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 Salitho Ores Pvt. Ltd, ₹ 1 Crore

ii) Shri Arjun Salgaokar, Director ₹ 10 Lakhs.

The said penalties were imposed for non-realisation of export proceeds amounting to US $ 9,83,721 (equivalent to Rs.4,32,83,724).

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 Salitho Ores Pvt. Ltd. (Noticee No.1) to the extent of US$ 9,83,721 (Equivalent to 4,32,83,724/-), 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 one export consignment and further, failing to take all reasonable steps to realize said export proceeds amounting to US$ 983,721), which represented the quantum of amount under-invoiced in the exports made by M/s Salitho Ores 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 Salitho Ores Pvt Ltd (Noticee No.1), for failing to take all reasonable steps to realize the export proceeds amounting to US$ 4,12,692.77 (Equivalent to Rs 1,81,58,482/-), covered under 1 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 Salitho Ores Pvt. Ltd. being the person in-charge and responsible for the conduct of business of M/s Salitho Ores Pvt. Ltd. was also charged in terms of section 42(1) FEMA for the contraventions alleged against M/s Salitho Ores Pvt. Ltd., as mentioned at S.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. 1-3/30-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. It was further informed that the DRI, Mumbai had conducted investigation in the matter and on conclusion of the investigation, DRI Mumbai had issued a Show Cause cum Demand Notice bearing No. DRI/MZU/GRU/ENQ-79/2014 dated 26.07.2014 to the Noticee Company. In the SCN issued by the D