2013 (12) TMI 1040 - AT - Customs

Confiscation of goods - Attempt to export Indian currency - Held that - As per the Reserve Bank of India Notification No. FEMA 6 RB-2000, dated 3-5-2000 cited supra any person resident in India cannot take outside India, Indian currency notes exceeding Rs. 5000/- and the said Notification has been issued under Sections 6 and 47 of the FEMA. In the instant case it is seen that the appellant has tried to illegally export Indian currency exceeding Rs. 5000/- through post. As per Section 2(22) read with 2(33) of the Customs Act, 1962, the goods under export in the instant case are prohibited goods and therefore, they have been rightly confiscated under provisions of 113(d) and 113(e) of the Customs Act. Further under Section 125(1) of the said Act, in respect of prohibited goods, the officer adjudicating the issue can absolutely confiscate the goods - Decided against assessee.

Summary

Issues:
1. Illegal export of Indian currency exceeding permissible limit.
2. Confiscation of currency under Customs Act.
3. Imposition of penalty on the appellant.

Analysis:

Issue 1: Illegal export of Indian currency exceeding permissible limit
The case involved the illegal export of Indian currency exceeding Rs. 5000, which is prohibited under the Reserve Bank of India Notification No. FEMA 6 RB-2000. The appellant attempted to export currency amounting to Rs. 24.8 lakhs without obtaining the necessary permission. The Customs Act, 1962 defines 'prohibited goods' to include currency, making the export of such goods subject to confiscation under Sections 113(d) and (e) of the Act. The Tribunal upheld the confiscation, citing relevant legal provisions and precedents such as the S. Faizal Khan case and the Salim M. Mamdani case.

Issue 2: Confiscation of currency under Customs Act
The Customs Act empowers the adjudicating officer to absolutely confiscate prohibited goods under Section 125(1) of the Act. In this case, the appellant's attempt to export Indian currency illegally led to the confiscation of the currency amounting to Rs. 24.8 lakhs under Sections 113(d) and (e) of the Customs Act. The Tribunal, relying on legal provisions and past judgments, affirmed the confiscation as valid and in accordance with the law.

Issue 3: Imposition of penalty on the appellant
While the currency was confiscated due to illegal export, the Tribunal considered the penalty imposed on the appellant, Shri Harish M. Gandhi. Given that the currency was already confiscated, the Tribunal deemed the original penalty of Rs. 10 lakhs to be excessive. Consequently, the penalty was reduced from Rs. 10 lakhs to Rs. 1 lakh, considering the circumstances of the case. The decision to reduce the penalty was based on the principle of proportionality and fairness in imposing penalties under the Customs Act.

In conclusion, the Tribunal upheld the confiscation of the illegally exported Indian currency under the Customs Act while reducing the penalty imposed on the appellant. The judgment serves as a reminder of the legal consequences of attempting to export prohibited goods without proper authorization, emphasizing the importance of compliance with relevant laws and regulations governing currency export.