Procedural lapse in exchange control documentation was not a substantive FERA contravention once alternative import proof was accepted.

Failure to furnish the exchange control copy of the bill of entry was treated as a procedural lapse, not a substantive contravention under section 8(3) and section 8(4) of the Foreign Exchange Regulation Act, 1973, where the importer produced alternative documents and the Reserve Bank of India accepted them as proof of import and use. Once that alternative evidence was accepted, the basis for penalty ceased to exist, and the penalty order was held unsustainable.

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Issues: Whether the appellant's failure to furnish the exchange control copy of the bill of entry constituted a contravention under section 8(3) and section 8(4) of the Foreign Exchange Regulation Act, 1973, or only a procedural irregularity in view of the acceptance of alternative documents by the Reserve Bank of India.

Analysis: The appellant had imported the goods and later produced alternative documents to establish the import and use of the goods for the stated purpose. The Reserve Bank of India subsequently accepted those alternative documents as proof of import. In these circumstances, the omission to furnish the original exchange control copy was treated as a procedural lapse rather than a substantive breach. The basis for the penalty, therefore, did not survive once the alternative evidence was accepted.

Conclusion: The alleged contravention under section 8(3) and section 8(4) was not made out. The penalty order was unsustainable and the appeal succeeded.

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