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2014 (9) TMI 1184 - HC - FEMAOffence u/s 18(2) and Section 18(3) of FERA - deliberate attempt to refrain from realising the export proceeds - imposing of penalty on the company, i.e., ('COPL') and on the individual Directors for contravention of Section 18(2) and Section 18(3) FERA - show cause why the proceedings u/s 51 FERA should not be initiated against them - HELD THAT:- The scheme of MMTC was to encourage the smaller exporters, who, on their own strength, would have normally been unable to procure orders from abroad for export of jewellery. It is difficult, therefore, to equate the exporters working as 100% EOU in the premises given on lease to the MMTC with other exporters who may be operating on a larger scale and who may have wherewithal to take more effective steps for realisation of export proceeds. The key issue here is about the sincerity of the efforts made by COPL to realise the proceeds. What Section 18(2) FERA expects is that there should be no deliberate attempt to refrain from realising the export proceeds. The AO of DD itself notices that the Appellants made sincere efforts to realise at least part of the outstanding amount. In the circumstances, it is not possible to concur with the conclusion reached by the DD in the AO that there has been a contravention by the Appellants of Section 18(2) and Section 18(3) FERA. The AT also does not appear to have examined the documents placed on record by the Appellants to show the efforts made by them to realise the export proceeds. Consequently, this Court sets aside the impugned order of the AT dated 13th March 2008 and the order of the DD, ED dated 25th February 2008 and allows these appeals. The amounts deposited by the Appellants pursuant to the AO and the impugned order of the AT shall be refunded to them within a period of four weeks in accordance with law.
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