1995 (12) TMI 429 - AT - FEMA

Summary

Issues:
- Imposition of penalties for non-realization of export proceeds under Foreign Exchange Regulation Act, 1973.
- Dispensing with the requirement of pre-deposit.
- Allegations of factual inaccuracies and unfair trial leading to penalties.
- Misconceptions by the Adjudicating Officer regarding evidence and agreements.
- Appellants' efforts to realize outstanding export proceeds and legal actions taken.
- Justification for setting aside the penalties imposed.

Analysis:

1. The judgment deals with an appeal against the imposition of penalties amounting to Rs. 2,50,000 each on the appellant for non-realization of export proceeds, contravening provisions of the Foreign Exchange Regulation Act, 1973. The penalties were imposed under sections 18(2), 18(3), and 68(1) of the Act.

2. The appellants sought dispensation from pre-deposit, arguing that they had initiated legal action and obtained a decree in their favor against the alleged outstanding amount. The Chairman waived the pre-deposit requirement, considering it would cause undue hardship to the appellants, and proceeded to hear the case on merits.

3. The appellant's counsel contended that the Adjudicating Officer's findings were based on wrong facts and omitted relevant evidence, resulting in a flawed adjudication order. The Chairman found merit in the submissions, noting factual inaccuracies in the order that led to a miscarriage of justice.

4. The Chairman highlighted discrepancies in the Adjudicating Officer's findings, such as misinterpretation of statements and misconceptions regarding agreements and actions taken by the appellants. The appellants' efforts to realize export proceeds, including legal actions against the foreign buyer, were deemed appropriate and diligent.

5. It was established that the appellants had taken prudent steps, including legal proceedings, to recover the outstanding export proceeds. The successful outcome of obtaining a decree against the foreign buyer was considered as strong evidence of the appellants' efforts in realizing the dues.

6. Consequently, the Chairman concluded that the appellants had taken sufficient measures to recover the export proceeds, and the finding of contravention under section 18(2) could not be upheld. As a result, both appeals were allowed, and the impugned order imposing penalties was set aside against the appellants.