FINAL ORDER

25.03.2026

Dictated By: Rajesh Malhotra

Present Appeals u/s 19 of the Foreign Exchange Management Act, 1999 are filed by the Appellants against the Order dated 14.07.2018 passed by the Ld. Special Director, Directorate of Enforcement, Mumbai vide which penalties were imposed on the Appellants as under:

i) M/s Salgaocar Mining Industries Pvt. Ltd.₹ 30 Crores

ii) Shri Arjun Salgaokar, Director ₹ 3 Crores.

The said penalties were imposed for non-realisation of export proceeds amounting to US $ 4,42,27,968.89 (Equivalent to Rs. 201,61,17,175/-).

2. As per the facts of the case, Show Cause Notice dated 01.06.2017 was issued to the noticee (herein appellants) on the following grounds:

(i) For contravention of the provisions of section 7 & 8 of FEMA 1999 read with paras 3, 9 & 13 of Foreign Exchange Management (Export of Goods and Services) Regulation, 2000, issued in exercise of the powers conferred by clause (a) of sub-section (1) and sub-section (3) of section 7 and sub- section 2 of section 47 of FEMA 1999, against (1) M/s Salgaocar Mining Industries Pvt. Ltd. (Noticee No.1) to the extent of US$ 4,42,27,968.89 (Equivalent to 201,61,17,175/-), for failing to furnish the true and correct material particulars, including the amount representing the full export value of the goods exported, in the relevant export documents covering 85 export consignments and further, failing to take all reasonable steps to realize said export proceeds amounting to US$ 4,42,27,968.89), which represented the quantum of amount under-invoiced in the exports made by M/s Salgaocar Mining Industries Pvt. Ltd. which were due to be received by them in India, as being the part of the full export value of the goods, and further for doing or refraining from doing anything, or taking, or refraining from taking any action to ensure the realization of the said amount, being part of the export proceeds within the stipulated period, without the permission of RBI, as per specific details given in the complaint.

(ii) Contravention of the provisions of section 7 & 8 of FEMA 1999 read with paras 3, 9 & 13 of Foreign Exchange Management (Export of Goods and Services) Regulation, 2000, issued in exercise of the powers conferred by clause (o) of sub-section (1) and sub-section (3) of section 7. sub-section 2 of section 47 of FEMA 1999, against (i) M/s Salgaocar Mining Industries Pvt Ltd (Noticee No.1), for failing to take all reasonable steps to realize the export proceeds amounting to US$ 1,79,64,315.78 (Equivalent to Rs 73,52,05,278/-), covered under 56 export consignments and further, doing or refraining from doing anything, or taking, or refraining from taking any action to ensure the realization of the said export proceeds within the stipulated period, without the permission of RBI, as per specific details given in the complaint.

iii) Shri Arjun Salgacar (Noticee No.2), Director of M/s Salgaocar Mining Industries Pvt. Ltd. being the person in-charge and responsible for the conduct of business of M/s Salgaocar Mining Industries Pvt. Ltd. was also charged in terms of section 42(1) FEMA for the contraventions alleged against M/s Salgaocar Mining Industries Pvt. Ltd., as mentioned at Sl. No (i) to (ii) above.

The SCN was issued to the aforesaid noticees by the Adjudicating Authority after taking notice of charges framed in a complaint bearing No. T-3/29-Goa/2015 dated 7.4.2017 filed against them by the complainant under section 16(3) of FEMA 1999. Brief facts of the case, leading to filing of the subject complaint, and the resultant issue of SCN, are given as under:-

FACTS OF THE CASE:

Specific information was received from the Directorate of Revenue Intelligence (DRI) informing that the Noticee Company had been evading custom export duty in their export of iron ore by undervaluing iron ore exported from the Panaji Minor Port, Goa and also from Belekeri and Mangalore Ports in Karnataka. It was further informed that the DRI, Mumbai had conducted investigation in the matter and