Reasonable steps to realise export proceeds can defeat export default penalties on identical facts.

An exporter avoids contravention of export realisation requirements where it shows reasonable and bona fide recovery efforts, including legal notices, civil proceedings, correspondence with the RBI and the authorised dealer, and other steps taken to recover outstanding GR form proceeds. The Tribunal held that the adequacy of the efforts, not their number, is the relevant test. It further treated the Delhi High Court's later quashing of the connected criminal complaint on identical facts as materially relevant to whether the alleged default was established. On that basis, no contravention of Sections 18(2) and 18(3) of FERA was made out and the adjudication penalty was set aside.

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Issues: Whether the appellants had taken all reasonable steps to realise and repatriate the export proceeds so as to avoid contravention of Sections 18(2) and 18(3) of the Foreign Exchange Regulation Act, 1973 read with the relevant Central Government notification, and whether the adjudication penalties could stand in view of the Delhi High Court's later order quashing the connected criminal complaint on the same facts.

Analysis: The record showed that the exporter had pursued recovery through legal notices, civil suits, correspondence with the Reserve Bank of India and the authorised dealer, and other recovery measures in respect of the outstanding GR forms. The test was not the number of steps taken but their adequacy as reasonable steps for recovery. On the same factual matrix, the Delhi High Court had examined the exporter's efforts and held that the proceedings were unsustainable because the appellants had taken reasonable and effective steps and the complaint was liable to be quashed. The Tribunal held that, although adjudication and criminal proceedings are distinct, a finding in a criminal proceeding on identical facts cannot be ignored where it directly bears on whether the alleged contravention is made out.

Conclusion: No contravention of Sections 18(2) and 18(3) of the Foreign Exchange Regulation Act, 1973 was established, and the penalty order could not be sustained.

Final Conclusion: The appellants were held not liable for the alleged export realisation default and the impugned adjudication order was set aside.

Ratio Decidendi: Where an exporter demonstrates reasonable and bona fide steps to realise export proceeds, the mere existence of outstanding amounts does not establish contravention; findings in a later criminal order on identical facts may be given decisive weight in reassessing the adjudication outcome.

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