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CA Intermediate · Corporate and Other Laws · The Foreign Exchange Management Act, 1999

Vikram Exports Pvt. Ltd. contravened a FEMA provision involving a sum that is quantifiable at Rs. 40 lakh. The Adjudicating Authority imposed a penalty after holding an inquiry, and the company disagrees with the order. Which of the following is the correct position on the penalty and appeal route under FEMA, 1999?

Where the sum is quantifiable, FEMA allows a penalty up to thrice that sum. The aggrieved person appeals against the adjudicating order to the Special Director (Appeals) within 45 days of receiving it, not directly to the Supreme Court.

  1. APenalty can be up to thrice the sum involved where quantifiable; the aggrieved person may appeal to the Special Director (Appeals) within 45 days of receipt of the orderCorrect
  2. BPenalty is limited to a fixed Rs. 10,000 irrespective of the sum involved; appeal lies directly to the Supreme Court
  3. CPenalty can be up to ten times the sum involved; appeal lies to the High Court within 90 days
  4. DNo penalty can be imposed in civil proceedings; only imprisonment applies

Explanation

Under section 13, if the amount is quantifiable, penalty may extend to thrice the sum involved in the contravention. An order of the Adjudicating Authority is appealable to the Special Director (Appeals) within 45 days from receipt. Later appeals go to the Appellate Tribunal and then the High Court. The other options misstate the quantum and forum.

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