M/S. Bharat Carpets vs Director, Enforcement Directorate

2. Background facts in a nutshell are as follows:

4/340/D/94-SCN/DD/8097 to 8100 dated 30.9.1994 was issued to Appellant M/s Bharat Carpets (a Partnership Firm) and two of its partners, i.e., (1) Abdul Rasheed; and (2) Abdul Waheed asking them to show cause why adjudication proceedings under Section 51 of the Act should not be held against them for non-realisation of export proceeds under GR (1) PP No. AA-677411 dated 2.4.1992 of the value equivalent to Indian Rs.2,18,833/- and (2) GP-576895 dated 13.5.1991 of the value equivalent to Indian Rs.2,93,338/-, i.e. a sum total of Rs.5,12,171/-, within the stipulated period of six months or the extended period of RBI, if any, in contravention 2 of the provisions of Section 18(2) read with 18(3) of the Act and Notification No.F/67/EC/73-1 &3 both dated 1.1.1974.

The noticees gave written reply to the SCN stating that with regard to GP No. 576895 dated 13.5.1991 they have been continuously in correspondence with the authorized banker for the remittance of export proceeds from foreign buyer and final reply will be submitted after receipt of the same. With regard to other GR/PP No.AA-676411 dated 2.4.1992, it was replied that the shipment through Japanese Airlines was dispatched to the original consignee, i.e., M/s Rose Carpets. But within a short period but before delivery (either of goods or Bill of Lading); the appellants came to know the weak financial position of consignee; so they requested through their banker to intimate the foreign bank not to deliver documents of title of goods to M/s Rose carpets but to change such document delivery to new buyer M/s Roman -Inc., 100, Park Plaza Drives. The authorized dealer/banker instead of sending the requested communication dated 16/17th April, 3 1992, to the correct office of the foreign bank, sent it to a wrong place and that is why the title documents were wrongly handed over despite clear instructions to the contrary whereby the consignment was delivered to original consignee M/s Rose Carpets. In this way, the appellants cannot be held guilty of the non-realisation of the export proceeds of PP No. AA- 677411 dated 2.4.1992 inasmuch as that the wrong delivery, despite appellant's timely action, cannot only be attributed to the authorized dealer against whom the appellants are pursuing their remedies before the Civil Court and Consumer Disputes Redressal Forum. Because the financially weak original consignee did not pay, the appellants cannot be held guilty of the violations.

5. So far as the consignment dated 2.4.1992 is concerned, the Tribunal accepted the stand of the appellants before it and exonerated them. It was noted, however, by the Tribunal that the appellants did not place any material so far as the repatriation of Rs.2,93,338/- relating to goods exported by PP- 576895 dated 13.5.1991 and no arguments was advanced in the facts of the individual liability of the partners. In that view of the matter, the Tribunal held that the appellants have been rightly held as guilty for having committed violation of Section 18(2) of the Act. The penalty amount was, however, reduced to Rs.60,000/- so far as present appellant is concerned. Since deposit of Rs.80,000/-had been made by it, the remaining amount of Rs.20,000/- was directed to be refunded. 6

8. Above being the position, we find no merit in the appeal which is accordingly dismissed.

.................................J. (Dr. ARIJIT PASAYAT) .................................J. (G.S. SINGHVI) New Delhi, July 7, 2008 8