Export realisation contravention established, but disproportionate penalty was reduced because the appellant's role was limited.

Contravention of the export realisation requirements under the Foreign Exchange Regulation Act was established where the appellant admitted preparing export documents, was involved in at least one shipment, and the export proceeds for the consignments were not realised within the prescribed period. The appellant's role was found to be limited, however, and the penalty was tested on proportionality against the extent of his involvement. On that basis, the penalty was held excessive in the facts of the case and was reduced.

---

---

Issues: Whether contravention of sections 18(2) and 18(3) read with section 64(2) of the Foreign Exchange Regulation Act, 1973 was established and, if so, whether the penalty imposed on the appellant was excessive and liable to be reduced.

Analysis: The appellant admitted preparation of export documents and the record showed his involvement in at least one shipment, while the export proceeds in respect of the consignments were not realised within the prescribed period. On that basis, a contravention of the export realisation provisions was made out. At the same time, the appellant's role was limited and the amount attributed to him was substantially less than the penalty imposed. The penalty was therefore examined on the touchstone of proportionality and found to be excessive in the facts of the case.

Conclusion: Contravention was established, but the penalty of Rs. 50 lakhs was reduced to Rs. 14 lakhs.

---