Export proceeds repatriation requires timely diligence; eventual recovery alone does not avoid contravention, and penalty may be reduced.

Contravention of export-proceeds repatriation rules depends on whether the exporter took timely and bona fide reasonable steps to recover payment and sought Reserve Bank extension before expiry or promptly thereafter. Mere eventual recovery, or a bare assertion of difficulty, does not by itself negate breach. On the record, the charge was not established for shipments where payment had been substantially realised or delay was not shown to be blameworthy, but it was sustained where no effective steps were taken and RBI extension was not sought in time. The penalty was then reassessed and reduced to reflect only the upheld part of the contravention.

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Issues: (i) Whether the appellant had contravened the provisions relating to realisation and repatriation of export proceeds by failing to take reasonable steps and by not obtaining timely extension from the Reserve Bank of India; (ii) whether the penalty required modification in view of the extent of contravention established.

Issue (i): Whether the appellant had contravened the provisions relating to realisation and repatriation of export proceeds by failing to take reasonable steps and by not obtaining timely extension from the Reserve Bank of India.

Analysis: The liability turned on whether reasonable and timely efforts were taken to recover the export proceeds and whether permission or extension was sought before the prescribed period expired or immediately thereafter. Where the record showed prompt correspondence, prior payment, or sufficient follow-up, the charge of non-realisation was not established. In contrast, where the exporter took no effective steps within the prescribed period, delayed seeking extension for years, and failed to show convincing justification for non-recovery, the omission was treated as a contravention. The Board applied the principle that mere eventual recovery, or mere assertion of difficulty, does not by itself negate contravention when the exporter has not acted with reasonable diligence.

Conclusion: The charge was not established for the shipments where payment had in substance been realised or the delay was not proved to be blameworthy, but the charge was sustained for the shipments where reasonable steps and timely RBI approach were lacking.

Issue (ii): Whether the penalty required modification in view of the extent of contravention established.

Analysis: Since the totality of the case did not justify sustaining the entire penalty originally imposed, and part of the alleged contravention failed, the quantum of penalty was reappraised in light of the surviving violation alone.

Conclusion: The penalty was reduced to the extent warranted by the portion of the contravention that was upheld.

Final Conclusion: The appeal failed on the substantive finding of contravention in part, but the penalty was correspondingly scaled down to reflect the partial relief granted.

Ratio Decidendi: In cases of delayed or failed repatriation of export proceeds, contravention is not avoided by eventual payment alone; the exporter must show timely and bona fide reasonable steps, including prompt resort to the Reserve Bank for extension where required.

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