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P. Vidya Sagar Vs. Director, Enforcement Directorate - Court Judgment

LegalCrystal Citation
CourtAppellate Tribunal for foreign Exchange New Delhi
Decided On
Case NumberAPPEAL NO. 391 OF 2000
Judge
AppellantP. Vidya Sagar
RespondentDirector, Enforcement Directorate
Advocates:Dr. Shamsuddin for the Respondent.
Excerpt:
foreign exchange regulation act, 1973 - section 18 - comparative citation: 2006 (68) scl 248 (atffe - new delhi).....prescribed under clause (a) of sub-section (1), or (b) that the proceeds of the sale of the goods exported do not represent the full export value of the goods subject to such deductions if any, as may be allowed by the reserve bank; and (b) in a case falling under sub-clause (ii) of clause (a) of sub-section (1), also that the sale of the goods is delayed to an extent which is unreasonable having regard to the ordinary course of trade: provided that no proceedings in respect of any contravention of the provisions of this sub-section shall be instituted unless the prescribed period has expired and payment for the goods representing the full export value has not been made in the prescribed manner within the prescribed period.” 7. it is evident that contravention of section.....
Judgment:

1. This appeal is directed against the adjudication order No. AD(RN)/9/HYD./2000, dated 18-2-2000 Assistant Director, Enforcement Directorate imposed total penalty of Rs. 20,000 on the appellant being proprietor of M/s. Sagar Industries for failure to repatriate the export proceeds of US $ 4062 under GR No. 703670.

2. The matter was fixed for hearing on 28-6-2005 in Bangalore camp of this Tribunal when the appellant was neither present nor represented. Accordingly hearing of the matter was adjourned till 26-10-2005 and appellant was directed to be served with the notice by dak as well as by affixation under Rule 14(c) of Adjudication Proceeding and Appeal Rules, 2000. When the matter came up for hearing Dr. Shamsuddin, DLA representing the respondent submitted the service report showing that appellant was duly served on 4-10-2005 on his last known address by affixation. The service reports have been taken on record. As the appellant again failed to present or being represented in spite of service of notice the matter was taken up for consideration on merits. Heard Dr. Shamsuddin, DLA. Perused the records.

3. A SCN No. T-4-/1/HYD./2000 dated 20-1-2000 was issued to the proprietorship firm of the appellant namely M/s. Sagar Industries asking to show cause why the adjudication proceeding should not be held against it under section 18(2) read with section 18(3) of FERA, 1973 (hereinafter referred to as the Act) for not taking all reasonable steps in realising the said outstanding export proceeds to the extent of US $ 4062. No reply was received from the said firm or the appellant. However, during the adjudication proceedings held by the adjudicating authority the appellant appeared and submitted a letter dated 15-2-2000 stating that appellant firm is under the custody and control of the A.P. State Financial Corporation who have seized the said firm for failure to clear their dues. However, it has been admitted that neither the said firm nor the appellant realise the balance export proceeds to the extent of US $ 4062. At the close of adjudication proceedings the appellant was held guilty for not taking reasonable steps for realising the export proceeds and abovestated penalty was imposed.

4. In the present appeal the appellant contends inter alia that penalty imposed by the adjudicating authority is highly excessive exorbitant as the appellant has no means to maintain his livelihood. However, the appellant submitted that foreign buyer M/s. Shara Ali Nasar at Kuwait closed down the business and concerned persons are not traceable and as a result of which it is not possible to realise the outstanding export proceeds. It is submitted by the appellant that plight of the appellant has been further multiplied due to action of the appellants bank who filed a case against the appellants firm for recovery of finance advance to it and lastly it is submitted that since appellant has taken all possible steps to realise the dues, the adjudication proceedings be dropped.

5. Per contra Dr. Shamsuddin, DLA submitted that appellant has failed to take any reasonable steps. According to Dr. Shamsuddin no concrete action whatsoever have been initiated by the appellant and appellant has miserably failed to produce any evidence showing any steps taken by him for realising the export proceeds.

6. I have carefully examined the records and contention made by Dr. Shamsuddin, DLA on behalf of the respondent.

Section 18(2) of the Act reads as under :

“Where any export of goods, to which a notification under clause (a) of sub-section (1) applies, has been made, no person shall, except with the permission of the Reserve Bank, do or refrain from doing any thing, or take or refrain from taking any action, which has the effect of securing—

(A) in a case falling under sub-clause (i) or sub-clause (ii) of clause (a) of sub-section (1), -

(a) that payment for the goods -

(i) is made otherwise than in the prescribed manner, or

(ii) is delayed beyond the period prescribed under clause (a) of sub-section (1), or

(b) that the proceeds of the sale of the goods exported do not represent the full export value of the goods subject to such deductions if any, as may be allowed by the Reserve Bank; and

(B) in a case falling under sub-clause (ii) of clause (a) of sub-section (1), also that the sale of the goods is delayed to an extent which is unreasonable having regard to the ordinary course of trade:

Provided that no proceedings in respect of any contravention of the provisions of this sub-section shall be instituted unless the prescribed period has expired and payment for the goods representing the full export value has not been made in the prescribed manner within the prescribed period.”

7. It is evident that contravention of section 18(2) of the Act would have occurred only for some violation on the part of the exporter in either doing or refrain from doing an act or either taking or refraining from taking an action. Therefore, if events occur which are beyond the ordinary control of the exporter which despite diligence or bona fide the exporter not have been able to secure payment there would be no contravention of section 18(2) of the Act. The present circumstances shows that appellant has not produced any documentary evidence showing steps for realization of the outstanding export proceeds from the foreign buyer. It has been observed by the adjudicating authority that no attempt has been made on the part of the appellant to put pressure on the aforesaid buyer through the Indian High Commission or Indian Chamber of Commerce or by legal action. The appellant has also not approached the RBI for write off. In that view of the matter the findings arrived at by the adjudicating authority cannot be faulted with. The contention of the appellant, therefore, is liable to be rejected and accordingly the appeal is dismissed. Appellant is directed to deposit the penalty amount within 30 days from the date of receipt of this order failing which the respondent may recover the same in accordance with law.


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