1997 (12) TMI 675 - AT - FEMA

Summary

Issues:
- Imposition of penalties on the appellant-company for failure to receive export proceeds
- Premature adjudication proceedings due to pending applications for write-off
- Setting aside the impugned order and allowing the appeal
- Communication between Enforcement Directorate and RBI regarding applications for write-off
- Role of RBI in decision-making process

Analysis:
The judgment addresses the imposition of penalties on the appellant-company for their failure to receive export proceeds, contravening the provisions of the Foreign Exchange Regulation Act, 1973. The appellant raised a point in their submission that applications for write-off of the outstanding amounts of export proceeds were pending consideration by the RBI. The Tribunal acknowledged this, stating that since the applications were under RBI's consideration, the adjudication proceedings were premature, and therefore, no penalty could be imposed on the appellant. As a result, the requirement of pre-deposit was waived, and the appeals were disposed of by a final order.

Furthermore, the Tribunal held that the impugned order passed based on premature adjudication proceedings was liable to be set aside. The appeal was allowed, and the impugned order was set aside against both appellants. However, it was clarified that the respondents could initiate fresh proceedings if necessary after the RBI made a decision on the appellants' applications. The judgment emphasized that the Enforcement Directorate should communicate with the RBI in cases where applications for extension of time or write-off were made, to ensure coordination and informed decision-making.

Additionally, the judgment highlighted the role of the RBI in decision-making processes, emphasizing that the RBI should make decisions independently without direct reference to the Enforcement Directorate, except for necessary information exchange. The Tribunal cited the Supreme Court's observation in LIC v. Escorts, emphasizing the autonomy of the RBI in such matters. Overall, the judgment focused on procedural fairness, coordination between regulatory bodies, and the independent decision-making authority of the RBI in matters related to foreign exchange regulations.