FERA export proceeds and partner liability turn on proof of reasonable recovery steps and personal attribution of contravention.

Non-realisation of export proceeds under FERA is not punishable per se where the exporter shows reasonable steps to recover the amount; correspondence with the authorised dealer, bank certification, and civil recovery efforts were sufficient to rebut the presumption of contravention, so the finding of guilt could not stand. A joint penalty on partners cannot be sustained without proof that each partner was responsible for the non-realisation or that the contravention occurred with their consent, connivance, or neglect under Section 68; in the absence of such attribution, the composite penalty was unsustainable and the adjudication order was set aside.

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Issues: (i) Whether the appellant had taken reasonable steps to realise the export proceeds so as to rebut the presumption of contravention under Section 18(2) and Section 18(3) of the Foreign Exchange Regulation Act, 1973. (ii) Whether joint penalty could be sustained against the partners without proof that the non-realisation was attributable to each of them under Section 68 of the Foreign Exchange Regulation Act, 1973.

Issue (i): Whether the appellant had taken reasonable steps to realise the export proceeds so as to rebut the presumption of contravention under Section 18(2) and Section 18(3) of the Foreign Exchange Regulation Act, 1973.

Analysis: The record showed that the appellant had realised proceeds in respect of the other export documents and that the outstanding amounts remained unpaid because the foreign buyer obtained delivery fraudulently. Correspondence with the authorised dealer, the bank's certificate, and the civil suit proceedings indicated continued efforts to recover the amount. The statutory scheme does not punish non-realisation by itself; liability arises only where reasonable steps are not taken, and the exporter can rebut the presumption by showing steps within the limits of the situation.

Conclusion: The appellant had taken reasonable steps and successfully rebutted the presumption of contravention; the finding of guilt could not stand.

Issue (ii): Whether joint penalty could be sustained against the partners without proof that the non-realisation was attributable to each of them under Section 68 of the Foreign Exchange Regulation Act, 1973.

Analysis: The adjudication order contained no adequate finding showing the role of each partner in the non-realisation of the export proceeds. Section 68 requires proof that the person proceeded against was in charge of and responsible for the conduct of business, or that the contravention occurred with consent, connivance, or neglect. In the absence of such proof, a composite penalty on the partners could not be justified.

Conclusion: The joint penalty on the partners was unsustainable.

Final Conclusion: The adjudication order was set aside in full and the appeal succeeded, with refund of the pre-deposit directed to the appellant.

Ratio Decidendi: In proceedings under FERA, non-realisation of export proceeds is not punishable per se if the exporter proves reasonable steps to realise the amount, and a joint penalty on partners cannot be sustained without specific proof of responsibility or attribution under Section 68.

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