2023 (6) TMI 546 - CALCUTTA HIGH COURT

Non-realization export proceedings of goods - convertible foreign exchange - Reasonable steps u/s 18(3) of FERA - Suit for recovery of the balance of the price of the goods sold and delivered in respect of an export in any court in India - All Reasonable steps to receive or recover the payment for the goods as envisaged u/s 18(3) of the Act of 1973 - whether, filing of the suit by the appellants before the Hon’ble High Court at Calcutta and obtaining a decree thereon for realisation of the balance of the price of goods sold and delivered to the importer would constitute “reasonable steps to receive or recover the payment for the goods” ?

HELD THAT:- In the facts of the present case, the exporter company exported goods of the invoice value of US$ 8,37,200 and received payment of a portion thereof leaving a sum of US$ 6,37,200 outstanding. The exports took place in 1996. Suit was filed for recovery and a decree with regard thereto was obtained. The decree could not be executed in India due to lack of assets of the importer in India. The appellants claimed that, execution of the decree in the foreign country where the importer was situated was not cost effective and feasible. In the facts of the present case, the explanation offered by the appellants with regard to inability to execute the decree obtained is plausible.

The appellants adequately explained the steps taken by them to receive or recover the payment of the goods exported. The steps taken by the appellants in filing a suit and obtaining a decree thereon within the extended period is a reasonable step taken to receive and recover the payment of the goods exported within the meaning of Section 18(3) of the Act of 1973. Such facts rebut the statutory presumptions of Section 18(3) of the Act of 1973.

The impugned show cause notice, the adjudication order passed thereon and the impugned order of the appellate authority are set aside.