Non-realisation of export proceeds: contravention upheld, but penalty reduced after considering mitigating financial hardship.

Contravention for non-realisation of export proceeds under section 18(2) read with section 18(3) of the Foreign Exchange Regulation Act, 1973 was maintained because there was no satisfactory evidence that effective recovery steps had been taken. Mere correspondence with the foreign buyer, without concrete action or a realistic prospect of recovery, was insufficient. The appellant's financial condition was treated as a mitigating factor, and the penalty was found excessive. Balancing culpability and hardship, the Tribunal reduced the penalty and held that a lower amount would meet the ends of justice.

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Issues: Whether the appellant, while the finding of contravention under section 18(2) read with section 18(3) of the Foreign Exchange Regulation Act, 1973 was maintained, was entitled to reduction of the penalty imposed for non-realisation of export proceeds.

Analysis: The Tribunal found no satisfactory evidence that the appellant had taken effective steps to realise the outstanding export proceeds. Mere correspondence with the foreign buyer, without material showing a realistic prospect of recovery or concrete action likely to secure payment, was insufficient. At the same time, the appellant's financial condition was treated as a relevant mitigating factor. Balancing culpability against hardship, the Tribunal held that the original penalty was excessive and that a lower penalty would meet the ends of justice.

Conclusion: The finding of contravention was upheld, but the penalty was reduced from Rs. 22 lakhs to Rs. 7 lakhs in favour of the appellant.

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