TMI Blog1996 (9) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... undue hardship to the appellant if he is required to pre-deposit the amount of penalty as the impugned order is ex facie untenable in law. Elaborating his argument he submitted\that although the learned Adjudicating Officer might be justified in deciding the case ex parte due to non-appearance of the appellant's counsel, there was ho justification for not considering the evidence on record and to ignore the fact that the RBI had already granted write off in respect of the amount of ₹ 56,04,634.47 (incorrectly added up as ₹ 55,58,342.62 in the memorandum of show-cause) because in reply to the show-cause notice this position was clearly brought out giving the number and dates of the RBI's letters communicating writing off of the various amounts. He submitted that since the case was initiated on the information furnished by the RBI, it was the duty of the Adjudicating Officer, after he received the reply to the show-cause notice, to call for an up-to-date position from the RBI and the appellants' bankers. 3. In regard to the remaining two amounts of US $ 4,81,280 and US $ 287.10 also it was brought out that in respect of the latter amount the RBI had a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer did not consider the contention put forth by the appellant-company in its reply to the show-cause notice that the RBI had written off all outstanding amounts aggregating to ₹ 50,72,148.99 and US $ 287.10, on the ground that the company had not produced any documentary evidence in support of the contention. On the same ground he rejected the submission made by the company that they were awaiting extension of time from the RBI in respect of the other remaining outstandings. It appears to us from the perusal of the findings in the impugned order that the bank have furnished only selective information to the department whereas extensive correspondence made by the appellant through the bank to the RBI from time to time in regard to the extension of time, explanation and clarification regarding efforts made by the company and correspondence relating to write off, had either not been furnished by the bank or was not considered by the learned Adjudicating Officer. It is clear from the appellant's letter dated 26-10-1980 addressed to the Enforcement Officer that the appellant-company had furnished an account of some of these correspondence. 8. It appears to us to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondence to the Enforcement Directorate nor the investigating agency collected that correspondence and placed before the Adjudicating Officer. 9. The appellant has brought this material on record of this appeal. He has also filed copies of the write off permission granted by the RBI subsequent to the passing of the adjudication order though the matter was pending with the RBI when the oral hearings were held. 10. The position of the case where an application for extension of time for realisation of export proceeds or for writing off of the outstanding export proceeds is pending consideration of the RBI has already been stated by this Board in several cases. It is unfortunate that the authority below has not allowed himself to be guided by the legal position as stated by this Board. We must observe that it is not permissible for the authority below, while adjudicating upon the case before him and making adjudication order, to ignore the position of law as stated by the Board. If the legal position as stated by the Board has been corrected by the High Court or the Supreme Court or is found to be otherwise not tenable in view of the authoritative judicial pronounc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or writing off, as the case may be. If any adjudication proceedings are initiated during the pendency of such applications before the RBI, such proceedings would be pre-mature and without jurisdiction. 11. While on the question of contravention it is also to be noted that the burden is on the Department to substantiate, by proper evidence, the charge of contravention of the provisions of section 18(2). However, as stated earlier, this question will arise only in those cases where no application has been made to the RBI for the purpose stated above or where the RBI has refused the permission contemplated under section 18(2) for the extension of time contemplated under the second proviso to rule 8 of the Foreign Exchange Regulation Rules, 1974. Even where the RBI has refused the permission for the extension of realisation period and thereupon a contravention is presumed, in terms of section 18(3), merely on the fact of non-realisation of full amount of export proceeds, it is open to the exporter to rebut the presumption under section 18(3) by proving that he had taken all reasonable steps to realise the export proceeds and that the realisation remains outstanding in spite of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of Enforcement [Appeal No. 454 of 1990 dated 7-2-1994] and Cosmique Exports Ltd. v. Directorate of Enforcement [Appeal No. 440 of 1991 dated 17-2-1994]. The significance of an application pending consideration of the RBI is amply demonstrated in this case as the RBI has since granted the write off to the appellant by treating the non-realisation of outstanding export proceeds as legally in order. It would appear that the learned Additional Director has gone by the allegation made in the letter of Syndicate Bank of 8-12-1981 and the RBI's letter, a portion of which has been extracted in the impugned order. If an allegation is made and explanation sought, it will be a traversity of justice to rely on the allegation without considering the explanation given in reply to the allegation. In any case, these letters were not at all relevant as subsequent to these letters, the RBI itself had granted extension of time. 8. In view of the above and in view of the fact that the RBI has since decided to write off the outstandings and treat the non-realisation as legally in order vide their letter dated 26-6-1992 in the case of the first appellant and their letter dated 5-11-1992 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the RBI has allowed write off to the appellant subject to their surrendering proportionate cash incentives/assistance availed of by the exporters, if any, to appropriate authorities in due course . [Emphasis supplied] We also note that under each of their letter allowing write off the RBI asked the bank to realise the relative GR Forms duly certified on the strength of their letter. It would be clear therefrom that the requirement of surrendering proportionate cash incentives/assistance is not in the nature of precondition for write off. It only means that the grant of write off would not prejudice the right of the appropriate authority to recover cash incentives / assistance, if any, availed of by the exporter. Obviously, the RBI has no powers in respect of grant of cash incentives/assistance. The rider is intended to remove the doubt, if any, entertained that in view of the write off the liability to surrender the cash incentives/assistance is also written off. In view thereof it will not be necessary for the adjudicating authority to call for evidence as to whether cash incentive/assistance was availed of and if so, whether it has been surrendered. He would be concerned only wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xchange Regulation Act and the various rules, directions and orders issued from time to time have been fulfilled ... under the scheme of the Act, it is the Reserve Bank of India that is constituted and entrusted with the task of regulating and conserving foreign exchange. If one may use such an expression, it is the 'Custodian-General' of foreign exchange. The task of enforcement is left to the Directorate of Enforcement, but it is the Reserve Bank of India and the Reserve Bank of India alone that has to decide whether permission may or may not be granted under section 29(1) of the Act. The Act makes it its exclusive privilege and function. No other authority is vested with any power nor may it assume to itself the power to decide the question whether permission may or may not be granted or whether it ought or ought not to have been granted. The question may not be permitted to be raised either directly or collaterally ... (p. 1412) The above observations were made by the Supreme Court while dealing with the permission granted under section 29(1) of the Act but the observations would apply with equal force to the approval/permission given by the RBI under any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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