2005 (7) TMI 739 - AT - FEMA

Tribunal Overturns Penalty, Acknowledging Appellant's Efforts to Secure Export Proceeds; Refund Ordered in 15 Days.

The Tribunal allowed the appeal, finding the adjudication order unsustainable in law. It quashed the penalty imposed for contravention of section 18(2) of ... - Issues:Challenge to adjudication order for contravention of FERA, 1973 and penalty imposition under section 18(2) - Efforts made by the appellant to realize export proceeds - Consideration of submissions and documents by the adjudication authority.Analysis:The appellant challenged the adjudication order passed by the Additional Director, Enforcement Directorate for contravention of section 18(2) of FERA, 1973 and imposition of a penalty of Rs. 2,00,000 on the appellant-firm. The appellant approached the Tribunal seeking dispensation of the penalty amount pre-deposit, which was partly allowed by the FERA Board. The appellant deposited Rs. 40,000 as directed but with a delay in the last installment. The Tribunal condoned the delay and proceeded with the appeal for final disposal on merits.The appellant was proceeded against for not taking all reasonable steps to realize export proceeds as declared in the GRIs. The appellant explained that the firm, started by inexperienced individuals, faced difficulties when the buyer encountered financial troubles. Despite efforts through correspondence, phone calls, and personal visits to Canada, the appellant could only realize partial payments. The appellant also pursued alternate buyers but faced challenges due to changes in fashion trends affecting the goods shipped. The appellant provided evidence of efforts made, including correspondence and telephone bills.The adjudicating authority found the appellant guilty of contravening section 18(2) of the Act for lack of sincere efforts in realizing export proceeds and imposed a penalty. The appellant challenged this order, arguing that they had made serious efforts and provided relevant documents, including approval for a partial payment by the Official Liquidator in Canada. The Tribunal examined the documents and concluded that the appellant had indeed made substantial efforts to recover the dues. The Tribunal noted that the adjudicating authority erred in not considering the appellant's efforts and set aside the impugned order, quashing the penalty imposed.In conclusion, the Tribunal found the impugned order unsustainable in law and allowed the appeal. The penalty imposed was quashed, and the pre-deposited amount of Rs. 40,000 was ordered to be refunded to the appellant within 15 days. The judgment emphasized the importance of considering the efforts made by the appellant in cases of alleged contravention of FERA provisions.