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

Sundaram Exports Ltd, an Indian company, makes a quantifiable contravention of a FEMA rule involving Rs 10 lakh. Under Section 13(1), after adjudication, what is the maximum penalty for the contravention itself (ignoring any continuing-contravention penalty)?

The maximum penalty is Rs 30 lakh. Section 13(1) permits a penalty up to three times the sum involved where the amount is quantifiable, and three times Rs 10 lakh equals Rs 30 lakh. The Rs 2 lakh cap applies only to unquantifiable contraventions.

  1. ARs 2 lakh
  2. BRs 10 lakh
  3. CRs 20 lakh
  4. DRs 30 lakhCorrect

Explanation

Section 13(1) allows a penalty up to thrice the sum involved where the amount is quantifiable. Thrice Rs 10 lakh is Rs 30 lakh. The Rs 2 lakh figure applies only when the amount is not quantifiable, so it is wrong here.

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