Upgrad LLM

export transaction query

We have a proprietor company in surat
We executed a export order in February 2020.
The foreign buyer had commitment that he would take care of logistics and transportation as we did not have IEC certificate at that time

He gave us documents of a company in Ahmedabad and said that he has permission to use IEC certificate of that company.

We did not verify this information.

Now the ahmd company has approached us claiming they I have fraudulently used their IEC certificate
And that they would file a case against us. They have not generate the invoice and shipping bill is filled in their company name and they have not received any foreign remittance against the shipping bill

How do we close this query.
what is worst case scenario ?
maximum fine or settlement ?

How do we close this query The foreign remittance in question is us dollar 2184

Commercial query.

Consult your chartered accountant or some other local CA


We are trying for out of court settlement but I want to know if they do file a what is fine and punishment as last case scenario or if we pleed guilty then what is fine we can close this matter ?

Retired Manager

What you have done is wrong and highly objectionable. You have to face the consequences.


It is misutilization of the IE Code which does not relate to you. You have caused the Company whose IE Code you used to drag their name into disrepute before RBI. In view of the fact that no payment is received against the Shipping Bill, their Company is likely to be caution listed by RBI.which will take away many privileges the Ahmedabad Company is enjoying, besides tarnishing their name before government agencies. They can file case against you for damages besides reporting your act of misrepresentation/misutilization to the Customs Department. When a company files a case against you for damages, it is difficult to guess for the amount they may file the suit.


Thanks for your reply. 

We were ourself being framed wrongly as our Malaysia trader had sent those documents to us which we forwarded to transportor. We had already made clear that we do not have iec but we were assured that due permission have been taken. What would be way to close this matter in out of court settlement ?

Retired Manager

 I do not understand how you did this. You have to declare the goods for export with your IE Code before the Customs. Then Shipping Bill is obtained details of which flow to your bank through RBI via EDPMS mechanism. Then you can give all relevant documents including Invoice, Shipping Bill, Transport document etc to your bank for collection who will forward documents to the banker of overseas importer.

It's likely that Customs and RBI also may initiate action in the matter as you have violated the basic rules governing export trade.


Better you contact a CA who is handling the export related issues to represent you and to guide you. Posting queries in this forum will not help you as the matter is not for a mere clarification.




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