Foreign exchange penalty unsustainable where export proceeds were realised and bona fide recovery steps were shown.

Penalty for alleged foreign exchange contravention was held unsustainable where export proceeds were ultimately realised and the exporter had taken bona fide, reasonable steps to recover them. Bank certificates showed full realisation of the export value, and correspondence with the buyer, bank and Consulate General of India supported genuine recovery efforts. The absence of a legal notice was not treated as essential to prove effective steps. On that basis, the finding of contravention could not stand, and the adverse adjudication, including the penalty, was set aside with refund of the deposited amount.

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Issues: Whether the penalty for contravention of the foreign exchange law was sustainable when the export proceeds were ultimately realised and the exporter had taken reasonable steps for recovery.

Analysis: The record showed banker's certificates evidencing full realisation of the export value in respect of the concerned GRIs. The correspondence with the buyer, the bank, and the Consulate General of India supported the conclusion that substantial and bona fide efforts had been made to recover the export proceeds. The absence of a legal notice was held not to be essential to establish effective steps. As the export value had been recovered in full and the failure alleged against the appellant was not shown to amount to a sustained contravention, the adverse findings on liability could not stand.

Conclusion: The penalty and the finding of contravention were not sustainable and were set aside in favour of the appellant.

Final Conclusion: The appeal succeeded and the impugned adjudication order was annulled, with consequential refund of the deposited amount.

Ratio Decidendi: Where export proceeds are ultimately realised and the exporter demonstrates bona fide reasonable steps for recovery, a penalty for alleged non-realisation cannot be sustained.

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