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Issues:
Violation of Foreign Exchange Regulation Act, 1973 - Contravention of section 18(2) and 18(3) - Imposition of penalty - Appeal against Adjudication Order - Request for waiver of pre-deposit - Consideration of financial position of the appellant - Efforts made to realize export proceeds - Reduction of penalty - Appellant's financial hardship - Appeal partially allowed - Reduction of penalty from Rs. 22 lakhs to Rs. 7 lakhs. Detailed Analysis: 1. The appeal was filed against an Adjudication Order imposing a penalty of Rs. 22 lakhs on the appellant for contravening section 18(2) and 18(3) of the Foreign Exchange Regulation Act, 1973. The allegation was related to the failure to realize the export proceeds of diamonds valued at US $1,87,973.28, equivalent to Rs. 22,84,550 at the time of export. 2. The appellant did not deposit the penalty amount nor filed a petition as required by the Adjudication Proceedings & Appeal Rules. However, he requested the appeal to be admitted without making any payment. 3. The appellant's request for waiver of pre-deposit was initially not satisfied by the Tribunal. Still, another opportunity was given for the appellant to make submissions regarding his financial position and reasons for not paying the penalty. 4. The appellant appeared before the Tribunal and submitted a hand-written petition detailing his financial difficulties, efforts made to recover the export proceeds, and a plea to waive the penalty due to his inability to pay. 5. The appellant's representative argued that there was a strong prima facie case for success in the appeal, mentioning efforts to realize the export proceeds by contacting the Indian Consulate in New York. 6. The Tribunal decided to dispense with the requirement of pre-deposit as the appellant was not challenging the contravention findings but only seeking a reduction in the penalty amount. The appeal was disposed of without insisting on the pre-deposit. 7. The appellant submitted a written petition requesting a reduction in the penalty amount as per the Tribunal's directions. 8. The appellant's representative argued that despite efforts to recover the export proceeds and substantial business losses incurred, the penalty imposed was excessive. The appellant's business had closed down, and he was struggling financially. 9. The respondent contended that the appellant never intended to realize the amount owed, only sending letters to the foreign buyer without taking effective steps. The appellant's visits to the USA were questioned for their purpose and effectiveness in recovering the outstanding amount. 10. After hearing both parties, the Tribunal found that the appellant's evidence of efforts to recover the amount was not effective. While considering the appellant's financial position as a mitigating factor, the penalty was deemed excessive and reduced to Rs. 7 lakhs to meet the ends of justice. 11. The appeal was partly allowed, upholding the contravention finding but reducing the penalty amount from Rs. 22 lakhs to Rs. 7 lakhs. 12. The appellant was granted 45 days to pay the reduced penalty amount, failing which the respondent could recover the sum according to the law.
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