Repatriation of export proceeds presumption: limited correspondence was insufficient to rebut liability under foreign exchange law.

An exporter must take reasonably sufficient steps to secure repatriation of export proceeds within the prescribed or extended period under FERA, and section 18(3) raises a rebuttable presumption that reasonable steps were not taken if payment remains unrealised. The tribunal found that letters sent through the authorised banker and directly to the foreign buyer, together with an alleged visit by a representative, did not amount to effective recovery efforts sufficient to rebut that presumption. The penalty and adjudication order were therefore sustained, and the appeal failed.

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Issues: Whether the appellant had rebutted the statutory presumption that reasonable steps were not taken to repatriate export proceeds, and whether the penalty imposed for contravention of the foreign exchange law was sustainable.

Analysis: Under section 18(2) of the Foreign Exchange Regulation Act, 1973, an exporter is required to take reasonably sufficient steps to secure repatriation of export proceeds within the prescribed period or any extended period permitted by the Reserve Bank of India. Section 18(3) creates a rebuttable presumption that, on non-realisation of the export price after expiry of the prescribed period, the exporter has not taken all reasonable steps to recover the payment. The record showed only letters sent through the authorized banker and directly to the foreign buyer, along with an alleged visit by a representative, but no effective or proximate recovery effort capable of displacing the statutory presumption. The appellant therefore failed to rebut the presumption.

Conclusion: The penalty and adjudication order were sustained, and the appeal failed.

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