2005 (12) TMI 612 - AT - FEMA

Summary

Issues:
- Appeal against penalty imposed for contravention of Foreign Exchange Regulation Act
- Failure to repatriate export proceeds
- Arguments regarding realization of export proceeds and sale of goods
- Legal presumption against appellant for not taking reasonable steps for repatriation
- Dismissal of the appeal and order for penalty payment

Analysis:

The judgment involves an appeal against a penalty imposed for contravention of the Foreign Exchange Regulation Act due to the failure to repatriate export proceeds. The appellant argued that part of the export proceeds was realized, while the remaining amount was not repatriated as the goods were not sold due to the foreign buyer not taking delivery. However, the respondent contended that despite repatriating a portion of the amount, a significant sum remained outstanding, justifying the penalty. The Tribunal noted that the language of the Act referred to the "export of goods" rather than the "sale of goods," emphasizing the responsibility to repatriate the price of goods sent abroad.

Regarding goods sold by Singapore Customs during the export process, the Tribunal highlighted the need to prove the consumption and price of goods sold. The appellant failed to provide evidence on this matter, leading to the rejection of the argument that the sale by Singapore Customs absolved them of responsibility. The legal presumption under section 18(3) against the appellant for not taking reasonable steps for repatriation was discussed. While this presumption could be rebutted with sufficient evidence, the appellant failed to do so, leading to the application of the presumption and upholding the contravention under section 18(2).

The Tribunal upheld the penalty of Rs. 2 lakhs against the appellant-company, considering it reasonable compared to the repatriated amount. With no compelling arguments presented, the appeal was dismissed, and the appellant was directed to deposit the remaining penalty within 15 days. Failure to comply would result in the respondent recovering the outstanding amount in accordance with the law. The judgment concluded by dismissing the appeal and instructing the appellant to fulfill the penalty payment obligation within the specified timeframe.