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| The Tax Publishers 2022 TaxPub(CL) 2811 (Del-HC) : (2022) 173 SCL 0618 FOREIGN EXCHANGE REGULATION ACT, 1973
Section 18
Proprietor failed to secure proceeds from export sales and she neither took reasonable steps for recovery of the proceeds nor took permission from RBI for delay beyond prescribed time of receiving export proceeds, so penalty was rightly imposed by Appellate Tribunal for contravention of sections 18(2) and 18(3).
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Payment for exported goods - Appeal against imposition of penalty - Non-taking of any reasonable steps to realize proceeds of export sales - Whether communication of intimations, demands and requests can be considered as reasonable steps
A proprietor exported goods to a foreign buyer but did not receive any payment as the buyer became bankrupt. ED imposed penalty on her for contravention of section 18 as she took or refrained from taking an action so as to affect security of export in respect of goods that were shipped by it under the cover of GR forms. The prescribed time for receiving export payment also expired and no permission of the RBI was taken for delayed period. The proprietor filed an appeal against the order that only some GR Forms were not realized and others were duly realized, wherein Appellate Tribunal reduced the penalty. The proprietor filed an appeal before High Court against the order on the ground that she took reasonable steps to realize the proceeds of export sales and the concerned bank had, with the due permission of the RBI, written off all the pending and outstanding GRs of the proprietor's firm and hence, there has been no contravention of the provisions of the FERA. Held: It was found that the proprietor made correspondence with the foreign buyer inquiring and intimating about the lapse in payment as well as with the RBI seeking its permission under section 18(2), by way of sending letters personally and internally. However, these steps and measures were not sufficient to meet the requirement of the provision necessitating 'reasonable steps' to be taken for securing the sale proceeds of exports. These communications, in the nature of mere intimations, demands and requests did not equate with effecting recovery by means of taking all reasonable steps as stipulated by section 18(3) for recovery of outstanding amount. Thus, the appeal was dismissed.
REFERRED :
FAVOUR : Against the appellant
A.Y. :
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