1998 (3) TMI 718 - AT - FEMA

Summary

Issues:
1. Imposition of penalty on appellant-firm for non-realisation of export proceeds.
2. Legal action against foreign buyer for non-payment.
3. Exoneration of another exporter, Ramesh Bros., for similar charges.
4. Discrepancy in the date of the outstanding GRI.
5. Import of rough emeralds and pending clearance.

Analysis:

1. The appeal arose from an Adjudication Order imposing a penalty on the appellant-firm for not realizing export proceeds, contravening the Foreign Exchange Regulation Act. The firm exported to Laxmi Diamond, USA, and a penalty was also imposed on the partners. Another exporter, Ramesh Bros., faced a similar issue with the same buyer, leading to legal action and a settlement involving rough emeralds.

2. Ramesh Bros. and the appellant initiated legal action against the foreign buyer, resulting in a settlement through a local court in the USA. The settlement included rough emeralds and costs, resolving outstanding payment issues. The Adjudicating Officer exonerated Ramesh Bros. from charges of non-realization, acknowledging their efforts in securing the settlement.

3. Ramesh Bros. was exonerated for non-realization charges, with details of their efforts documented in the adjudication order. The efforts made by Ramesh Bros. and the present appellant, including legal actions and securing settlements, were considered in the decision to drop proceedings against them.

4. A discrepancy in the date of the outstanding GRI was noted, impacting the conclusions drawn by the Adjudicating Officer. The incorrect date led to observations regarding the lack of efforts over seven years, influencing the decision-making process.

5. The appellant provided evidence of importing rough emeralds, pending clearance due to formalities related to the Bill of Entry. The Deputy Director's adjudication in Ramesh Bros.' case influenced the decision in this appeal, leading to the setting aside of the impugned order due to factual errors and inability to sustain the decision.

In conclusion, the appeal was allowed, and the penalty imposed on the appellant-firm and its partners was set aside based on the discrepancies in the adjudication order and the evidence presented regarding the efforts made to realize the export proceeds.