RBI write-off permission under foreign exchange law must be considered before finding exporter contravention and liability.

Section 18(2) of the Foreign Exchange Regulation Act, 1973 makes the exporter's obligation subject to Reserve Bank of India permission. The record showed an RBI letter granting write-off, but the adjudicating authority had not considered that permission before finding contravention. The write-off was also stated to be subject to surrender of proportionate incentives, which required examination before any final conclusion on liability could be reached. The adjudication therefore required reconsideration in light of the RBI permission and its conditions, and contravention could not be affirmed without that analysis.

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Issues: Whether permission granted by the Reserve Bank of India by way of write-off absolved the exporter from liability under section 18(2) of the Foreign Exchange Regulation Act, 1973 and whether the adjudication order required to be set aside for fresh consideration.

Analysis: Section 18(2) makes the exporter's obligation subject to the permission of the Reserve Bank of India. On the facts, the Reserve Bank's letter granting write-off was on record, and the adjudicating authority had not considered it. The write-off was also stated to be subject to surrender of proportionate incentives, which required examination by the adjudicating authority before any final conclusion on contravention could be reached.

Conclusion: The exporter could not be held guilty of contravention without considering the Reserve Bank's permission, and the matter had to be reconsidered by the adjudicating authority.

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