2008 (8) TMI 703 - AT - Customs

Summary

Issues: Smuggling of Indian currency abroad, absolute confiscation of currency, harsh penalties.

Smuggling of Indian Currency Abroad:
The case involved the interception of the first appellant by the DRI before boarding a flight to Saudi Arabia with Indian currency amounting to Rs. 51 lakh and assorted foreign currencies. The appellant's grievances included the absolute confiscation of the currencies without the option to redeem them on payment of a fine, as well as the perceived harshness of the penalties imposed.

Absolute Confiscation and Penalties:
The Commissioner, in the Order-in-Original, provided reasoning for not accepting the appellant's explanation regarding the possession of the currency. The impugned currency was deemed liable for confiscation under the Customs Act, specifically under Section 113(d) and (h). While the penalties imposed were considered harsh by the appellant, the Tribunal found the penalty of Rs. 5,00,000 to be less than 10% of the amount attempted to be smuggled out of the country, thus upholding the penalty under Section 114(i) of the Customs Act.

Release of Currency and Case Laws:
The advocate cited numerous case laws to support the release of currency on payment of a redemption fine, emphasizing that approximately 30-35% of the currency's value is typically imposed as a redemption fine in cases decided by the Tribunal. The Tribunal noted the absence of discussion on absolute confiscation in the Order-in-Original and remanded the matter to the Original Authority to consider redemption under Section 125 of the Customs Act within three months.

Involvement of Second Appellant:
Regarding the second appellant, evidence indicated his involvement in arranging currency for smuggling outside India, leading to the imposition of a penalty of Rs. 5,00,000 under Section 114 of the Customs Act. The Commissioner's decision to impose the penalty was upheld, and the matter was disposed of by way of remand for a de novo order to be issued within three months after providing the appellants with a personal hearing.