2014 (4) TMI 233 - AT - Customs

Export of Indian currency outside India More than ₹ 5000/- IC - Undeclared for export Seizure, confiscation and penalty Held That - On intelligence the appellant was intercepted at the Sahara Airport on 08.12.2004 and during the search, Indian currency of ₹ 24,17,500/- was found with the appellant which was not declared or not permitted by RBI for export - Thus, the proceedings were initiated against the appellant and the Indian currency was absolutely confiscated and penalty of ₹ 2 lakhs was imposed In presence of two contrary decisions the matter was referred to the Larger Bench to decide the issue.

Summary

Issues:
- Appeal against seizure and absolute confiscation of Indian currency
- Imposition of penalty on the appellant
- Interpretation of conflicting decisions regarding absolute confiscation

Analysis:
1. The appellant challenged the impugned order that seized and absolutely confiscated Indian currency smuggled outside India, with a penalty of Rs.2 lakhs imposed. The appellant was found with undeclared currency at the airport, leading to the initiation of proceedings resulting in the confiscation and penalty. The appellant contested the order seeking redemption of the currency based on a procedural lapse in a similar case.

2. The appellant's counsel cited a case where a significant amount of Indian currency was illegally exported, resulting in a reduction of redemption fine and penalty due to a procedural lapse. On the contrary, the respondent's representative referred to another case where absolute confiscation of Indian currency was upheld for illegal export, indicating a conflicting precedent on the matter.

3. Considering the contradictory decisions presented, the judge found it necessary in the interest of justice to refer the issue to a Larger Bench for clarification. The main question raised was whether absolute confiscation is appropriate when an individual attempts to export Indian currency without RBI permission exceeding Rs.5000, or if redemption through fines and penalties is a viable alternative.

4. The judge directed the registry to forward the case to the Hon'ble President for the formation of a Larger Bench to resolve the conflicting interpretations and provide clarity on the issue of absolute confiscation versus redemption of Indian currency in such cases. The decision to refer the matter aims to establish a consistent legal position for future cases involving similar circumstances.