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Issues: Alleged contravention of section 12(2) of the Foreign Exchange Regulation Act, 1947 in relation to exports of cotton piece goods to the United Kingdom and failure to repatriate funds, imposition of penalty by the Director of Enforcement, adequacy of steps taken by the appellants to realize outstanding amounts, and the decision of the Appellate Tribunal.
Analysis: The judgment by the Appellate Tribunal involved proceedings initiated against the appellants for contravening section 12(2) of the Foreign Exchange Regulation Act, 1947, concerning exports of cotton piece goods to the United Kingdom. The Director of Enforcement exonerated the appellants for certain exports but held them guilty for not repatriating a sum due from Rentonica Ltd. of Manchester, imposing a penalty of Rs. 5,000. The appellants argued that they had a history of exporting textiles without complaints of non-repatriation, and explained the circumstances surrounding the non-repatriated amount due to them. The appellants admitted to altering the payment terms for a consignment at the buyer's request but contended that they took prudent business decisions to continue exports despite delayed payments. They presented evidence of correspondence with the Indian High Commissioner in London, demonstrating efforts to recover the outstanding amount. The Tribunal noted that the appellants had taken reasonable steps to recover the funds and that the director's basis for finding them guilty was not established. The Tribunal found that the appellants' decision not to file a lawsuit against the purchaser company, which later went into liquidation, was an error of judgment but not a penalizable offense under section 12(2). Therefore, the appeal was allowed, the director's order was set aside, and any penalty paid was to be refunded. The judgment emphasized the importance of assessing the adequacy of steps taken to recover outstanding amounts in cases of alleged contraventions of foreign exchange regulations.
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