If any person contravenes any provision of this Act,
or contravenes any rule, regulation, notification, direction
or order issued in exercise of the powers under this Act,
or contravenes any condition subject to which an authorization
is issued by the Reserve Bank, he shall, upon adjudication,
be liable to a penalty up to thrice the sum involved in
such contravention where such amount is quantifiable,
or up to two lakh rupees where the amount is not quantifiable,
and where such contravention is a continuing one, further
penalty which may extend to five thousand rupees for every
day after the first day during which the contravention
continues.
Any Adjudicating Authority adjudging any contravention
may, if he thinks fit in addition to any penalty which
he may impose for such contravention direct that any currency,
security or any other money or property in respect of
which the contravention has taken place shall be confiscated
to the Central Government and further direct that the
foreign exchange holdings, if any, of the persons committing
the contraventions or any part thereof, shall be brought
back into India or shall be retained outside India in
accordance with the directions made in this behalf.
"Property" in respect of which contravention
has taken place, shall include deposits in a bank, where
the said property is converted into such deposits, Indian
currency, where the said property is converted into that
currency; and any other property which has resulted out
of the conversion of that property.
If any person fails to make full payment of the penalty
imposed on him within a period of ninety days from the
date on which the notice for payment of such penalty is
served on him, he shall be liable to civil imprisonment.
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Investigation |
The Directorate of Enforcement investigate to prevent
leakage of foreign exchange which generally occurs through
the following malpractices :
- Remittances of Indians abroad otherwise than through
normal banking channels, i.e. through compensatory
payments.
- Acquisition of foreign currency illegally by person
in India.
- Non-repatriation of the proceeds of the exported
goods.
- Unauthorised maintenance of accounts in foreign
countries.
- Under-invoicing of exports and over-invoicing of
imports and any other type of invoice manipulation.
- Siphoning off of foreign exchange against fictitious
and bogus imports.
- Illegal acquisition of foreign exchange through
Hawala.
- Secreting of commission abroad.
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