2005 (11) TMI 538 - AT - FEMA

Tribunal Confirms Penalty for Unpaid Export Proceeds Due to Insufficient Efforts by Appellant to Collect Payment.

The appellate tribunal upheld the penalty imposed on the appellant for failing to repatriate export proceeds of US $4062, citing inadequate efforts to ... - Issues:1. Failure to repatriate export proceeds2. Adequacy of steps taken to realize outstanding export proceeds3. Excessive penalty impositionIssue 1: Failure to repatriate export proceedsThe appeal was against an adjudication order imposing a penalty on the appellant for failing to repatriate export proceeds of US $4062 under GR No. 703670. The appellant, a proprietor of M/s. Sagar Industries, was found guilty of not taking reasonable steps to realize the export proceeds, leading to the penalty imposition.Issue 2: Adequacy of steps taken to realize outstanding export proceedsThe appellant contended that the penalty was excessive as they were unable to maintain livelihood, citing the closure of the foreign buyer's business and legal action by the bank. However, the respondent argued that the appellant failed to take any reasonable steps to realize the proceeds and did not provide evidence of efforts made. The appellant did not approach the RBI for a write-off or take legal actions to pressure the foreign buyer, as noted by the adjudicating authority.Issue 3: Excessive penalty impositionThe appellate tribunal examined Section 18(2) of the Act, emphasizing that a contravention occurs only if the exporter fails to take necessary actions within their control to secure payment. The tribunal found that the appellant did not produce documentary evidence of efforts to realize the outstanding proceeds and did not take proactive steps like involving the Indian High Commission or legal action. Consequently, the tribunal upheld the penalty imposition, dismissing the appeal and directing the appellant to deposit the penalty amount within 30 days.In conclusion, the judgment upheld the penalty imposition on the appellant for failing to repatriate export proceeds due to inadequate steps taken to realize the outstanding amount. The tribunal emphasized the importance of taking necessary actions within one's control to secure payment and found the appellant's contentions insufficient to warrant a reversal of the adjudicating authority's decision.