2001 (6) TMI 832 - AT - FEMA

Summary

Issues:
- Appeal against penalty imposed for contravening Foreign Exchange Regulation Act
- Condonation of delay in filing appeal
- Stay petition seeking dispensation of pre-deposit of penalty amount
- Non-realization of export proceeds and contravention of FERA provisions
- Adjudication proceedings and penalty imposition
- RBI permission for writing off unrealized export proceeds

Analysis:
The appeal was filed against a penalty imposed for contravening the provisions of section 18(2) and (3) of the Foreign Exchange Regulation Act, 1973. The appellant sought condonation of delay in filing the appeal beyond the limitation period, citing genuine doubts regarding the authority to which the appeal should be made. The delay was condoned considering the circumstances and the confusion regarding the appropriate appellate authority. The appellant also filed a stay petition, claiming a strong prima facie case in their favor and financial difficulties. The stay petition was allowed, dispensing with the pre-deposit of the penalty amount.

The case involved non-realization of export proceeds valued at Rs. 9,65,006, leading to adjudication proceedings under the FERA. The appellant responded to the show-cause notice, explaining the status of various G.R. forms and the reasons for non-realization. Despite the appellant's submissions, the Adjudicating Authority imposed a penalty of Rs. 90,000 for the contravention. However, at the appeal hearing, it was revealed that the RBI had granted permission to write off the unrealized export proceeds, making the basis for the penalty imposition invalid. The appellant had made efforts to realize the outstanding export proceeds and had applied to the RBI for necessary permissions.

Considering the RBI's permission to write off the unrealized export proceeds and the appellant's efforts to comply with regulatory requirements, the Tribunal set aside the impugned order and allowed the appeal. The appellant was not held guilty of contravening the FERA provisions, given the circumstances and the RBI's approval for writing off the outstanding export proceeds.