1986 (11) TMI 398 - AT - FEMA

Summary

Issues:
1. Contravention of provisions of Foreign Exchange Regulation Act, 1973 by not realizing export proceeds.
2. Imposition of penalties on the firm and partners.
3. Appeal against the order of the Adjudicating Officer.

Analysis:
The judgment pertains to a case where a firm and its partners were penalized for not realizing export proceeds amounting to Rs. 45,339.50 in respect of goods exported to West Germany in 1977, contravening sections 18(2) and 16(1) of the Foreign Exchange Regulation Act, 1973. The Adjudicating Officer imposed a penalty of Rs. 12,000 on the firm and Rs. 1,500 on each partner. The firm and partners appealed against this decision.

The appellate tribunal considered the arguments presented by both parties. The appellants contended that they had made all possible efforts to realize the export proceeds within the prescribed time but failed due to reasons beyond their control. They had approached the RBI for an extension of time and sought help from other authorities. The tribunal noted that the entire export proceeds had been realized as per a bank certificate dated 15-1-1986, which was submitted as evidence. The respondent, however, supported the Adjudicating Officer's finding.

The tribunal reviewed the timeline of events, showing that the appellants had made continuous efforts to recover the proceeds, including contacting the RBI, German Embassy, and Indian Embassy for assistance. The tribunal found that the Adjudicating Officer's adverse inference against the appellants was unjustified. The tribunal emphasized that the efforts made by the appellants were not of a casual nature and that the mere inability to realize the proceeds did not imply a failure to make reasonable efforts as required by the law.

Ultimately, the tribunal concluded that the appeals had merit, and the impugned order imposing penalties was set aside. The tribunal allowed the appeals, thereby overturning the decision of the Adjudicating Officer and absolving the firm and its partners of the penalties imposed.

In summary, the judgment highlights the importance of demonstrating genuine efforts to comply with legal obligations, even in cases where external factors hinder the desired outcome. The tribunal's decision underscores the need for a thorough review of the circumstances and evidence before penalizing parties for alleged violations of regulatory provisions.