Reasonable steps to realise export proceeds defeated foreign exchange penalty where repeated follow-up proved genuine recovery efforts.

Reasonable steps to realise export proceeds were taken where the record showed repeated correspondence, reminders, fax messages and sustained follow-up with the foreign buyers, the RBI and the authorised dealer. The failure to recover the outstanding amounts was attributable to circumstances beyond the appellants' control, and the absence of legal action against the buyers was not, by itself, decisive. On those materials, the appellants were found to have made sufficient efforts to realise the dues, so the finding of contravention and the consequential penalties could not stand and were set aside.

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Issues: Whether the appellants had taken reasonable steps to realise the export proceeds so as to avoid contravention of the foreign exchange law and the consequent penalty.

Analysis: The record showed repeated correspondence, reminders, fax messages and follow-up with the foreign buyers, the Reserve Bank of India and the authorised dealer. The failure to recover the outstanding amounts was attributable to circumstances beyond the appellants' control, and non-initiation of legal action against the buyers was not, by itself, decisive. On the materials placed, the appellants had made reasonable efforts to realise the dues.

Conclusion: The finding of contravention and the consequential penalties were unsustainable and were set aside in favour of the appellants.

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