The main legal point established in the judgment is the requirement for the authority to consider the appellant's financial hardship and the material submitted, and to exercise discretion in accordance with the principles of natural justice.

ORDER :

1. With the request and consent of learned advocates appearing for the respective parties, these first appeals are taken up for final disposal. Since the issue involved in these appeals are identical and as such these appeals are taken up conjointly by treating the First Appeal No. 4907 of 2018 as a lead matter and the facts are taken from it for the sake of convenience.

2. Heard learned advocate Mr. Paritosh R. Gupta for the appellant and learned advocate Mr. Siddharth Dave appearing for Mr. Devang Vyas, learned Additional Solicitor General of India appearing for the respondent authorities.

3. By way of this First Appeal under Section 35 of Foreign Exchange Management Act, 1999, the appellant has prayed for setting aside the order dated 18.04.2018 passed by the Appellate Tribunal, Prevention of Money Laundering Act in Appeal No. FPA-FE- 24/AHD/2013.

4. The background of the present first appeal is that the appellant is a merchant exporter as well as an importer dealing in various products including agricultural commodities as well as other manufactures products.

4.1 The Government of India issued policy governing exports from India to Russia called “Repayment of State Rupee Credits” under which the goods were supposed to be exported to Russia. On an information that an abuse of policy was being made by various exporters, which was causing loos to the exchequer and that the goods exported never reached Russia, but were being off-loaded in third countries, which was contrary to the conditions stipulated governing such exports to Russia, inquiries were initiated. That in fact, the funds from “Repayment of State Rupee Credits” were to be utilized for export to Russian Federation only and that no third country exports were permitted against such funds.

4.2 That from the information, it transpired that Russian letters of credit/consignees found to be involved were reported to be non existent. During the course of investigation, according to the investing team, it was revealed that the company had effected shipment of 500 M.T. of wheat flour valued at Rs.70,00,000/- as declared in relevant documents under the scheme of “Repayment of State Rupee Credits” agreed to between the Government of India and Government of Russian Federation. That the final destination declared was Russia and port of discharge as Saint Peters Berg etc. in the relevant documents. That there was failure on the part of the company and its shipping agents to furnish any documentary evidence to show that the goods had actually reached Russia.

4.3 As far as the company is concerned, the company had exported 500 M.T. of wheat flour to Russian importers namely M/s. Termoekostroy/Arina under two bills of lading dated 20.02.1998 and 10.03.1998 from Kandla Port. Prior thereto, during the year 1977-1999, the company had submitted export documents to its bankers and received payment for effecting exports shipments to Russian consignee/ Letters of Credit opening firms/companies, but the goods were allegedly off-loaded in the third country, which never reached Russia. During the course of investigation, a letter dated 24.04.2002, was addressed by the Enforcement Directorate to the company inquiring on various issues, to which the company responded vide its letter dated 03.05.2002 giving requisite details.

4.4 In view of such investigation, which was initiated around month of June-2001, referred to earlier, a show cause memorandum dated 31.05.2002, was issued to appellant, wherein it was alleged that by way of making exports in the manner stated therein, the company and the appellant appeared to have contravened the provisions of Section 48 and Section 73(3) of Foreign Exchange Regulation Act, 1973 read with Reserve Bank Circulars referred to therein read with Section 68(2) of Foreign Exchange Regulation Act, 1973 read with Sections 49(3) and 49(4) of the Foreign Exchange Management Act, 1999. That in view thereof, appellant had rendered itself liable to be proceeded against