2007 (12) TMI 558 - AT - FEMA

Tribunal Upholds Penalty for Failure to Repatriate Export Proceeds Under FER Act; Appeal Dismissed Due to Non-Representation.

M.R.G.G. International Versus Enforcement Directorate

M.R.G.G. International Versus Enforcement Directorate - TMI Issues:1. Appeal against adjudication order for contravention of FER Act.2. Failure to take reasonable steps for repatriation of export proceeds.3. Ex parte disposal of appeal due to non-representation of the appellant.4. Legal obligation of exporters for repatriation of export proceeds.5. Presumption under section 18(3) of FER Act.6. Interpretation of the term 'reasonable' in the context of exporter's duty.7. Delegation of waiver power by RBI to authorized dealers.8. Lack of specific steps taken by the appellant to recover export proceeds.9. Rejection of appellant's contentions due to lack of reasonable efforts.10. Dismissal of the appeal and maintenance of the impugned order.Analysis:The judgment pertains to an appeal against an adjudication order for contravention of the Foreign Exchange Regulation (FER) Act due to the appellant's failure to take reasonable steps for repatriation of export proceeds. The appeal was disposed of ex parte as the appellant neither appeared nor was represented despite multiple notices. The Tribunal considered the legal obligation of exporters to make reasonable efforts for repatriation, emphasizing that the end result of receiving payment is not the sole criterion. The provisions of section 18(2) and 18(3) of the FER Act were cited to highlight the exporter's duty in this regard.The judgment discussed the presumption under section 18(3), stating that if an exporter does not receive payment within the prescribed period, it is presumed that reasonable steps were not taken. The Tribunal highlighted the rebuttable nature of this presumption and the need to assess whether the steps taken can displace it. The term 'reasonable' was analyzed, emphasizing that it depends on the particular facts of each case and the efforts made by the exporter in the given circumstances.Regarding the delegation of waiver power by the RBI to authorized dealers, the appellant's reliance on this delegation was dismissed as the qualifying conditions were not met, and the Tribunal could not exercise the delegated power. The lack of specific steps taken by the appellant to recover export proceeds, coupled with the substantial amount involved, led to the rejection of the appellant's contentions as lacking in reasonable efforts. The appeal was ultimately dismissed for lack of merit, and the impugned order imposing a penalty was upheld, with the appellant directed to deposit the penalty promptly.