1. All these appeals were preferred from an order dated 31-3-1998 of the Assistant Director of Enforcement Directorate, New Delhi in proceedings under section 51 of the Foreign Exchange Regulation Act, 1973, hereafter referred to as the Act for short, in respect of charges of contravention under section 18(2) and 18(3) read with section 68(1) of the Act; by virtue of the said order, all the notices the Firm by name M/s. Addi Fashions and its two partners, were found guilty of the charges and so the firm was imposed with penalty of Rs. 1,00,000 whereas the partners Rs. 1,25,000 each.
2. The Appeal No. 14 is by the Firm whereas the Appeal Nos. 15 and 16 are by its partners. The appellants were Noticee Nos. 1 to 3 in the adjudication proceedings. The charge against the firm was that M/s. Addi Fashions had failed to repatriate an export proceeds equal to Rs. 10,78,400 in respect of GR No. 676590 and GR No. 779280, dated 17-5-1990 without any general or special permission from the RBI and so had contravened the provisions of section 18(2) read with section 18(3) of the Act; the charge against the partners was for contravention of sections 18(2) and 18(3) read with section 68(1) of the Act. For the show-cause notice to the noticees, they had submitted reply to the effect that the remittance of export proceeds from erstwhile USSR buyer could not be realised since the foreign buyers did no longer exist and that still the firm and the partners, were continuing their efforts with the RBI for waiver of the said amounts. In the adjudication proceedings, the firm had represented that their prayer for waiver of the outstanding amounts was still pending consideration of the RBI. On the close of the enquiry, the Adjudicating Officer (in the caption of the impugned orders, it is recorded as Assistant Director though the signature is by A.K. Aggarwal, Deputy Director) found the noticee-firm guilty of the contravention and so were the firm and its partners found guilty of the charge and ordered to pay penalty; the total penalty so ordered against the 3 noticees was Rs. 3,50,000. Aggrieved with the said findings and orders, these appeals were preferred. Alongwith the appeals prayer for dispensation of pre-deposit of penalty amounts also were setforth.
3. The erstwhile Honble Chairperson Justice R.N. Sahay (Retd.) by virtue of order dated 6-6-2002 ordered interim stay of the impugned orders pending service of notice of hearing on the appellants; the cases so came up for hearing before me.
4. The pleadings common to all these appeals is that the impugned findings are bad in law and that the orders of penalty is thoroughly excessive and illegal.
5. The common point arises in all these appeals is whether any intervention is called for in the impugned orders by this Forum?
6. Since the counsel for the appellants submitted that interim stay was also granted by previous orders pending service of hearing notice to the appellants and on perusal of the records, I felt it fair to take up the appeals for disposal on merits; the Ld. ALA also prayed for an early disposal. Accordingly, the cases were taken up for hearing. Both sides were heard. The appeals are being so disposed of on merits.
7. The point : The counsel for the appellants submits that they had not received any adjudication order within the time prescribed for filing the appeal and it was only on their written request in August, 2001 copy of the impugned order was served on the appellant on 3rd October, 2001 and so there is no delay in filing of the appeal. The Ld. ALA submits that the copy of the impugned orders was already issued to the appellant firm, in the absence of any acknowledgement to substantiate the plea, the appellants plea that they had received a copy of the impugned orders only on 3rd October, 2001 is to be accepted; and accordingly construing the time in filing the appeal, there is no time-bar for the appeals. As such there is no delay in filing the appeals.
8. According to the appellants M/s. Addi Fashions had started their business in export of Readymade Garments in 1987 that they had effected export worth Rs. 13.61 crores mainly to the erstwhile USSR payments whereof was fully received and that the amounts left unrealised was only a negligible sum compared to the total export proceeds for the previous years; it was submitted on behalf of the appellants that it was on account of circumstances beyond the control of the appellants including certain political developments in the USSR whereby the Foreign buyer concern M/s. Razno Exports, which was a Government Entity had become defunct and ceased to exist thereafter and so the amounts could not be realised with the best of their efforts for realisation. It was also submitted on behalf of the appellants that the RBI had subsequently waived the condition of repatriation of the amounts covered by GR No. 779280, as they were informed by the Punjab National Bank their authorised dealer. In these lines of arguments, the counsel for the appellants submitted that the findings by the adjudicator that the appellants firm had failed to initiate reasonable efforts for realisation of the export proceeds, is bad in law. The ALA submits that the so-called disintegration of the State much long after the expiry of the time for realisation of the export proceeds and that it was only due to failure of the appellants for realisation of the export dues under GR Forms that the Adjudicating Officer had concluded the appellants guilty of the charges. I have closely examined the validity of the pleadings and submissions by either side. The impugned findings reveal that the Adjudicating Officer had already considered the submissions of the parties regarding their addressing the RBI for waiver; it is clear that the condition of reasonable time of the expiry of the term of 180 days after the shipment of the goods, the appellants had not taken steps for realisation of the export proceeds or for extension of time from the RBI. As rightly submitted by the ALA, it is only by way of idle formality that the appellants addressed the RBI long after the expiry of the time for realisation of the export proceeds, the so-called efforts by the appellants cannot be termed as reasonable efforts and so the statutory presumption under section 18(3) stands unrebutted; the impugned findings is therefore, sustained.
9. As on the question of orders of penalty, I have duly considered the mitigating circumstances and other relevant factors for fixing the penalty amounts; obviously, the appellants had no criminal intent in keeping the dues unrealised; though there was delay in taking steps addressing the RBI for waiver or write off, no elements of mens rea/guilty mind can be found with the appellants in committing the violation, the absence of mens rea no doubt calls for maximum leniency in respect of penalty and so I am inclined to modify the orders of penalty by reducing the same to Rs. 3,000 (three thousand) against the firm and Rs. 1,000 (one thousand) each against the two partners, the orders of penalty thus stands modified.
In the above premises, concurring with the impugned findings, the appeals are disposed of reducing the penalty to Rs. 3,000 (three thousand) as against the firm and Rs. 1,000 (one thousand) each against the partners and modifying the orders of penalty to this extent. The penalty amounts be realised by the Directorate.