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Appeals against penalty imposed for contravention of Foreign Exchange Regulation Act, 1973 - Failure to repatriate export proceeds - Dispensation of pre-deposit - Partnership firm liability - Reasonableness of efforts to receive payment for exports. Analysis: The judgment by the Appellate Tribunal for Foreign Exchange involved appeals against a penalty imposed for contravention of the Foreign Exchange Regulation Act, 1973, due to the failure to repatriate export proceeds. The penalty was imposed on the appellant-firm and individual appellants as partners for contravening Section 18(2) r/w Section 18(3) and Section 68 of the Act. The appellants failed to take reasonable steps for repatriation of export proceeds amounting to US dollars 1850931.13 from goods exported through 23 GRIs. The Tribunal considered the application for dispensation of pre-deposit of penalty and allowed full dispensation for some appellants while requiring partial deposit for others. The appeals were taken up for final disposal on merits after the pre-deposit orders were complied with by the appellants. The parties were represented by their respective counsels, and written submissions were considered. The appellants contended that a partnership firm was constituted with them as partners, but subsequent changes in partners occurred. It was argued that efforts were made to convince the foreign buyer for remittance of export proceeds. However, the Tribunal noted that the efforts made, such as a visit by a partner to the foreign buyer in 1996, were not sufficient to meet the standard of 'reasonable efforts' required for repatriation of export proceeds. The Tribunal analyzed the legal provisions under Section 18 of the Foreign Exchange Regulation Act, 1973, which establish the duty of exporters to take reasonable steps to receive payment for exports within the prescribed period. The Tribunal emphasized that the statutory presumption under Section 18(3) is rebuttable but requires a deep consideration of the facts to displace it. The concept of 'reasonable' efforts was discussed, highlighting that mere visits may not suffice for large export values. In light of the facts and legal principles, the Tribunal allowed the appeals of individual partners but sustained the penalty against the appellant-firm. The judgment referenced previous decisions to support the distinction between partnership firm liability and individual partner liability. The quantum of penalty was deemed appropriate considering the contravention amount. The impugned order was modified, allowing the Enforcement Directorate to appropriate the pre-deposited amount towards penalty and requiring the remaining penalty to be deposited within a week. In conclusion, the appeals of individual partners were allowed, while the appeal of the appellant-firm was dismissed for lack of merit. The judgment clarified the liability of partners and the firm, emphasizing the need for reasonable efforts in repatriating export proceeds to comply with the legal provisions.
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