2004 (5) TMI 626 - AT - FEMA

Summary

Issues:
Charges of contravention of section 18(2) and 18(3) read with section 68(1) of FERA, 1973.

Analysis:
The judgment pertains to appeals directed from an order of the Directorate of Enforcement under FERA, 1973, regarding charges of contravention of specific sections. The noticees, including partners of a concern, were found guilty and penalized. The appeals challenged the legality and validity of the orders, along with applications for dispensation of pre-deposit of penalty. The main issue for decision was whether any illegality or infirmity affected the impugned orders.

During the hearing, the appellant's counsel argued that the adjudicator had denied natural justice by not providing copies of crucial documents, leading to irreparable loss. The appellants contended that they had taken all reasonable steps for realizing export proceeds, including reminders and communication with foreign buyers. The appellant's case highlighted the importance of efforts made for realizing dues rather than the actual realization. The counsel referenced relevant case law to support their arguments.

The adjudicating officer's failure to consider all correspondence and outstandings from various buyers was noted. The appellants had maintained contact with the RBI and the authorized dealer, keeping them informed about the realizations and reasons for non-realization from certain buyers. The counsel emphasized that the firm had initiated reasonable steps for realizing dues, as evidenced by the correspondence presented during the proceedings.

It was argued that the pending bills for realization were limited to three specific GRs, with all other proceeds duly realized. The appellant's counsel assured that the remaining amounts under the outstanding GRs would be realized in due course. The impugned finding was deemed legally flawed and set aside, leading to the cancellation of the penalty orders as well.

In conclusion, the appeals were allowed, and the impugned findings and penalty orders were set aside based on the arguments presented regarding the reasonable steps taken by the appellants for realizing the export proceeds.