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

Kaveri Industries Ltd. made an overseas investment and breached a FEMA direction. The sum involved in the contravention is quantifiable at Rs 8 lakh. On adjudication under Section 13(1), up to what amount can the penalty extend?

The penalty can extend up to Rs 24 lakh. Section 13(1) allows a penalty up to thrice the sum involved when the amount is quantifiable, so three times Rs 8 lakh gives Rs 24 lakh. The Rs 2 lakh cap applies only to non-quantifiable cases.

  1. ARs 2 lakh
  2. BRs 8 lakh
  3. CRs 16 lakh
  4. DRs 24 lakhCorrect

Explanation

Section 13(1) provides a penalty up to thrice the sum involved where the amount is quantifiable. Three times Rs 8 lakh is Rs 24 lakh. Rs 2 lakh applies only where the amount is not quantifiable, and Rs 8 lakh or Rs 16 lakh miscalculate the multiple.

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