Export proceeds repatriation duties and continuing officer liability were affirmed, with penalty reduced on mitigating steps.

Failure to realise and repatriate export proceeds was treated as contravention where the exporters did not show effective recovery action or timely write-off by the competent authority. The decision stressed that exporters must take serious and documented steps to recover unrealised foreign exchange. It also stated that a managing director who was responsible for the company's affairs during the default period is not absolved by a later resignation. At the same time, evidence of some remedial steps justified reduction of penalty, and the quantum was scaled down accordingly while the contravention finding and responsibility of the concerned officer were maintained.

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Issues: (i) Whether the appellants' failure to realise and repatriate export proceeds attracted contravention under FEMA and the Export Regulations. (ii) Whether the resignation of the managing director after the relevant period absolved him of liability, and whether the penalties deserved reduction in view of the steps taken.

Issue (i): Whether the appellants' failure to realise and repatriate export proceeds attracted contravention under FEMA and the Export Regulations.

Analysis: The export proceeds remained unrealised for a substantial period, and although some efforts were shown to have been made, the material did not establish effective recovery action or timely write-off by the competent authority. The decision emphasised that exporters are expected to take serious and effective steps to recover unrealised foreign exchange and to place material showing such efforts. On the facts, the proceedings under FEMA were therefore justified.

Conclusion: The failure to repatriate the export proceeds constituted contravention.

Issue (ii): Whether the resignation of the managing director after the relevant period absolved him of liability, and whether the penalties deserved reduction in view of the steps taken.

Analysis: The managing director had been responsible for the conduct of the company's affairs during the period of default, and a later resignation did not erase responsibility for past contraventions. At the same time, the record showed some steps taken by the company and its responsible persons, which justified leniency in quantum. The penalty was therefore scaled down to match the pre-deposit already made.

Conclusion: The resignation did not absolve liability, but the penalties were reduced.

Final Conclusion: The appeals were allowed only to the extent of reduction of penalty, while the finding of contravention and the responsibility of the concerned officer were maintained.

Ratio Decidendi: In cases of unrealised export proceeds, an exporter must take serious and effective steps to recover and repatriate the foreign exchange, and a subsequent resignation does not absolve a person who was responsible for the company's affairs during the period of contravention.

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