Reasonable steps for repatriation of export proceeds can rebut statutory presumption and defeat penalty under foreign exchange law.

An exporter can rebut the statutory presumption of default by showing reasonable steps to realise and repatriate export proceeds. Repeated follow-up with the foreign buyer, assistance sought from the Indian Consulate and the Ministry of External Affairs, reminders to the banker, and an RBI extension supported the finding that reasonable efforts were made. Since the proceeds were ultimately repatriated, the adverse presumption under section 18(3) stood displaced and penalty for contravention of section 18(2) of the Foreign Exchange Regulation Act, 1973 could not be sustained. A merely imperfect presentation of those efforts was not enough to justify penalty where the substance of compliance was established.

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Issues: Whether the appellant had taken reasonable steps for repatriation of export proceeds so as to rebut the adverse presumption under section 18(3) and avoid penalty for contravention of section 18(2) of the Foreign Exchange Regulation Act, 1973.

Analysis: The Tribunal found that the statutory obligation was only to take reasonable steps for realisation and repatriation of the export proceeds. The material on record showed repeated efforts to secure payment, including correspondence with the foreign buyer, assistance sought from the Indian Consulate and the Ministry of External Affairs, reminders to the banker, and an extension granted by the Reserve Bank of India up to 31-12-2001. The record also showed that the export proceeds were ultimately repatriated, and the Tribunal held that the adverse presumption under section 18(3) stood displaced. It further held that a lack of systematic presentation of efforts was not a valid basis for penalty when reasonable efforts were otherwise established.

Conclusion: The appellant was found not liable to penalty, and the impugned adjudication order was set aside.

Final Conclusion: The appeal succeeded because the appellant had proved reasonable efforts for recovery and repatriation of the export proceeds, thereby negating the contravention found by the adjudicating authority.

Ratio Decidendi: Where an exporter shows reasonable steps taken for recovery and repatriation of export proceeds, the statutory presumption of default can be rebutted and penalty cannot be sustained merely on an alleged deficiency in the manner of presentation of those efforts.

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