1992 (7) TMI 359 - AT - FEMA

Issues Involved:

1. Non-realization of export proceeds under GRI Form Nos. DEL-A. 6055139/A. 416575, DEL-B. 140499, B. 140500, DEL-B. 788364, and B. 788366.
2. Alleged contravention of Section 18(2) and Section 18(3) of the Foreign Exchange Regulation Act, 1973.
3. Adequacy of steps taken by the appellant to realize export proceeds.
4. Validity of the penalty imposed by the Adjudicating Officer.

Issue-wise Detailed Analysis:

1. Non-realization of Export Proceeds:

- GRI Form Nos. DEL-A. 6055139/A. 416575: The adjudication order initially found a delay in the realization of Rs. 6,860. However, evidence showed that the amount was paid by 1978, and thus, the charge of non-realization was not established.

- GRI Form Nos. DEL-B. 140499 and B. 140500: The appellant exported goods worth Rs. 1,03,900 but failed to repatriate the proceeds within the prescribed period. The appellant's claim that the buyer faced financial difficulties was not substantiated with timely actions or requests for extension from the RBI. The delay in efforts to recover the amount led to the confirmation of the contravention.

- GRI Form Nos. DEL-B. 788364 and B. 788366: The appellant exported goods worth Rs. 5,31,020 to a German buyer who later went into liquidation. The appellant did not take timely steps to recover the proceeds or seek RBI's extension. The failure to initiate legal action or approach the Indian Embassy further supported the finding of contravention.

2. Contravention of Section 18(2) and Section 18(3):

The appellant was found to have contravened Section 18(2) and Section 18(3) of the Foreign Exchange Regulation Act, 1973, due to the failure to realize export proceeds within the prescribed time or obtain necessary extensions from the RBI. The Board emphasized that merely informing the RBI or writing letters without taking concrete steps does not fulfill the requirement of taking "all reasonable steps."

3. Adequacy of Steps Taken by the Appellant:

The Board evaluated the appellant's actions against the standard of "reasonable steps," which include timely efforts to recover export proceeds and seeking RBI's permission for extensions. The appellant's delayed actions, lack of legal proceedings, and insufficient engagement with authorities like the RBI and Indian Embassy were deemed inadequate.

4. Validity of the Penalty:

The initial penalty of Rs. 5,50,000 was imposed for the contraventions. However, given that the charge related to GRI Form Nos. DEL-A. 6055139/A. 416575 was not established, the Board reduced the penalty to Rs. 5,45,000. The reduction acknowledged the partial compliance by the appellant but upheld the penalty for the remaining contraventions.

Conclusion:

The appeal was dismissed, confirming the findings of contravention for GRI Form Nos. DEL-B. 140499, B. 140500, DEL-B. 788364, and B. 788366. The penalty was reduced to Rs. 5,45,000, reflecting the partial success of the appellant in disproving one of the charges. The judgment underscores the importance of timely and proactive measures in compliance with foreign exchange regulations.

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