Export proceeds repatriation under foreign exchange law upheld where only part of the full sale value was brought back.

Section 12(2) of the Foreign Exchange Regulation Act, 1947 required an exporter of notified goods to ensure that export proceeds were received in the prescribed manner and represented the full amount payable, subject only to permitted deductions. On the facts noted, the exporter made a private sale, did not comply with Reserve Bank directions, and repatriated only part of the export value without proving the amount actually realised. The authorities disbelieved the claim that only half the value had been paid, and the record showed that the full transaction value was US $ 5976 while only US $ 2931.42 was repatriated. The violation was upheld and the penalty order sustained.

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Issues: Whether the exporter contravened section 12(2) of the Foreign Exchange Regulation Act, 1947 by failing to repatriate the full amount payable for the exported goods and, if so, whether the penalty imposed was liable to be interfered with.

Analysis: Section 12(2) required an exporter of notified goods to ensure that payment for the goods was received in the prescribed manner and represented the full amount payable by the foreign buyer, subject only to permitted deductions. On the facts found by the authorities, the exporter had effected a private sale of the goods, had not acted in accordance with the directions of the Reserve Bank of India, and had repatriated only part of the export value without establishing what amount was actually realised. The finding that the foreign buyer had paid only 50% of the value was disbelieved, and the record showed that the full transaction value was US $ 5976 while only US $ 2931.42 was repatriated.

Conclusion: The exporter was held to have violated section 12(2) of the Foreign Exchange Regulation Act, 1947, and the penalty order was upheld.

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