2015 (1) TMI 1254 - AT - Customs

Confiscation of currency - attempt to smuggle the said currency out of India - Held that - The whole story of illicit procurement of the foreign currency is far from convincing and appears a concocted story to mislead the investigation. Be that as it may, even going by the versions of the appellants, the foreign currency was brought into India in violation of the provisions of FEMA, 1999 and without declaration to the Customs and was sought to be taken out of India illicitly. Thus the illicit nature. of the transactions is manifest and amounts to smuggling in and out foreign currency. Thus the tainted nature of the seized currency and the transaction is established beyond any doubt. Consequently, absolute confiscation of the seized foreign currency under Sections 113 (d) and (h) of the Customs Act is beyond any legal challenge and we hold accordingly. - Decided against the appellants.

Issues Involved:
1. Legality of the detention and validity of the statements recorded.
2. Reliability of the panchnama proceedings and language issues.
3. Retraction of statements and their evidentiary value.
4. Contradictions in statements and roles of individuals involved.
5. Denial of cross-examination of witnesses.
6. Legitimacy of the seized foreign currency and its ownership.
7. Justification for absolute confiscation of the seized currency.
8. Appropriateness of penalties imposed on the appellants.

Detailed Analysis:

1. Legality of the Detention and Validity of the Statements Recorded:
The appellant claimed illegal detention and invalidity of statements recorded during this period. The tribunal found this claim baseless, citing the Chief Metropolitan Magistrate's (CMM) observation that there was no complaint of ill-treatment, and a medical report confirming no signs of injury or assault. Thus, the statements were deemed valid.

2. Reliability of the Panchnama Proceedings and Language Issues:
The appellant argued that the panchnama proceedings were in English, a language he did not understand, and were prepared improperly. The tribunal did not find merit in this argument, as the main issue was the seizure of the foreign currency, which was undisputed.

3. Retraction of Statements and Their Evidentiary Value:
The appellant retracted his statements, claiming they were obtained under duress. The tribunal, however, upheld the validity of the initial statements, noting the detailed reasons provided by the adjudicating authority for considering them voluntary and incriminating.

4. Contradictions in Statements and Roles of Individuals Involved:
The appellant's various statements contained contradictions regarding his role and the source of the currency. The tribunal found that the initial statements, which were consistent about the appellant acting as a carrier for smuggling the currency, were more credible. The tribunal also noted the appellant's failure to provide convincing evidence of legitimate employment or the currency's intended use.

5. Denial of Cross-Examination of Witnesses:
The appellant's request for cross-examination of several witnesses was denied, which he claimed was a violation of natural justice. The tribunal supported the adjudicating authority's decision, noting that the denial did not result in any prejudice against the appellant, as the facts of the seizure were undisputed.

6. Legitimacy of the Seized Foreign Currency and Its Ownership:
The appellant claimed the currency was legally sourced from Dubai and belonged to a company there. The tribunal found this claim unconvincing, noting the lack of evidence supporting the currency's legitimate origin and the appellant's contradictory statements. The tribunal concluded that the currency was brought into India and attempted to be taken out illicitly.

7. Justification for Absolute Confiscation of the Seized Currency:
The tribunal upheld the absolute confiscation of the seized currency under Sections 113(d) and 113(h) of the Customs Act, 1962, citing the appellant's failure to declare the currency upon entry into India and the lack of RBI permission for its export. The tribunal referenced several legal precedents supporting the confiscation of undeclared and illicitly transported currency.

8. Appropriateness of Penalties Imposed on the Appellants:
The penalties imposed on the appellants were considered harsh. The tribunal reduced the penalties, taking into account the roles of the individuals involved. The penalty on Sri. Suresh Gangaram Hole was reduced from Rs. 50 lakhs to Rs. 5 lakhs, on Sri. Rajendra Butada from Rs. 1.25 crore to Rs. 25 lakhs, and on Smt. Bharati Butada from Rs. 25 lakhs to Rs. 1 lakh.

Conclusion:
The tribunal upheld the absolute confiscation of the seized foreign currency equivalent to Rs. 1,25,22,780/- under Sections 113(d) and (h) of the Customs Act, 1962, and reduced the penalties imposed on the appellants to Rs. 5 lakhs, Rs. 25 lakhs, and Rs. 1 lakh respectively.

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