ARCOT EXPORTS Vs. DIRECTOR OF ENFORCEMENT NEW DELHI

JUDGEMENT

(1.) THE appealpreferred by the appellant under Section52(2) oftheForeignExchange Regulation Act, 1973 (hereinafter referred to as'theAct') before theChairman, Foreign ExchangeRegulation Appellate Board.THE Boardhas dismissedthe appeal, against the order of the Additional Director ofEnforcement, but modified thepenaltyimposed, anddirected theappellant to pay a sum of Rs. 35, 000/- by way ofpenalty for contravention of Section 18(2) read with Section 18(3) ofthe Act.

(2.) THE brief facts areasfollows:-THE appellant hasadmittedly.exported readymade garments to M/s.Universal EnterprisesLtd., Male in Septemberto November, 1980 representing to the valueofRs.2, 63, 654.50. Since thesaid amount inForeign Exchangehasnot been repatriated, a showcause noticewasissued to theappellantby the SpecialDirector ofEnforcement and after considering the reply filedby the appellant dated6-4-1984 the Additional Director ofEnforcement passed an order dated 14-6-1985 imposing thepenalty ofRs. 50, 000/- on thefirm andadditional amount atRs. 15, 000/-ontheManaging Partner. An appealwas preferredbefore the ForeignExchange Regulation AppellateBoard. THE Appellate Board by the impugned order modified the penalty and confirmed thecontravention, theappeal is against this order.

(3.) SECTION 18(3) saysthatwhere in relation toany goods to which a notificationunder clause (a)ofsub-section(1)appliestheprescribedperiod has expiredandpaymenttherefor has not been made as aforesaid, it shall be presumed, unless the contrary isproved by the parson who hassold or is entitled to sellthe goods or to procure the sale thereof, that suchpersonhasnot taken all reasonablesteps to receive or recover thepayment for thegoodsas aforesaid and heshall accordinglybe presumed to have contravenedtheprovisions ofsub-section(2).The fact that theappellant had exported the goods some timein September, 1980 and that withinsix months he had not repatriated theamounttowardsthe valueofthegoods.Therewasnoextensionsought for andobtained by the appellant. Therefore, the payment has not beenmadethere is a legal presumptionunless contrary proofthat he had not takenreasonablesteps to receiveor recovertheamountandthathehas contravenedtheprovisions ofsub-section18(2)of the Act.Thestep that is saidto have been takenby way offilingthe suit forrecovery ofmoney after thenotice issued by theSpecial Director ofEnforcementwill notmitigate the contravention alleged againsttheappellant.