Export proceeds non-realisation triggers a rebuttable presumption, and penalty stands absent cogent proof of reasonable steps.

Non-realisation of export proceeds under section 18(2) of the Foreign Exchange Regulation Act, 1973 attracts the statutory scheme for export realisation, and proof of non-realisation raises a rebuttable presumption under section 18(3) that reasonable steps were not taken. The exporter must rebut that presumption with cogent evidence, such as timely requests for extension, alternate receipt permission, or write-off; absent such evidence, the penalty is sustainable. A show-cause notice that clearly alleges non-realisation is not vague merely because it is challenged, and no breach of natural justice arises without demonstrated denial of fair opportunity. A modest penalty will not be treated as excessive where it falls within the statutory framework.

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Issues: (i) whether penalty for non-realisation of export proceeds under section 18(2) of the Foreign Exchange Regulation Act, 1973 was justified; (ii) whether the appellant had rebutted the statutory presumption arising under section 18(3); (iii) whether the show-cause notice was vague or in breach of natural justice; and (iv) whether the penalty of Rs. 5,000 was excessive.

Issue (i): whether penalty for non-realisation of export proceeds under section 18(2) of the Foreign Exchange Regulation Act, 1973 was justified.

Analysis: Non-realisation of export proceeds within the prescribed time and in the prescribed manner attracted the statutory scheme governing export realisation. The appellant challenged the penalty on the footing that specific positive acts or omissions causing delay had not been shown, but the adjudicatory record showed contravention in respect of export proceeds that remained unrealised. The statutory obligation was to ensure realisation or to take the prescribed steps where realisation was not possible.

Conclusion: The penalty was justified and is upheld.

Issue (ii): whether the appellant had rebutted the statutory presumption arising under section 18(3).

Analysis: Once non-realisation of export proceeds was shown, the statutory presumption arose that reasonable steps for effective and due realisation had not been taken, and the burden shifted to the exporter to rebut that presumption with cogent evidence. The appellant did not discharge that burden. No timely approach to the Reserve Bank of India or authorised dealer for extension, permission for alternate receipt, or write-off was shown.

Conclusion: The statutory presumption was not rebutted and the finding is against the appellant.

Issue (iii): whether the show-cause notice was vague or in breach of natural justice.

Analysis: The notice clearly informed the appellant that proceedings were for non-realisation of export proceeds under section 18(2). The grounds of challenge did not establish any uncertainty in the notice or any denial of fair opportunity that would vitiate the proceedings.

Conclusion: The notice was not vague and there was no breach of natural justice.

Issue (iv): whether the penalty of Rs. 5,000 was excessive.

Analysis: The penalty imposed was modest compared with the maximum permissible penalty under the governing provision. In light of the amount involved and the statutory framework, no disproportion was demonstrated.

Conclusion: The penalty was not excessive.

Final Conclusion: The appeal failed on all substantial grounds and the penalty order was sustained in full.

Ratio Decidendi: In proceedings for non-realisation of export proceeds, proof of non-realisation raises a rebuttable statutory presumption against the exporter, who must then adduce cogent evidence of reasonable steps taken to secure realisation or authorised relief, failing which the penalty order is sustainable.

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