Sarveshchandra, Chairman - The application for dispensing with the pre-deposit came up for disposal today. Shri Diwan, at the outset, filed three compilations of documents 'A', 'B' and 'C. He has also filed, to facilitate appreciation of his arguments, a statement showing realisable amounts of exports and their respective positions on date. The same position has been filed in a tabular form as Chart 'A' containing references of the relevant documents in respect of outstanding GRIs as also a Chart of export performance of the appellant for the years 1981—89. These documents are taken on record. Copies of these documents have been handed over to Shri Gadoo dasti

2. Shri Diwan for the appellants submitted that in support of the dispensation application he would not claim financial hardship. He submitted that it would cause undue hardship to the appellant if he is required to pre-deposit the amount of penalty as the impugned order is ex facie untenable in law. Elaborating his argument he submitted\that although the learned Adjudicating Officer might be justified in deciding the case ex parte due to non-appearance of the appellant's counsel, there was ho justification for not considering the evidence on record and to ignore the fact that the RBI had already granted write off in respect of the amount of Rs. 56,04,634.47 (incorrectly added up as Rs. 55,58,342.62 in the memorandum of show-cause) because in reply to the show-cause notice this position was clearly brought out giving the number and dates of the RBI's letters communicating writing off of the various amounts. He submitted that since the case was initiated on the information furnished by the RBI, it was the duty of the Adjudicating Officer, after he received the reply to the show-cause notice, to call for an up-to-date position from the RBI and the appellants' bankers.

3. In regard to the remaining two amounts of US $ 4,81,280 and US $ 287.10 also it was brought out that in respect of the latter amount the RBI had approved writing off vide their letter dated 4-9-1991 and in respect of US $ 481,280 the RBI had granted extension up to 31-12-1993 and the matter of further extension was pending with the RBI. These facts as brought out by the appellant, Shri Diwan submitted, pertained to the period much earlier to the issue of the memorandum of show-cause and had the case been properly investigated by the department, the investigation would not have resulted in issue of the show-cause notice. In any case, Shri Diwan submitted, even in respect of the amount of US $ 4,81,280 the RBI has since granted write off though even during adjudication proceedings the appellant had indicated the evidence of the efforts made by the appellant for realisation of the outstanding amount. In this connection Shri Diwan referred to Suit No. 703 of 1991 filed before the City Civil Court at Bangalore.

4. Shri Diwan further submitted that one of the essential components to be established by the department in order to bring home the charge of contravention of section 18(2) of the Foreign Exchange Regulation Act, 1973 ('the Act') is that the amount should remain outstanding after the expiry of the prescribed period or its extension thereof without the permission of the RBI. But once the RBI gives permission by way of writing off, there will be no contravention even if any export proceeds remained outstanding after prescribed period.

5. Shri Gadoo submitted that the appellant never submitted the various letters of the RBI granting him writing off or extension of time nor did he file a copy of the plaint of the suit filed in the Civil Court at Bangalore and the written statement thereto. Shri Gadoo, therefore, pleaded that let the appellant deposit the amount of penalty and he would give reply to the evidence now filed by the appellant after examining the same.

6. After hearing the parties we were satisfied that in view of the position brought out by Shri Diwan it would cause undue hardship to the appellan