2004 (10) TMI 509 - AT - Customs

Summary

Issues:
Imposition of penalty under Section 114(i) of the Customs Act on the appellant based on alleged involvement in illicit export of foreign currencies and gold/silver.

Detailed Analysis:

Issue 1: Alleged Involvement in Illicit Export of Foreign Currencies and Gold/Silver
The case involved the imposition of a penalty of Rs. 2,00,000/- on the appellant by the Commissioner of Customs under Section 114(i) of the Customs Act. The appellant was accused of dealing in foreign currencies contrary to Reserve Bank of India restrictions, arranging the sale of imported gold and silver, and providing the sale proceeds in foreign currency for illicit export. The appellant was alleged to have abetted the offences committed by other individuals involved in the scheme. The Customs officers seized foreign currencies and silver granules from various individuals, including the appellant, and issued show-cause notices to them. The appellant contested the allegations, claiming no incrimination in the statements of co-accused individuals and arguing that there was no evidence of his complicity in the attempted export of foreign currency. The appellant also highlighted that no incriminating material was found in his premises.

Issue 2: Retraction of Statements and Legal Arguments
The appellant's counsel argued that the statement of one of the accused individuals, Arasu, should not be used against the appellant without allowing him to cross-examine Arasu. It was contended that the appellant's activities, as mentioned in Arasu's statement, were not illegal and did not warrant penalty under Section 114(i) of the Customs Act. The appellant's counsel referenced the Foreign Exchange Regulation Act, 1973 (FERA), stating that there was no evidence that the foreign currencies were not declared to the authorities, thus not warranting confiscation or penalties. The appellant's counsel emphasized that the appellant's actions were lawful and did not constitute an offence under the relevant regulations.

Issue 3: Examination of Submissions and Findings
The Tribunal examined the submissions made by both parties. It was noted that the appellant had been penalized based on the statement given by Arasu, which was claimed to have been retracted but the retraction was deemed invalid. The statement indicated the appellant's role in disposing of gold and silver and providing sale proceeds in foreign currencies. However, the Tribunal found no incriminating element against the appellant in Arasu's statement. The Commissioner's finding that the appellant was aware of the illicit export of foreign currencies was disputed, as there was no evidence to suggest the appellant's knowledge of such activities. The Tribunal concluded that the appellant could not be held liable for abetting the offences charged against others and, therefore, set aside the penalty imposed on the appellant.

In conclusion, the Tribunal allowed the appeal, setting aside the penalty imposed on the appellant under Section 114(i) of the Customs Act.