Export proceeds realisation under FERA could not sustain penalty where bank certificates showed nil outstanding and full remittance.

Penalty for alleged non-realisation of export proceeds under section 18(2) read with section 18(3) of the Foreign Exchange Regulation Act, 1973 could not be sustained where the record showed full realisation and the bank certified nil outstanding. The impugned order wrongly proceeded on the footing that amounts relating to three GRIs remained unpaid, although the exports concerned only two relevant GRIs and the appellant had produced certificates confirming remittance and receipt of export proceeds. Reliance on earlier information was improper when later intimation showed realisation, and the plea of delayed realisation did not fit the basis of the order, which rested on non-receipt and an outstanding balance. The impugned penalty order was therefore liable to be set aside.

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Issues: Whether the penalty for alleged non-realisation of export proceeds under section 18(2) read with section 18(3) of the Foreign Exchange Regulation Act, 1973 could be sustained when the evidence showed that the export proceeds had in fact been realised and the bank had certified nil outstanding.

Analysis: The finding in the impugned order proceeded on the footing that amounts relating to three GRIs remained outstanding, whereas the record showed exports under only two relevant GRIs and the appellant had produced certificates of remittance and export proceeds from the bank confirming full realisation. The authority also appears to have relied on old information without verifying the later intimation that the proceeds had been realised in 1986. The plea that the matter was one of delayed realisation was not accepted, since the impugned order itself rested on an outstanding balance and non-receipt of the amount.

Conclusion: The penalty could not be sustained and the impugned order was liable to be set aside.

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