2004 (10) TMI 447 - AT - Customs

Summary

Issues: Confiscation of foreign currency, imposition of personal penalty, lack of permission from RBI for currency export, violation of FEMA regulations, option for redemption of currency, reduction of personal penalty.

In this case, the appellant was found in possession of foreign currency equivalent to Indian currency, which was confiscated by the Commissioner of Customs, Mumbai, along with the imposition of a personal penalty. The currency was discovered on the appellant during a routine check at the airport, hidden in the watch pocket of the trouser and inside the sole of the shoes. The appellant admitted to the intention of smuggling the currency out of India and not declaring it upon arrival. The appellant failed to provide any satisfactory explanation for lawful possession or export of the currency, leading to the initiation of proceedings for confiscation and penalty imposition.

During the proceedings, the appellant's advocate argued that the panch witnesses did not witness the currency, raising doubts about the accuracy of the panchnama. However, the appellant admitted to the recovery of the foreign currency but claimed the lapse was in not informing the authorities and lacking RBI permission for export. The appellant stated that the currency was withdrawn from an Iranian bank account before departure but was not declared upon entering India. The Revenue's representative countered these arguments, emphasizing the absence of RBI permission for exporting a large amount of currency, leading to a violation of FEMA regulations and justifying the confiscation.

The Tribunal found no merit in the appellant's arguments, as the recovery of the currency was not denied, and the lack of RBI permission for export was established. The appellant's claim of bringing the currency from Iran was dismissed since no declaration was made upon arrival in India. The withdrawal statement from the Iranian bank alone was not considered conclusive proof of importation. Consequently, the confiscation of the currency was upheld based on the violation of FEMA regulations.

Regarding the penalty, the appellant's advocate requested an option for redeeming the currency upon payment of a fine, citing precedents where absolute confiscation was converted to redemption. The Tribunal granted the appellant the option to redeem the foreign currency by paying a fine of Rs. 5 lakhs and reduced the personal penalty to Rs. 75,000 based on the circumstances. Despite these modifications, the appeal was rejected, affirming the confiscation and penalty imposition but allowing for redemption of the currency with a fine.