Export proceeds non-realisation not a contravention when failure stems from bank handling and delay, not exporter default

Non-realisation of export proceeds under section 18(2) read with section 18(3) of the Foreign Exchange Regulation Act, 1973 was not established where the export bills were first sent to the wrong party and then delayed in forwarding to alternative buyers. The buyers' refusal to retire the documents flowed from the bank's handling of the bills and the resulting delay, not from any default by the exporter. On those facts, the alleged contravention failed, the penalty was unsustainable, and the adjudication order was set aside.

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Issues: Whether the appellant committed a contravention of section 18(2) read with section 18(3) of the Foreign Exchange Regulation Act, 1973 for non-realisation of export proceeds, and whether the penalty imposed was sustainable.

Analysis: The exported goods never reached fruition in the hands of the foreign buyer because the export bills were first sent to the wrong party and, thereafter, delayed in being forwarded to alternative buyers. The resulting refusal of the buyers to retire the documents flowed from the bank's handling of the bills and the consequent delay, not from any default attributable to the appellant. On these facts, the obligation to realise export proceeds could not be treated as having been breached by the appellant, and the findings in the impugned order were not supported by the record.

Conclusion: The alleged contravention was not made out and the penalty could not be sustained.

Final Conclusion: The appeal succeeded and the adjudication order imposing penalty was set aside.

Ratio Decidendi: Where export realisation fails because the export transaction itself is frustrated by circumstances not attributable to the exporter, a contravention for non-realisation of export proceeds is not established.

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