Exchange control copies and import proof: procedural lapse alone did not establish foreign exchange contravention.

Documentary proof of import and confirmation by the authorised dealer that the exchange control copies of bills of entry were received and forwarded to the RBI meant the alleged lapse was only procedural. On that basis, non-production or inability to co-relate the bills of entry with the remittances did not establish contravention of sections 8(3) and 8(4) of the Foreign Exchange Regulation Act, 1973. The penalty order was therefore unsustainable, and the appeal succeeded with the pre-deposit refundable.

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Issues: Whether failure to produce or co-relate exchange control copies of bills of entry for the remittances constituted contravention of sections 8(3) and 8(4) of the Foreign Exchange Regulation Act, 1973.

Analysis: The appellant produced exchange control copies of bills of entry in respect of the remittances in question, and the authorised dealer confirmed receipt of those documents and their onward transmission to the Reserve Bank of India. In these circumstances, the lapse was treated as a procedural irregularity rather than a substantive violation. The finding of guilt, based on the alleged inability to correlate the bills of entry with the remittances, was therefore unsustainable.

Conclusion: The alleged contravention of sections 8(3) and 8(4) of the Foreign Exchange Regulation Act, 1973 was not made out, and the penalty order could not be sustained.

Final Conclusion: The appeal succeeded and the impugned penalty order was set aside, with consequential refund of the pre-deposit.

Ratio Decidendi: Where documentary proof of import is furnished and receipt by the authorised dealer is confirmed, a mere delay or lapse in submission of exchange control copies of bills of entry does not establish contravention under the foreign exchange law.

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