Bona fide efforts to realise export proceeds defeat contravention where non-payment was beyond the exporter's control.

Failure to realise export proceeds within time does not establish contravention where the exporter shows bona fide and reasonable efforts to secure payment. Repeated attempts were made to recover the export dues, including requests for assistance from the RBI and other authorities, and the foreign buyer was ultimately untraceable. The record showed no inaction or lack of diligence by the exporters, who were small traders not reasonably expected to pursue recovery abroad. Subsequent receipt of the full export proceeds further supported the absence of breach. The penalty order was therefore unsustainable and was set aside.

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Issues: Whether the appellants had contravened the foreign exchange provisions by failing to realise export proceeds within the prescribed time despite making reasonable efforts.

Analysis: The export proceeds remained unrealised for some time, but the record showed repeated attempts by the appellants to secure payment, including requests for assistance to the RBI and other authorities. The foreign buyer was ultimately reported untraceable, and the appellants were small traders who could not reasonably be expected to pursue the matter abroad. The documentary material supported the conclusion that the failure to realise the proceeds was not due to inaction or lack of bona fide effort. The subsequent receipt of the entire export proceeds further supported the appellants' case.

Conclusion: The finding of contravention was not sustainable, and the appellants were not liable to be penalised for failure to make reasonable efforts under the foreign exchange provisions.

Final Conclusion: The impugned penalty order could not stand and was set aside in appeal.

Ratio Decidendi: Where the exporter shows bona fide and reasonable efforts to realise export proceeds, failure to secure payment by itself does not establish contravention of the statutory obligation to realise those proceeds within time.

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