2005 (12) TMI 613 - AT - FEMA

Tribunal Partially Allows Appeals: Export Proceeds Penalties Reduced to 10%, RBI Write-Off Penalties Set Aside.

Om Enterprises Versus Directorate of Enforcement

The Appellate Tribunal partially allowed appeals challenging an Adjudication Order under the FER Act concerning export proceeds repatriation. While ... - Issues:Challenge to Adjudication Order imposing penalties for contravention of FER Act provisions regarding repatriation of export proceeds. Interpretation of RBI write-off and its impact on legal obligations. Consideration of efforts made by exporters in repatriation process. Determination of penalties based on the amount of export proceeds involved.Analysis:1. Challenge to Adjudication Order:The Appellate Tribunal reviewed appeals challenging an Adjudication Order imposing penalties for contravention of FER Act provisions related to repatriation of export proceeds. The penalties were imposed on multiple appellants for failing to take reasonable steps for repatriation of specific amounts.2. Interpretation of RBI Write-off:The appellants argued that the RBI's grant of write-off absolved them of legal obligations. They cited previous cases to support their contention. However, the Tribunal noted that despite the write-off, the exporters failed to show concrete efforts in repatriation, leading to contravention of FER Act provisions.3. Efforts in Repatriation Process:The Tribunal highlighted the importance of exporters making efforts to repatriate export proceeds, including engaging with buyers or pursuing legal action. The failure to demonstrate such efforts was considered a contravention of FER Act provisions, irrespective of the RBI's write-off.4. Determination of Penalties:The Tribunal analyzed the amounts involved in the export proceeds and differentiated between the write-off amount and the remaining balance. While the write-off amount was set aside due to RBI permission, the Tribunal upheld penalties for the remaining balance, emphasizing the substantial nature of the amount and the lack of efforts by the exporters.5. Conclusion and Decision:Based on the above analysis, the Tribunal partially allowed the appeals. The Tribunal sustained the guilt for the remaining balance of export proceeds but set aside penalties related to the write-off amount. The penalties were reduced to 10% of the total amount, considering the efforts made by the appellants. The pre-deposit made by the appellants was allowed to be appropriated towards the penalty amount, resulting in a partial allowance of the appeals.