2011 (4) TMI 1285 - HC - Customs

Summary

Issues:
1. Non-compliance of Foreign Exchange Management Regulations
2. Enhancement of fine and penalty
3. Reduction of fine for serious offenses involving violation of FEMA Regulations and Customs Act

Analysis:

Issue 1: Non-compliance of Foreign Exchange Management Regulations
The case involved a Haj pilgrimage tour operator who attempted to take Indian currency outside India without a valid permit from the Reserve Bank of India. The Original Authority confiscated the currency under relevant provisions of the Customs Act, citing the violation of Foreign Exchange Management Regulations. The Tribunal found the lapse to be procedural in nature due to the failure to obtain the necessary permit. The Tribunal considered the operator's genuine status and reduced the fine and penalty, ultimately upholding the confiscation. The High Court, after reviewing the Tribunal's decision, found no grounds to interfere, emphasizing that the Tribunal's actions were in accordance with the Customs Act provisions.

Issue 2: Enhancement of fine and penalty
The Revenue appealed to the Tribunal seeking enhancement of the fine and penalty imposed on the tour operator. The Tribunal, however, rejected the Revenue's plea for enhancement, noting that the offense committed was procedural in nature and that the operator was a genuine Haj tour operator. The Tribunal reduced the fine and penalty considering the circumstances. The High Court observed that the Customs Act provides discretion in levying penalties, and the Tribunal's decision to reduce the penalty was justified based on the facts of the case. Consequently, the High Court upheld the Tribunal's decision.

Issue 3: Reduction of fine for serious offenses involving violation of FEMA Regulations and Customs Act
The Revenue contended that the offense committed by the tour operator, involving violations of FEMA Regulations and the Customs Act, warranted a higher fine and penalty. However, the Tribunal, considering the procedural nature of the offense and the operator's genuine status, reduced the fine and penalty. The High Court found no substantial questions of law to admit the Revenue's appeal, ultimately dismissing it at the admission stage. The Court highlighted that the Tribunal's decision was in line with the provisions of the Acts, indicating a fair consideration of the case's circumstances.

In conclusion, the High Court upheld the Tribunal's decision in the case, emphasizing the procedural nature of the offense, the genuine status of the tour operator, and the discretionary powers provided under the Customs Act for penalty imposition.