Export proceeds non-realisation triggers a rebuttable presumption, while unauthorised foreign exchange acquisition remains an independent contravention.

Failure to realise export proceeds within the prescribed time triggered the statutory presumption of contravention, and that presumption was not rebutted because no credible evidence showed bankruptcy of the overseas buyer or effective recovery efforts; the firm's penalty was sustained. On the question of liability, the firm and its partner were not separately penalised for the same export-proceeds breach, so the partner was absolved of that component. A separate contravention for unauthorised acquisition of foreign exchange was independently established against the partner because misuse of a domestic credit card without RBI permission was proved, and that penalty was upheld.

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Issues: (i) Whether the appellants had failed to take reasonable steps to realise the outstanding export proceeds so as to attract contravention under section 18(2) and the rebuttable presumption under section 18(3) of the Foreign Exchange Regulation Act, 1973. (ii) Whether the firm and its partner could both be penalised for the same contravention, and whether the charge under section 8(1) of the Foreign Exchange Regulation Act, 1973 was established against the partner.

Issue (i): Failure to realise export proceeds within the prescribed time attracted the statutory presumption under section 18(3), which could be displaced only by proof of all reasonable steps taken to recover the dues.

Analysis: The appellants did not produce reliable evidence of bankruptcy of the overseas buyer or of effective efforts to recover the dues. They also did not pursue the course indicated by the Reserve Bank, including seeking extension or taking other remedial steps. The material on record did not rebut the statutory presumption, and the explanation that the non-realisation was beyond control was not accepted.

Conclusion: The finding of contravention under section 18(2) read with section 18(3) was upheld, and the penalty on the firm was sustained; this issue was decided against the appellants.

Issue (ii): Whether both the firm and its partner could be penalised for the same contravention, and whether the partner's misuse of the domestic credit card amounted to contravention under section 8(1).

Analysis: For the export-proceeds contravention, the firm and its partner were treated as not separately liable for the same breach, and the partner was absolved of that penalty while the firm remained liable. As to the foreign exchange acquired abroad by misuse of the domestic credit card, the partner failed to substantiate the plea that the card had been lost, and the acquisition of foreign exchange without RBI permission was established.

Conclusion: The penalty for the export-proceeds contravention was shifted to the firm alone, while the partner was absolved of that component; the separate penalty under section 8(1) against the partner was upheld.

Final Conclusion: The appeals were allowed only to the limited extent of deleting the partner's liability for the export-proceeds contravention, while sustaining the firm's penalty and the partner's separate penalty for unauthorised acquisition of foreign exchange.

Ratio Decidendi: Under the Foreign Exchange Regulation Act, 1973, failure to realise export proceeds is excused only when the exporter proves all reasonable steps to recover the dues, and the statutory presumption remains unrebutted in the absence of credible evidence; a separate foreign exchange acquisition without RBI permission constitutes an independent contravention.

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