APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, DELHI

Mohd. Saleem, Proprietor

v.

Enforcement Directorate

O.P. Nahar, Chairperson

Appeal No. 184 OF 2000

September 24, 2007

Section 18 of the Foreign Exchange Regulation Act, 1973 payment for exported goods – Whether once RBI allowed exporter to write off export proceeds, he could not be held guilty for contravention of section 18(2) – Held, yes

FACTS

The appellant was held guilty for contravention of section 18(2) on the ground that he failed to take reasonable steps for repatriation of export proceeds of goods sent to abroad.

On appeal, the appellant submitted that he had approached THE RBI for grant of write off and the RBI, by a letter had allowed write off in favour of the appellant.

HELD

When one go to section 18(2) the language in a clear manner states that ‘except with the permission of RBI’. From this plain language, it necessarily flows that where RBI permission is available, no restriction remains against the exporter under section 18(2). [Para 3]

It is crystal clear from the plain language of the of section 18(2) that RBI by a permission can absolve any exporter from the legal obligations of these provisions. Once this is on record, the exporter cannot be held guilty of any contravention under section 18(2). [Para 4]

As RBI had granted permission of write off by a letter, said letter was required to be considered by Adjudication Officer. As said letter of the RBI had not been considered by the Adjudication Officer, it appeared to be a fit case where impugned order was required to be quashed and set aside. The matter required fresh consideration at the hands of the Adjudication Officer. [Para 5]