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TMI Blog2012 (9) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... partners of the said firm. For the sake of convenience, facts in Appeal No. 57 of 2009 are discussed in this order. 3. By the impugned order the Tribunal has sustained the findings of the Special Director, Enforcement Directorate, holding in terms of section 18(3) of FERA that the appellants did not take all reasonable steps to receive or recover the payments for the exported goods and therefore, shall be presumed to have contravened the provisions of sub section (2) of section 18 of FERA. The Tribunal has upheld the penalty of Rs. 8,00,000/- imposed on the firm M/s. Overseas Textile Corporation and Rs.60,000/- on each of the partners of the said firm. 4. This appeal has been admitted on 10th September, 2009. The appellants have raised several questions of law. During the course of hearing, the appeal has been pressed by the counsel on question Nos. 1 to 4 which are as follows : (1) Whether every non realization of export proceeds tantamount to a violation of S.18(2) of FERA? (2) Whether the department's failure to aver the necessary ingredients of S.18(2) was sufficient reason for the Show Cause Notice to be set aside? (3) Whether the actions of the firm were sufficien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sador of India informed the firm that he had requested the Councillor (Com) to follow up on the points raised in his message and suggested that the claim of the firm for recovery of dues from the assets of the said party was to be filed urgently. On 18th January, 1994 the Councillor (Economic and Commercial) from the office of Embassy of India informed the firm that on contacting the Receiver appointed in respect of the said party, he was informed that the Banks as per German Law shall have the first claim in a bankruptcy case and cash assets of DM 20,000/- only was left by the said party. He further informs that most of this amount will go towards defraying the legal costs and that the Indian creditors are not likely to get anything at all. 7. On 19th January, 1994 the Firm lodged its claim with the Insolvency Liquidator. On 22nd March, 1994 the Firm filed an application with the Judicial Administrator, District Court, Germany making its claim. Between the year 1994 and 1996, there was further correspondence exchanged between the Reserve Bank of India, Bank of Baroda and the firm. The firm submitted various documents from time to time to the Reserve Bank of India as well as Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from the liquidator in respect of the said party to RBI. On 16th February, 1999, statement of one of the partners of the firm was recorded by the Enforcement Directorate, Mumbai u/s. 40 of FERA. The partner submitted various details and documents while statement was recorded. On 23rd December, 1999 the Additional Director, Enforcement Directorate, FERA issued show cause notice to the firm as well as partners alleging that the firm as well as the partners who were incharge and responsible for the conduct of the business of the firm, had acted in contravention of the provisions of section 50 of the FERA in respect of 47 GRI forms totalling to DM 5,35,777/- equivallent to Rs.6,741975.76 and had rendered themselves liable to be proceeded under section 50 of the said Act. The firm as well as the partners filed reply to the said show cause notice contending that no violation was committed by the firm or the partners. The application for extension of period made by the firm was pending before the RBI. The firm had received part payments from the party barely about a week before the said party had applied for bankruptcy proceedings. The firm also filed written submissions before the Adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due export proceeds except approaching the RBI for extension of time; (v) In so far as partners are concerned, no material had been brought on record to show that they had exercised all due diligence to prevent contravention or that the contravention had taken place without their knowledge; (vi) penalty imposed when compared with the overdue export proceeds, was neither harsh nor excessive requiring any intervention from the tribunal. 13. We have heard the counsel and with their assistance, we have perused the record. 14. The learned counsel for the appellants made following submissions: (a) Application for extension for realization of export proceeds from the importer as well as application and reminders made to the Reserve Bank of India for writing off the outstanding was pending. It could not have been thus held that any violation of section 18(2) or (3) was committed by the appellants. (b) Various part payments were received from the importer in respect of various transactions. The last of such part payment was received by the firm on 26th December, 1993, i.e. few days prior to the importer filing an application for bankruptcy. Though the details in respect of part paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... showing that the contravention had taken place without his knowledge or that he had exercised due diligence to prevent such contravention. The learned counsel relied upon the finding of fact given by the tribunal. 16. The Supreme Court in the case of Bharat Carpets Vs. Director, Enforcement Directorate (2008)8 SCC 143 has held as under : "7...... According to Section 18(2) without general or special permission of the Reserve Bank of India, the exporter is required to repatriate the sale proceeds within the prescribed period of six months. Section 18(3) creates an rebuttable legal presumption against the exporter whenever the prescribed period expires without repatriation of the export proceeds to the effect that exporter had not taken requisite steps to obtain repatriation of the payment." 17. The question raised for consideration of this court is whether the exporter in this case had made reasonable efforts to repatriate the export proceeds within the prescribed or extended period and as to whether the exporter had rebutted the legal presumption who admittedly failed to receive and repatriate the export proceeds within the prescribed and or extended period. 18. In our view, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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