Appellant was paid commission for the services rendered in the form of discounts given by the said foreign suppliers, whom he represents in India, whenever he purchased from that supplier, on his account. The commission would be paid to him only when the foreign supplier received payment from the Indian buyer. The commission payable by the foreign supplier was adjusted in terms of the discounts given. He had not received any commission in foreign exchange through banking channels. The commission payable was set off against the purchases made (by his firm). The amount of discount given by the suppliers ranged from 10% to 40%. The commission that was payable by the foreign suppliers was the total of the differential value of the goods as assessed by the Directorate of Revenue Intelligence, Bangalore in the two Show Cause Notices (SCNs) that were issued to him. No commission was paid to him by the foreign supplier either in foreign exchange or Indian rupees through bank or otherwise. He had not obtained any permission from the Reserve Bank of India (RBI) for adjusting the commission payable to him by discounting the value of supplies made to him. In response to the SCNs issued as