APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI (1) FPA-FE-06/CHN/2024 Shri P. HamsakuttyPoyilil … Appellant (2) MP-FE-10/CHN/2024 (Misc.)

MP-FE-52/CHN/2021 (Stay)

FPA-FE-29/CHN/2021 P. Shanavas&Anr. … Appellant (3) MP-FE-53/CHN/2021 (Stay)

FPA-FE-30/CHN/2021 Anil S. … Appellant Versus The Special Director Directorate of Enforcement, Chennai. … Respondent Advocates/Authorized Representatives who appeared For the Appellants : Mr. Kiran Narayanan, Advocate For the Respondent : Mohd. Wasay Khan, Advocate CORAM JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI V. ANANDARAJAN : MEMBER

FINAL ORDER

28.04.2025 FPA-FE-06/CHN/2024, FPA-FE-29&30/CHN/2021 This order would decide the application filed by the appellant under Section 19 of the Foreign Exchange Management Act, 1999 (in short `the Act of 1999’) for waiver of the condition of pre-deposit.

2. It is a case where the Directorate of Enforcement had credible information that Poyilil International Trading received advance payment for export of rice to the tune of 23,93,994 USD during the period between 25.06.2015 to 31.03.2016 from a Saudi Arabia based firm. However, the export of rice was not completed within the stipulated time, rather major portion of advance was retained and thereby they contravened Section 7 of the Act of 1999 read with Regulation 16(1)(i) of Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 (in short `Regulations of 2000’) and Regulation 15(1)(i) of Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2015 (in short `Regulations of 2015’). It is apart from contravention of Section 6(3)(d) of the Act of 1999 read with Regulation 3 of Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 (in short `Borrowing or Lending Regulations of 2000’). The contravention of Section 10(6) of the Act of 1999 read with Regulation 6(1) of the Regulations of 2000 was also alleged apart from the contravention of Section 3(b) of the Act of 1999. The non-performance of the export despite receipt of the advance was taken to be in contravention of Regulation 15 and 16 of the Regulations of 2000 and 2015, respectively and return of the fund if any by the appellants.

3. The respondents found that Poyilil International Trading was involved in export of rice and it had received remittance from Mr. RabeeSulaiman Al Khuzaim and Rabee Al Khuzaim Trading Establishment. The payment was initially made in five instalments. During the course of investigation, statements of Shri Biju John, Branch Manager of HDFC Bank were recorded under Section 37 of the Act of 1999 who endorsed five remittance of advance payment in the accounts of the company. The respondents thereupon found that the Branch Manager Biju John of HDFC Bank had admitted receipt of the documents in part for export against the export advances thus partial export was made by the appellants but on a closer examination, it was found that against 20 shipping bills, only 3 shipping bills were found in terms of performance of the exports within one year of the advance received and for remaining 17 shipping bills, the date of shipment exceeded the stipulated one year period thus attracted contravention of the Act of 1999 and the Regulations.

4. The statement of Shri P. HamsakuttyPoyilil was recorded under Section 37 of the Act of 1999 who had admitted export of rice along with his brother Shri Shanavas. It was submitted that non- performance of the export or delay therein was due to shortage of prescribed rice thus they remained justified for non-performance of export. The appellant HamsakuttyPoyilil admitted that he had not taken any extension from Reserve Bank of India in terms of the stipulations under the Regulations of 2000.

5. He further admitted that the advance remittance was utilized to purchase four immovable properties in Kerala and Karnataka. Apart from purchase of immovable properties, he had also sent 12 lakhs USD for import of