2004 (2) TMI 746 - AT - FEMA

Summary

Issues:
- Violation of Foreign Exchange Regulation Act, 1973
- Failure to repatriate export proceeds
- Imposition of penalty
- Delay in filing appeal
- Mitigating circumstances for penalty reduction

Analysis:

The judgment involves appeals from an order of the Assistant Director of Enforcement Directorate under the Foreign Exchange Regulation Act, 1973, concerning contravention charges. The charges revolved around the failure to repatriate export proceeds without permission, leading to penalties imposed on a firm and its partners. The appeals contested the legality and excessiveness of the penalties.

The primary issue was whether intervention by the Appellate Tribunal was warranted in the impugned orders. The appellants argued that they received the adjudication order after the prescribed time for filing an appeal, while the respondent contended that the order was issued earlier. The Tribunal accepted the appellants' claim due to lack of acknowledgment and ruled there was no delay in filing the appeals.

Regarding the failure to repatriate export proceeds, the appellants cited circumstances beyond their control, such as political developments in the USSR leading to the defunct status of the foreign buyer. They claimed efforts were made for realization, including seeking waiver from the RBI. However, the Tribunal found that the efforts were insufficient and untimely, upholding the contravention charges based on statutory presumptions under the Act.

In assessing the penalty, the Tribunal acknowledged the absence of criminal intent or guilty mind in the appellants' actions. Considering mitigating factors, the penalties were reduced significantly to Rs. 3,000 for the firm and Rs. 1,000 each for the partners. The modified penalties were deemed appropriate given the circumstances and lack of mens rea.

In conclusion, the Tribunal upheld the contravention findings but reduced the penalties based on the absence of intent. The penalty amounts were modified to Rs. 3,000 for the firm and Rs. 1,000 for each partner. The Directorate was tasked with realizing the revised penalty amounts as per the judgment.