9911796707
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Issues:
1. Imposition of penalty under section 18(2) of the Foreign Exchange Regulation Act, 1973 for non-realization of export proceeds. 2. Dispute regarding the recovery efforts made by the appellant-firm. 3. Determination of the roles of partners in a partnership firm and liability for penalties. Analysis: Issue 1: Imposition of penalty under section 18(2) of the Foreign Exchange Regulation Act The appellants were penalized for non-realization of export proceeds totaling US $18,268.74, leading to contravention of section 18(2) of the Act. The adjudicating authority found the appellants in violation based on evidence including statements and invoice documents. The FERA Board ordered pre-deposit of penalties, which were made by two appellants. The appellants argued that reasonable steps were taken for recovery, including communication efforts and a foreign remittance certificate. However, the Board upheld the penalty, citing the appellants' failure to prove effective recovery efforts and the absence of clear documentation linking the remittance to the disputed export proceeds. Issue 2: Dispute regarding recovery efforts The appellants contended that they made reasonable recovery attempts, such as sending messages and meeting the buyer. They also presented a foreign remittance certificate and argued that the supervening stop payment instruction on a cheque hindered the encashment. However, the respondent argued that the efforts were insufficient, emphasizing the lack of continuous correspondence post-1990 and incomplete documentation. The Board noted the presumption against exporters for non-recovery and found the appellants' evidence insufficient to displace this presumption, ultimately upholding the penalty due to the appellants' failure to demonstrate effective recovery efforts. Issue 3: Determination of partners' roles in a partnership firm The appellants claimed that one partner was the managing partner responsible for the firm's affairs, while others were sleeping partners. They provided partnership registration certificates and individual partner statements supporting this claim. The Board acknowledged the managing partner's role in correspondence and day-to-day business management. Consequently, the penalty against the managing partner was upheld, while penalties against sleeping partners were set aside. The appellants were directed to deposit the remaining penalty amounts within a specified period. In conclusion, the Board dismissed the appeals of certain appellants, upheld penalties for non-realization of export proceeds, and clarified the liability of partners in a partnership firm based on their roles and responsibilities.
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