2008 (7) TMI 38 - SC - Customs

Penalty violation of sec.18 (2) 18(3) of FERA - non-realisation of export proceeds even after intimation to authorized banker by appellants not to deliver goods to original consignee, goods were delivered to original consignee, not to new consignee hence for negligence of banker, appellants can t be held guilty of violation of above sections in respect of another consignment, sale proceeds have not been repatriated within prescribed time, hence penalty are justified but reduced

Summary

Issues:
Challenge to judgment of the Appellate Tribunal for Foreign Exchange regarding penalty imposed for violation of Foreign Exchange Regulation Act, 1973.

Analysis:
1. The appeal challenged the judgment of the Appellate Tribunal for Foreign Exchange, New Delhi, regarding a penalty imposed for alleged violation of Section 18(2) and 18(3) of the Foreign Exchange Regulation Act, 1973. The penalty was imposed on the appellant firm and two partners for non-realization of export proceeds within the stipulated period. The Show Cause Notice issued to the appellants detailed the contraventions and the amounts involved, totaling Rs. 5,12,171. The appellants responded, explaining the circumstances leading to the non-realization of export proceeds, attributing it to the actions of the authorized banker and financial difficulties faced by the consignee.

2. The appellants contended before the Tribunal that they had taken timely actions to redirect the consignment to a new consignee due to the weak financial position of the original consignee. They argued that the negligence of the authorized banker led to the delivery of goods to the old consignee, causing the non-realization of export proceeds. The appellants emphasized that the goods did not reach the intended consignee, thus disputing the classification of the goods as exported under the Act.

3. The Tribunal accepted the appellants' contentions regarding one consignment but found them guilty in the case of the other consignment due to a lack of evidence regarding the repatriation of export proceeds. The Tribunal reduced the penalty imposed on the present appellant but upheld the violation of Section 18(2) of the Act. The appellants argued that the bank's deficiency should absolve them of guilt, while the respondent maintained that the impugned order was justified as the export proceeds were not repatriated within the prescribed period.

4. The respondent contended that the appellants failed to repatriate the export proceeds even long after the export, justifying the penalty imposed. The Tribunal's decision was based on the legal requirements under Section 18(2) and 18(3) of the Act, emphasizing the obligation to repatriate sale proceeds within the specified timeframe. The Tribunal found no merit in the appeal, dismissing it based on the lack of material regarding steps taken for repatriation and the legal presumption against the exporter in case of non-repatriation.

5. The judgment highlighted the legal provisions under the Act, emphasizing the exporter's duty to repatriate sale proceeds within the specified period. The Tribunal's decision was based on the evidence presented and the appellants' failure to demonstrate efforts towards repatriation. The appeal was dismissed, affirming the Tribunal's findings and upholding the penalty imposed for the violation of the Foreign Exchange Regulation Act, 1973.