TMI Blog2023 (10) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... ession goods as contained in Section 2(22) of the Act, includes baggage as well as currency, the exclusion contemplated under Section 129A clearly appears to be restricted to a seizure of goods which are sought to be imported as baggage. The expression baggage as appearing in that provision would necessarily have to draw color from the provisions contained in Chapter XI of the Act. In any case and once the respondent themselves had asserted that the goods in question were liable to be confiscated in terms of Section 113(d), the objection taken to the maintainability of the appeal would not sustain. Beneficial owner of the currency - HELD THAT:- Undisputedly, the journey in the course of which the seizure was affected was not a personal visit of the respondent but was to attend to various business meetings and events for and on behalf of HMC and which meetings and events were being managed by SEMPL. It is in the aforesaid background that the Tribunal has come to the conclusion that the respondent could not be held to be the beneficial owner of the seized currency. It is noted from the various statements made in the course of investigation and the facts that stood rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstance of the transaction? 4. Whether in light of the facts and circumstances, the impugned order dated 28.03.2022 passed Learned CESTAT is unsustainable in law? 3. The dispute itself emanates from a Show Cause Notice [SCN] dated 17 July 2019, which had been issued to M/s Salt Experience and Management Pvt. [SEMPL] Limited and various other individuals, including the respondent herein. The SCN related to the seizure of foreign currency amounting to approximately Rs. 81 lakhs which was seized from the hand baggage of one Mr. Amit Bali, an employee of SEMPL. 4. The aforesaid individual, while tendering his statement under Section 108 of the Customs Act, 1962 [the Act], disclosed that the said recovered currency belonged to the respondent and was handed over to him by Mr. Hemant Dahiya, a Director in SEMPL, to take care of the expenses of the respondent whose business engagements were being managed by the said agency. 5. The Order-in-Original, has, while noticing the statement made by Mr. Amit Bali, captured the essence thereof in the following terms:- (iii) he received the said foreign currencies at his office i.e. M/s. Salt Experience 86 Management Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gn visits. 7. On due consideration of the statements and other material that was gathered in the course of investigation, the Order-in-Original came to record the following conclusions: - 58.14 Mr. Amit Bali; from whose possession forex was recovered, is, by all accounts, the person from whose possession foreign exchange was seized, and who is thus primarily culpable, as discussed above. In view of the various statements recorded under S.108 of the Customs Act, 1962 of Mr. Amit Bali, Mr. Hemant Dahiya and Mr. K.R. Raman and the reply filed by them to the show cause notice no. 26/2019 dated 17.07.2019, the following facts emerge: (i) In reply filed by the Noticee No. 1, 3 4 it has been admitted that Mr. Amit Bali was entrusted the foreign exchange with the direction that before undertaking the tentative journey the foreign exchange be converted into the permissible / legalised mode. There is no evidence on record to show that any such directions were given to Mr. Bali. In fact, these averments smack of afterthought, especially since evidence produced by the department brings out a well-organized attempt by M/s SEMPL to purchase forex within individual ceilings and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the last five years. (iv) In reply to the show cause notice filed by the Noticee No. 5, it has been submitted that M/s SEMPL is an independent third party service provider and neither Noticee No. 5 nor HMC has any direct or indirect financial control / shareholding interest in M/s SEMPL. In fact, in paragraph no. 15 of the reply to the show cause notice filed by the Noticee No. 5 it has been stated as under: ...M/s SEMPL has been used by HMC as one of the specialist Indian third party service providers for the purpose of arranging travel, event management and logistics arrangements, and that SEMPL, is an independent third party service provider and neither HMC nor Noticee No. 5 have any shareholding / financial interest in the SEMPL either directly or indirectly. That all transactions between SEMPL and HMC are on arms-length basis, and have been audited by the statutory auditors of HMC as per Indian law. (v) That Noticee No. 5 / HMC is a client of M/s SEMPL i.e. mere a recipient of services provided by M/s SEMPL (which, at the cost of repetition, is an independent third party service provider) and against the provisions of such services provided by M/s SEMPL to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of this case and statement of various persons it is clear that the Mr. Amit Bali and/or other employees of SEMPL did not carry the subject foreign currencies for their own benefit or to further the business of SEMPL but the same were exported from India for use and on behalf of the Respondent. The Respondent has cited the judgment of Sunil B. Naik vs. Geowave Commander 2018 (5) SCC 505 to distinguish the requirements for being a beneficial owner. However, the facts of the case cited by the Respondent are different from the present case. Infact provisions of Section 2(3A) of the Customs Act, 1962 were not relevant in the said cited case. Therefore, ratio of the said judgment cited by the Respondent is not applicable in this case. It is also observed that the Adjudicating Authority in Order-in-Original dated 29.11.2019 has upheld the charge of illegal export of foreign currencies and had ordered for confiscation of foreign currencies and imposition of penalty on employees of SEPML. However, it is clear that the Adjudicating Authority failed to consider the legal position in proper perspective and vital facts of this case relating to the role of the Respondent despite repea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts made by the appellant regarding the contractual arrangement between HMC and SEMPL and the fact that the foreign currency did not belong to the appellant and in fact belonged to SEMPL, which currency was in the possession of Amit Bali for meeting the expenses to be undertaken. It also transpires that SEMPL would raise invoices for such expenses together with its service charge and thereafter payments were made by HMC. The actual owner of the foreign currency having been identified, the concept of beneficial owner does not arise. The Commissioner (Appeals), therefore, was not justified in reversing the finding recorded by the Additional Commissioner that the concept of beneficial owner would not arise in the facts and circumstances of the case. 28. It further transpires that HMC had arranged SEMPL as the service provider for the event management outside India and it was the responsibility of SEMPL to acquire foreign exchange which was acquired by SEMPL and handed over to Amit Bali for discharge of the contractual obligation of organising and arranging meetings. The Commissioner (Appeals) has merely on conjectures and surmises assumed the liability of the appellant in rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be unloaded at that destination; (c) payment of drawback as provided in Chapter X, and the rules made thereunder: PROVIDED FURTHER that the Appellate Tribunal may, in its discretion, refuse to admit an appeal in respect of an order referred to in clause (b) or clause (c) or clause (a) where (i) the value of the goods confiscated without option having been given to the owner of the goods to pay a fine in lieu of confiscation under section 125; or (ii) in any disputed case, other than a case where the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment is in issue or is one of the points in issue, the difference in duty involved or the duty involved; or (iii) the amount of fine or penalty determined by such order, does not exceed [two lakh rupees]. 15. We find ourselves unable to sustain the aforesaid submission bearing in mind the clear import and tenor of the SCN. The SCN did not affect the seizure of the foreign currency on the ground of a violation of the Baggage Rules or the declarations that are liable to be made by a traveler. The SCN itself invoked Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of HMC and which meetings and events were being managed by SEMPL. It is in the aforesaid background that the Tribunal has come to the conclusion that the respondent could not be held to be the beneficial owner of the seized currency. 20. We further note from the various statements made in the course of investigation and the facts that stood recorded in the Order-in-Original that it was not the case of the appellant that the currency had been provided by the respondent. In fact, and to the contrary, the Order-in-Original refers to the currency being obtained from the stock as maintained by SEMPL and having been duly handed over by an employee of that entity to Mr. Amit Bali. While Mr. Ojha had sought to contend that in the past SEMPL employees are allegedly stated to have admitted to carrying currency which was utilized to meet the personal expenses of the respondent, the same is clearly immaterial since the proceedings emanating from the SCN in question stood restricted to the business travel of the respondent while acting as a Managing Director of HMC. 21. We find that the issues which were canvassed for our consideration by the appellant essentially require us to re- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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