Non-realisation penalty for export proceeds was set aside after later recovery cured the default and weakened the basis for sanction.

Penalty for non-realisation of export proceeds was found unwarranted where the outstanding amount was realised during the pendency of the appeal and the appellant had shown pursuit of recovery. On the facts brought on record, the default stood cured by actual receipt of the export proceeds, so the basis for continuing the penalty no longer remained compelling. The penalty was accordingly set aside.

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Issues: Whether the penalty imposed for non-realisation of export proceeds was sustainable in view of the subsequent realisation of the outstanding amount and the circumstances explained by the appellant.

Analysis: The outstanding export proceeds in respect of which penalty had been imposed were realised during the pendency of the appeal. On the facts stated in the appeal and the subsequent development brought on record, the basis for sustaining the penalty no longer remained compelling. The material placed before the Tribunal showed that the appellant had been pursuing recovery and that the default stood cured by actual receipt of the amount.

Conclusion: The penalty was held to be unwarranted and was set aside.

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