UNION OF INDIA Vs. SRC EXPORTS PVT LTD

JUDGEMENT

(1.) THE respondents before the Foreign Exchange Regulation Appellate Board are the appellants herein.

(2.) THE Special Director, Enforcement Directorate (Foreign Exchange Regulation Act), New Delhi, by a common order dated 12.11.1992, imposed a total penalty of Rs. 3,14,40,000/- in pursuance to the 14 show cause notices issued on the partnership firms and the partners under Sections 9(1)(a), 9(1)(c) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as the Act) readwith Sections 18(2) and 18(3) of the Act. THE respondents herein preferred eight appeals before the Foreign Exchange Regulation Appellate Board (hereinafter referred to as the Board) against those orders. THE Board, by its common orders dated 17.9.1999, allowed the appeals and set aside the orders of the Special Director. THE present appeals are preferred before this Court under Section 54 of the Act.

(3.) THE main arguments advanced by the respondent concerns, hereinafter referred to as the "exporter", before the Special Director in reference to the exports made to Sierra Leone were: (a) Mr. Toufic Huballa was the importer. However, the goods landed were forcibly taken away by the mafia group and after the visit of the Managing Partner Ravi Prakash, they were retrieved. (b) Mr. Toufic Huballa had paid the pending bills in local currency and they are waiting in the pipeline for getting clearance. THE Special Director rejected both these submissions on the ground that though the exports were made on D.P. Terms, the tenors of the bills were changed to D.A. Terms which enabled the importer to clear the goods without making payments against the goods and without special permission from the Reserve Bank of India. THE exporter did not pursue the Central Bank all these five years to get the value released by making payment in the foreign exchange, stating that the amount was waiting in the pipeline and therefore, there is no truth of bonafide in such empty claims.