CS Executive · Economic, Commercial and Intellectual Property Laws · Overseas Direct Investment
Arvind Textiles Ltd, an Indian company, remits Rs 40 lakh abroad in breach of a FEMA rule. The amount involved is quantifiable. Under Section 13(1), what is the maximum penalty the adjudicating authority can impose for the contravention itself (ignoring any continuing contravention)?
The maximum penalty is Rs 1.2 crore. Section 13(1) permits a penalty up to three times the sum involved when the amount is quantifiable, and three times Rs 40 lakh equals Rs 1.2 crore. The Rs 2 lakh limit applies only to non-quantifiable contraventions.
- ARs 2 lakh
- BRs 40 lakh
- CRs 1.2 croreCorrect
- DRs 80 lakh
Explanation
Section 13(1) allows a penalty up to thrice the sum involved where the amount is quantifiable. Thrice Rs 40 lakh is Rs 1.2 crore. The Rs 2 lakh cap applies only when the amount is not quantifiable, so it is wrong here.
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