THE HON’BLE SRI JUSTICE P.SAM KOSHY AND THE HON’BLE Dr. JUSTICE G.RADHA RANI CIVIL MISCELLANEOUS APPEAL Nos.663, 666 and 667 of 2008

COMMON JUDGMENT:

(per the Hon’ble Sri Justice P.SAM KOSHY Since the issue involved in these three appeals is one and some, they are taken up for analogous hearing and decided by this common judgment.

2. Heard Mr. V.V.S.N. Raju, learned counsel for the appellants and Mr. V.Ramakrishna Reddy, learned Standing Counsel for the Enforcement Directorate appearing on behalf of the respondents.

3. The instant appeals are filed by the appellants under Section 54 of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as the ‘Act of 1973’) challenging the common order passed in three appeals vide Appeal No.76 of 2007, Appeal No.77 of 2007 and Appeal No.78 of 2007 decided on 16.01.2008 by the Appellate Tribunal for Foreign Exchange, New Delhi.

4. Vide the common order dated 16.01.2008, the Appellate Tribunal had partly allowed the appeals filed by the appellants to the extent of firstly affirming the Order in original dated 30.03.2007 passed by the Special Director of Enforcement Directorate, Government of India, New Delhi, under the provisions of the Act of 1973 (The Repealed Act) read with Section 49(3) and (4) of the Foreign Exchange Management Act, 1999.

5. The Special Director of Enforcement Directorate vide the Order in original had imposed penalty of Rs.30,00,000/- on M/s. Siris Ltd., the appellant, in Civil Miscellaneous Appeal No.663 of 2008 under Section 50 of the Act of 1973. Likewise, the Special Director of Enforcement Directorate had also imposed penalty of Rs.10,00,000/- each upon the appellant in the other two Civil Miscellaneous Appeals i.e. Civil Miscellaneous Appeal No.666 of 2008 and Civil Miscellaneous Appeal No.667 of 2008 under the same provisions of law.

6. The aforesaid order of penalty was subjected to challenge in appeals before the Appellate Tribunal. The Appellate Tribunal vide its impugned judgment dated 01.01.2008 reduced the penalty to 1/3^rd of the amount already imposed, which means that each of the appellant was liable to pay the penalty at 30% of the aforementioned amount of penalty awarded by the Special Director of Enforcement Directorate.

7. It is these two orders i.e. the Order in original dated 30.03.2007 and the order dated 01.01.2008 passed by way of common order in three appeals preferred by the appellants are under challenge herein.

8. The facts of the case in nutshell are that the proceedings were drawn against the three appellants herein by respondent No.2 under the provisions of the Act of 1973 for having failed to take reasonable steps for repatriation of export proceeds of US$ 5,36,759.50 for the goods exported in the year 1997-98.

9. According to the learned counsel for the appellants, the exports were made for the year 1997-98 against eleven bills made to 5-6 parties of which the total proceeds comes to less than 5% of the total exports made by the appellants whose price is fully recovered. According to him, in terms of the policy framed by the Reserve Bank of India (for short ‘RBI’) if the unrecovered price is less than 10% of the total value of the exports, the party shall be entitled to write off. According to him this policy of write off is what has not been properly appreciated by the two authorities while imposing penalty.

10. It was also the contention of learned counsel for the appellants that even otherwise the order dated 30.03.2007 passed by the Special Director of Enforcement Directorate which has been upheld by the Appellate Tribunal is not sustainable for the reason that the two authorities have erred inasmuch as ignoring the fact that the entire proceedings drawn by respondent No.2 stand vitiated under the provisions of the Foreign Exchange Management Act, 1999 (hereinafter referred to as the ‘Act of 1999’). It was further contended that the two authorities have not appreciated the fact that RBI had permitted write off of all the export r