Export proceeds realisation requires timely reasonable efforts; RBI write-off relief and Special Director jurisdiction challenges failed.

An exporter under the foreign exchange law must take reasonable and timely steps to realise export proceeds within the prescribed period, and non-realisation triggers a rebuttable presumption of contravention. Mere correspondence with the foreign buyer is insufficient where recovery action is delayed beyond the statutory timeline. An RBI write-off or waiver mechanism operates only subject to its stated conditions, including compliance with any required surrender of export incentives, and cannot be relied on without proof of satisfaction of those conditions. A jurisdictional challenge to the Special Director was rejected because the statutory scheme and lawful entrustment authorised the officer to adjudicate.

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Issues: (i) whether the appellants had taken reasonable steps to realise the export proceeds and rebutted the statutory presumption of contravention; (ii) whether the RBI write-off policy or the alleged delay in recovery could exempt the appellants from penalty; (iii) whether the Special Director lacked jurisdiction to act as adjudicating authority.

Issue (i): whether the appellants had taken reasonable steps to realise the export proceeds and rebutted the statutory presumption of contravention.

Analysis: Under Section 18(2) of the Foreign Exchange Regulation Act, 1973, an exporter is required to take reasonable steps to secure realisation of export proceeds within the prescribed period. Section 18(3) creates a rebuttable presumption of contravention where payment is not realised within that period. Rule 8 of the Foreign Exchange Regulation Rules, 1974 prescribes the time limit for realisation. Mere correspondence with the foreign buyer, without more, was held insufficient in the circumstances, and the recovery suit was filed much after expiry of the prescribed period.

Conclusion: The statutory presumption was not rebutted and the finding of contravention was sustained.

Issue (ii): whether the RBI write-off policy or the alleged delay in recovery could exempt the appellants from penalty.

Analysis: The RBI circular relied on was treated as a delegated mechanism for waiver or write-off subject to specified conditions, including surrender of proportionate export incentives. No material was produced to show compliance with those conditions, and the power had not in fact been exercised in the appellants' favour. The discrepancy in the amount mentioned in the notice was also found immaterial because the adjudication and penalty were ultimately confined to the admitted unrecovered amount.

Conclusion: The appellants were not entitled to relief on the basis of the RBI circular or the alleged mismatch in amount.

Issue (iii): whether the Special Director lacked jurisdiction to act as adjudicating authority.

Analysis: The challenge based on hierarchy under Sections 3 and 50 of the Foreign Exchange Regulation Act, 1973 was rejected. The statutory scheme did not establish the asserted rank-based exclusion, and Section 5 empowered the Central Government to entrust functions of the Director of Enforcement to another officer. On that basis, the appointment and exercise of adjudicatory power by the Special Director were held valid.

Conclusion: The jurisdictional challenge failed and the adjudication order was upheld.

Final Conclusion: The penalties were affirmed, the appeals were found meritless, and the impugned adjudication order was maintained.

Ratio Decidendi: In export-realisation proceedings under the foreign exchange law, the exporter must rebut the statutory presumption by showing reasonable and timely efforts within the prescribed period, and a challenge to the adjudicating authority fails where the statute or delegated entrustment lawfully authorises the officer to act.

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