Non-realisation of export proceeds under foreign exchange law sustained penalty, but later recovery justified reduction in quantum.

Non-realisation of export proceeds under foreign exchange law justified a finding of statutory contravention where the exporter failed to place a timely defence, produced no material showing reasonable efforts to recover the dues, and did not seek extension of time from the RBI. The outstanding export proceeds beyond the stipulated period therefore sustained liability to penalty. Later partial realisation and write-off of dues were relevant only to the limited question of quantum, not liability. The penalty was accordingly upheld in principle but reduced from Rs. 70,000 each to Rs. 20,000 each.

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Issues: Whether the penalty imposed for non-realisation of export proceeds under the foreign exchange law was sustainable and, if sustainable, whether the quantum of penalty required reduction.

Analysis: The appellant failed to place any timely defence before the enforcement authorities, did not show any material to establish reasonable efforts to realise the export proceeds from the foreign buyer, and did not seek extension of time from the Reserve Bank of India. The record showed that the export proceeds remained outstanding beyond the stipulated period, and the adjudicating authority was justified in finding contravention of the statutory requirements. At the same time, the later partial realisation and write-off of dues, though occurring after adjudication, were considered relevant only for the limited purpose of determining the penalty amount.

Conclusion: The finding of contravention and the liability to penalty were upheld, but the penalty was reduced from Rs. 70,000 each to Rs. 20,000 each.

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