Foreign exchange penalty set aside where import remittances were supported by bank certificate and RBI waiver, with only technical lapse shown.

Remittances made toward imports were supported by the bank's certificate and the RBI waiver letter, covering all four remittances examined in the adjudication. The failure to produce the exchange control copy and bill of entry was treated as a technical lapse, not a continuing contravention of the foreign exchange law. As no subsisting violation remained to justify penal action under the Foreign Exchange Regulation Act, the penalty was held unsustainable and the adjudication order was set aside.

---

---

Issues: Whether the penalty for alleged contravention of section 8(3) read with section 8(4) of the Foreign Exchange Regulation Act, 1973, for non-submission of proof of import against remittance of foreign exchange, was sustainable.

Analysis: The remittances were supported by the bank's certificate and the Reserve Bank of India's waiver letter. The documentary material covered all four remittances referred to in the adjudication proceedings, and the failure to produce the exchange control copy and bill of entry was, in the circumstances, only a technical lapse. On that basis, no subsisting contravention of the foreign exchange law remained to justify the penalty.

Conclusion: The penalty could not be sustained and the adjudication order was liable to be set aside.

---