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2015 (2) TMI 460 - AT - FEMAImposition of penalty jointly and severally - failure to take reasonable steps for repatriation of export proceeds of US $ 23580.02 in respect of goods exported under 3 GRIs - Held that:- While going through the order of penalty, I have noted that there is hardly any discussion on the role of the partners that led to non-realisation of the export proceeds of the 3 GRs and the ld. adjudicating officer has not arrived at any finding to show that the partners were responsible for non-realisation of the export proceeds. Section 68(1) of FERA, 1973 lays down the provision for monetary penalty on the partner only when it is found that he was in charge of, and was responsible to, the company for the conduct of business of the company. On this finding only, he shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. While sub-section (2) of Section 68 of FERA, 1973 lays down a provision that where it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. Provisions of Section 68 of FERA, 1973 are more explicit in this regard. I, therefore, find that the impugned order imposing joint penalty on the partners before proving that non-realisation of the three GRs was attributable to each of them, is liable to be quashed and set aside. It appears to me from the correspondence exchanged between the appellants and the authorized dealer Punjab National Bank that the appellants had been realizing full amounts of export proceeds against all other exports made under different GRs but payment against three GRs in question could not be realized due to taking delivery of the goods by the foreign buyer fraudulently. That there had been fraudulent delivery of the goods is proved by the certificate dated 20-1-2003 issued by the authorized dealer whereunder they have confirmed the same and also the fact of original complete set of documents in their possession. Therefore, I am led to believe that the appellants were making all reasonable efforts for realizing the export proceeds but realization in respect of three pending GRs could not be made due to circumstance beyond their control. On plain reading of the sub section (2) and sub section (3) of Section 18 of FERA, 1973, it is crystal clear that the Act does not render non-realisation of export proceeds per se punishable thereunder. The essential ingredients of the sub-section (2) of Section 18 is doing or refraining from doing anything or taking or refraining from doing anything or taking or refraining from taking any action which has the effect of securing the result which is envisaged either in clause (a) or (b) of the said sub-section. It would be sufficient for an exporter to discharge the adverse presumption under Section 18(3) of the Act when he shows that reasonable steps within his limitations have already been taken. In the instant case the learned adjudicating officer has failed to correctly appreciate the nature and extent of the presumption to be drawn in terms of Section 18(3) of the Act. In these circumstances, the ld. adjudicating officer appears to have erred while holding the appellant company guilty of the alleged contravention for not taking reasonable steps. - appellants have taken all reasonable steps to rebut the presumption under Section 18(2) of FERA, 1973 and therefore, the view taken by the ld. adjudicating officer in the impugned order is not tenable on the facts and circumstances of the case. - Decided in favour of appellants.
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