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

Kaveri Traders Pvt Ltd contravenes a FEMA direction, but the amount involved cannot be quantified. The contravention continues for 10 days from the first day. Under Section 13(1), what is the maximum total penalty on adjudication?

The maximum is Rs 2,00,000 plus Rs 45,000. Section 13(1) caps the penalty at Rs 2 lakh when the amount is not quantifiable, and adds up to Rs 5,000 for every day after the first day. Ten days of contravention means nine further days, giving Rs 45,000.

  1. ARs 2,00,000 plus Rs 45,000Correct
  2. BRs 2,00,000 plus Rs 50,000
  3. CRs 2,00,000 plus Rs 5,000
  4. DRs 50,000 only

Explanation

Base penalty for an unquantifiable amount is up to Rs 2 lakh. The further penalty of up to Rs 5,000 applies for every day after the first day, so 9 days give Rs 45,000. Counting all 10 days would wrongly give Rs 50,000.

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