2008 (11) TMI 752 - AT - FEMA

Tribunal Upholds Penalty for Failing to Repatriate Export Proceeds; Dismisses Appeal, Emphasizes Contextual Analysis.

The Appellate Tribunal for Foreign Exchange, New Delhi, upheld the penalty imposed on the appellant for failing to realize and repatriate export proceeds ... - Issues:- Failure to realize and repatriate outstanding export proceeds under FER Act, 1973- Appellant's contentions regarding RBI's failure to release funds, inaction of authorized dealer, and non-realization of export proceeds- Interpretation of sections 18(2) and 18(3) of FER Act, 1973- Examination of evidence regarding steps taken by the appellant for realization of export proceeds- Comparison of appellant's case with cited case law SRC Export Private Ltd. v. Director of Enforcement- Rebuttable presumption under section 18(3) of FER Act, 1973- Applicability of cited decision of erstwhile FERA Board- Consideration of penalty imposed and its justificationAnalysis:The judgment by the Appellate Tribunal for Foreign Exchange, New Delhi, pertains to an appeal against an adjudication order imposing a penalty on the proprietor of an appellant firm for failure to realize and repatriate outstanding export proceeds under the FER Act, 1973. The appellant had made a pre-deposit of a portion of the penalty amount as directed by the tribunal. The main contentions raised by the appellant included the RBI's alleged failure to release funds, the inaction of the authorized dealer, and the circumstances leading to the non-realization of export proceeds due to the foreign buyer's default and auction of goods by port authorities at the destination.The tribunal examined the provisions of sections 18(2) and 18(3) of the FER Act, 1973, emphasizing that an exporter is required to take reasonable steps for the realization of export proceeds. It highlighted that reasonableness is a factual determination and may vary case by case. The tribunal referenced Supreme Court observations on the definition of 'reasonable' to underscore the contextual nature of the term in legal proceedings.Regarding the evidence presented, the tribunal noted a lack of proactive steps taken by the appellant within the prescribed period for realizing export proceeds. Correspondence with port authorities and the RBI indicated delayed actions by the appellant, leading to adverse inferences against them. The tribunal also dismissed the appellant's reliance on the SRC Export Private Ltd. case, asserting that the factual context differed from the present case.The judgment delved into the applicability of the cited decision of the erstwhile FERA Board, emphasizing the need to consider factual nuances in legal precedents. It cautioned against blind reliance on past judgments without contextual analysis. The tribunal ultimately upheld the penalty imposed, deeming it neither excessive nor harsh, and dismissed the appeal. The appellant was directed to deposit the balance penalty amount within a specified timeframe, failing which the respondent could recover it in accordance with the law.