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CS Executive · Economic, Commercial and Intellectual Property Laws · Overseas Direct Investment

Ananya Pharma Ltd contravenes a FEMA rule on a quantifiable transaction of Rs 40 lakh, and the contravention is not a continuing one. On adjudication under Section 13(1), what is the maximum penalty?

The maximum penalty is Rs 1.2 crore. Section 13(1) permits a penalty up to thrice the sum involved when the amount is quantifiable, and thrice Rs 40 lakh equals Rs 1.2 crore. The Rs 2 lakh limit applies only to unquantifiable amounts.

  1. ARs 40 lakh
  2. BRs 1.2 croreCorrect
  3. CRs 2 lakh
  4. DRs 80 lakh

Explanation

Section 13(1) allows a penalty up to thrice the sum involved where the amount is quantifiable. Three times Rs 40 lakh is Rs 1.2 crore. Rs 2 lakh applies only when the amount is not quantifiable. Rs 40 lakh uses a single multiple, and Rs 80 lakh uses twice the sum, both wrong.

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