2010 (7) TMI 585 - AT - Central Excise

Confiscation and penalty - Smuggling of the Bangladeshi currencies - The Appellants had not claimed the currency in question before the lower Authorities - Therefore, find merit in the contention of the Revenue that the confiscation of the foreign currencies is not under challenge - The Appellants, from whose possession, the foreign currencies were seized, made a detailed statement regarding their role of taking the Indian currencies to a specified place and in exchange, they received the Bangladeshi currencies, and they did this illegal act on commission basis - The statements were retracted after 8 to 9 months of the seizure - the Appellants were arrested and produced before the Magistrate after the seizure, and no question is raised regarding statement - IF the foreign currency does not exceed US 10,000.00 or its equivalent, the declaration is not necessary - In the present case, there is no evidence that the currencies in question had been brought into India by the Appellants or any other person, through Customs barriers. Held that the Appellants, knew the smuggled nature of the Bangladeshi currencies - Therefore, find no merit in the Appeals. The Appeals are dismissed.

Summary

Issues:
Appeal against penalty imposed under Customs Act, 1962 for possession of Bangladeshi currencies, retracted statements as basis for penalties, challenge of confiscation of foreign currencies, applicability of Foreign Exchange (Regulations) Act, 1973, and reliance on legal precedents.

Analysis:
The Appellants filed appeals against a common impugned order upholding a penalty of Rs. 20,000 each under the Customs Act, 1962 for possessing Bangladeshi currencies. The Appellants, acting as carriers, admitted to exchanging Indian currencies for Bangladeshi currencies for a commission, leading to the confiscation of the foreign currencies and imposition of penalties. The Appellants contended that the currencies were not liable for confiscation and that their retracted statements should not be the basis for penalties, citing the Foreign Exchange (Regulations) Act, 1973 and legal precedents.

The Revenue argued that since no claim was made for the currencies before lower authorities, the Appellants could not challenge confiscation as they were not the owners but carriers. The Revenue maintained that the Appellants' role as carriers on a commission basis made them liable for penalties. The Tribunal found merit in the Revenue's contention due to the Appellants not claiming the currency before lower authorities and their admission of exchanging currencies illegally.

The Tribunal noted that the Appellants' retracted statements were made months after the seizure and that their arrest and production before the Magistrate did not question the statements made under the Customs Act. The Tribunal analyzed the Foreign Exchange (Regulations) Act provision regarding declaration of foreign exchange at Customs barriers and found no evidence that the currencies were brought into India through Customs barriers. The Tribunal distinguished legal precedents cited by the Appellants, as the facts of the present case differed, with the Appellants knowingly exchanging smuggled currencies.

Consequently, the Tribunal dismissed the appeals, finding no merit in the contentions raised by the Appellants. The judgment upheld the penalty imposed under the Customs Act, 1962 based on the Appellants' actions and the circumstances of the case.

Conclusion:
The judgment by the Appellate Tribunal CESTAT, Kolkata upheld the penalty imposed on the Appellants for possessing Bangladeshi currencies, rejecting their challenges based on retracted statements, confiscation of foreign currencies, provisions of the Foreign Exchange (Regulations) Act, 1973, and legal precedents. The Tribunal found the Appellants' role as carriers exchanging currencies illegally warranted the penalties, leading to the dismissal of the appeals.