Effective opportunity in penalty proceedings required remand after the defence was not properly heard.

Denial of an effective opportunity to present the defence justified quashing the penalty order under the Foreign Exchange Regulation Act, 1973. The appellant said the original exchange control copy of the bill of entry had been given to the authorised dealer and that notices were not effectively received after a change of office address. As the defence had not been properly placed before the adjudicating officer, the Tribunal held that fairness required a further opportunity. The matter was remanded for fresh adjudication, with no opinion expressed on the merits.

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Issues: Whether the impugned penalty order passed for alleged contravention of sections 8(3) and 8(4) of the Foreign Exchange Regulation Act, 1973 deserved to be set aside and the matter remanded for fresh adjudication on account of denial of effective opportunity.

Analysis: The appellant asserted that the original exchange control copy of the bill of entry had been submitted to the authorized dealer and that the relevant notices had not been effectively received after the change of office address. In the circumstances, the appellant had not been able to place its defence before the adjudicating officer. The Tribunal considered that, in fairness, the appellant should be given another opportunity to explain its case. The order was therefore quashed and the matter sent back for reconsideration without expressing any opinion on the merits.

Conclusion: The remand for fresh adjudication was justified and the penalty order could not stand.

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