Deep Swaroop Aggarwal v. Special Director, Directorate of Enforcement

FOREIGN EXCHANGE REGULATION ACT, 1973

--Violation of Foreign Exchange Regulation Act --Proceedings initiated upon show cause notice Whether appellant involved in distribution of foreign exchange----Where the appellant was neither involved in any payment of foreign exchange nor utilized any export benefits or incentives, therefore, the appellant had not committed any offence under section 9(1)(d) of the FERA.--Appellant was broker of deal of purchase of CD roms from SCIL. Enforcement Directorate (ED) issued summons to the broker on the ground that he was involved in export of the CD roms and availed export benefits or incentives in violation of section 9(1)(d). Broker filed an appeal against the order on the ground that he acted only as intermediary between SCIL and original purchaser of CD roms. He had also not utilised any export benefits or incentives. Further that, proceedings in violation of section 9(1)(d) against the original purchaser, who was the main person behind the whole export transaction was quashed by Tribunal. Held: There was no exact and clear evidence on record, which established that the broker in any way utilised any export benefits or incentives. Further that, the broker was not involved in any payment of foreign exchange. Further that, the original purchaser, who had done the whole transaction was let off and the same adjudicating order against him was quashed. ED failed to establish that the broker had committed any offence under section 9(1)(d) of the FERA. Hence, the order against the broker was set aside.