1999 (9) TMI 1008 - AT - FEMA

Appeal Success: Penalty Under Foreign Exchange Regulation Act Overturned, Pre-Deposit to Be Refunded.

The appeal was allowed, and the impugned order imposing a penalty under the Foreign Exchange Regulation Act, 1973, was set aside. The Foreign Exchange ... - Issues:1. Penalty imposed for contravention of Foreign Exchange Regulation Act, 1973.2. Adjudication proceedings based on non-realization of export price.3. Dispensation of pre-deposit of penalty.4. Submission of certificates by the appellant as proof of realization of export proceeds.5. Correspondence and efforts made by the appellant to recover export proceeds.6. Recovery of export value from an alternate buyer for one GRI.7. Setting aside of the impugned order and refund of the deposited amount.Analysis:1. The judgment deals with an appeal against an Adjudication Order imposing a penalty on the appellant for contravening the provisions of the Foreign Exchange Regulation Act, 1973. The penalty was imposed for the non-realization of export prices in two specific instances. The appellant contested the allegations, leading to adjudication proceedings by the authority.2. The appellant was issued a show cause notice regarding the failure to realize export prices, following which adjudication proceedings were conducted. The Adjudication authority found the appellant guilty of non-realization of specific amounts in relation to two Goods Returnable Instruments (GRIs). The appellant disputed these findings in the appeal.3. The matter involved a request for dispensation of pre-deposit of the penalty amount. The Foreign Exchange Regulation Appellate Board directed the appellant to make a pre-deposit, which was done, and the appeal was then heard for final disposal on its merits.4. The appellant submitted certificates from the bank as evidence of the realization of the export proceeds in question. These certificates confirmed the receipt of the outstanding amounts related to the specific GRIs. The appellant argued that all necessary steps were taken to recover the export proceeds, including correspondence with relevant parties.5. The appellant presented a significant volume of correspondence, including letters to the buyer and the Consulate General of India, demonstrating efforts to recover the export proceeds. The appellant's actions, including seeking official help and making requests to the RBI, were aimed at realizing the export values. The appellant's contention was that these efforts were substantial and effective in recovering the amounts due.6. Regarding one of the GRIs, the appellant explained the delayed sale to an alternate buyer due to the original buyer's financial issues. The full export value was eventually recovered from the alternate buyer, absolving the appellant of any loss of foreign exchange to the nation in that instance. The recovery of the total amount for both GRIs was not disputed.7. The appeal was allowed, and the impugned order imposing the penalty was set aside. The appellant was directed to be refunded the pre-deposit amount within a specified timeframe. The judgment concluded in favor of the appellant, highlighting the successful recovery of the export values and the efforts made in that regard.