1992 (8) TMI 312 - AT - FEMA

Summary

Issues:
- Contravention of section 18(2) and section 18(2) read with section 68 of the Foreign Exchange Regulation Act, 1973
- Non-realization of export proceeds and imposition of penalties

Analysis:
1. The judgment pertains to appeals against an adjudication order imposing penalties on Bismi Tanning Co. and its Managing Partner for contravention of the Foreign Exchange Regulation Act. The penalties were imposed for non-realization of export proceeds in violation of section 18(2) and section 18(2) read with section 68 of the Act.

2. The case involved export bills pending realization, and the appellants failed to take action to secure the export proceeds within the prescribed period or the extended period by the RBI, leading to the contravention of section 18(2) of the Act.

3. The appellants cited financial difficulties as the reason for non-realization of export proceeds. Despite initiating legal proceedings in Germany and obtaining a decree for the amount, they could not execute it due to the inability to remit lawyer's fees, which was approved by the RBI. The appellants' explanations were scrutinized during the adjudication proceedings.

4. The Adjudicating Officer found the appellants guilty of contravention based on their failure to remit lawyer's fees, which directly impacted the non-realization of export proceeds. The RBI also highlighted the appellants' negligence in utilizing approved facilities for remittance.

5. The judgment delves into the interpretation of section 18(2) of the Act, emphasizing the obligation to take necessary steps to secure export proceeds. The Delhi High Court precedent in a similar case was referenced to establish the importance of fulfilling obligations without incurring excessive expenses.

6. Ultimately, the tribunal upheld the penalties imposed, dismissing the appeals due to the appellants' failure to demonstrate sufficient efforts to secure the export proceeds and remit necessary fees. The judgment reaffirmed the importance of fulfilling regulatory obligations under the Foreign Exchange Regulation Act.