TMI Blog2008 (6) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... pany exported goods to the tune of ₹ 2,37,700/- and US$ 99,366.25 to M/s A.K. Diamonds Imports, Houston, USA. The admitted position is that the said importer did not pay the entire price for the goods and substantial amount remained outstanding to be recovered by the company. The respondent, Directorate of Enforcement, issued a show cause notice bearing No.T-4/93/DZ/2000/DD(VS) dated 28.09.2000 to the company and its Directors, including the appellant herein, for non-realisation of export proceeds of ₹ 2,37,700/- and US$ 99,366.25 alleging violation of Section 18(2) and 18(3) and 68 of the Act. It was alleged that the payment for the goods, as aforesaid, was not received within the prescribed period, as extended by the RBI and that the company and its Directors appeared to have contravened Section 18(2) of the Act read with Central Government Notification No.F-1/67/EC/73-1 3 dated 01.01.1974, and Section 18(3) of the Act, and thereby they have rendered themselves liable to be proceeded under Section 50 of the Act. The noticees filed their replies before the Enforcement Directorate. The stand taken by the appellant in response to the show cause notice was that he had c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Union Bank of India, Overseas Branch, requiring them to furnish certain documents. Reference is made to the Memorandum of Understanding dated 31.05.1995 entered between Mr. Kiran Chimalwar and Mr. Dinkar Dogra, the appellant herein on one hand, and Mr. L.R. Sridhar, on the other hand, under which the management of the company was taken over by Mr. Sridhar. It is argued that from 01.06.1995, inter alia, the appellant walked out of the management of the company. Reference is also made to the copy of Form 32, stated to have been filed before the Registrar of Companies, which shows that, inter alia, the appellant resigned from Directorship of the company on 05.10.1995. Submission of learned counsel for the appellant is that it is wellsettled, at least so far as Appellate Tribunal is concerned, that till so long as the application as aforesaid is pending before the RBI, it cannot be said that the exporter has contravened Section 18(2) of the Act, which reads as follows: 18(2). Where any export of goods, to which a notification under clause (a) of sub-section (1) applies, has been made, no person shall, except with the permission of the Reserve Bank, do or refrain from doing anyt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Principal laid down in the aforesaid decision of the two Member Bench of the Appellate Tribunal does not apply in the facts of the present case. 7. At first blush the submissions of the appellant appear to be forceful and attractive and undoubtedly give the impression that the Appellate Tribunal has taken a view contrary to its earlier decisions and that it is against a reasonable view, that till so long as the application for extension of time to receive the export proceeds or offset of exports proceeds against goods received is pending before the RBI, there possibly cannot be any violation of the Section 18(2) of the Act. However, when one looks at the glaring facts of this case, one realises that the aforesaid argument of the appellant has hardly any foundation to stand on. As pointed out by learned counsel for the respondent, the stand of the appellant initially was that he had resigned from the Directorship of the company on 01.06.1995. This is so recorded in paragraph 3 of the appellate order. However, the appellant's own document, namely, Form-32 shows that he resigned from the Directorship of the company on 05.10.1995. It is further pointed out by the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ephone No.001713 8236613 011 17137899946 at Houston wrote several letter to him. I also remember wrote a letter to Minister Commerce, Embassy of India in WASHINGTON DC dated 30/5/95 on behalf of the company stating the full facts with the request to intervene in the matter for realisation of export proceeds from M/s US Tools supplies M/s A.K. Diamond Exports. I also remember having sent several other letters to M/s A.K. Diamond Exports US Tool Supplies with the request to speed up the process of sending payments against the pending G.R.'s. As these documents in original are not available with me................. 8. From the aforesaid extracts of the statement made by the appellant, it is clear that there was close personal as well as business proximity between the appellant, the company and the importer. The transactions were not undertaken with any sense of formality. It is also evident that no meaningful or serious efforts were made by the appellant even at the time when he was a Director to realise the export proceeds in their entirety from the importer. My attention has also been drawn to the aforesaid MOU dated 31.05.1995. A reading of the said MOU is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covery of the export proceeds. Though it is argued by the appellant that the new management did not take any steps in this regard, the appellant is not in a position to show what steps he took either against the importer, or against the company to enforce the obligation of the company to take steps against the importer, as under taken by it under the MOU. 10. So far as the correspondence with the RBI is concerned, the two communications dated 01.07.1995 and 09.08.1995 merely show that the RBI repeatedly asked the company to furnish information and details. There is nothing on record to show that the matter was pursued by the company or by the appellant any further with the RBI or the importer, and it is not even claimed that the permission as sought from the RBI was, in fact, ever received by the company. 11. Section 18(3) of FERA, in such like cases raises a presumption that the person has not taken reasonable steps to receive or recover the payment for the goods and to have contravened the provisions of sub-Section (2) of Section 18 of the Act. Section 18(3) of the Act reads as follows: 18(3). Where in relation to any goods to which a notification under clause (a) of su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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