2014 (6) TMI 21 - AT - Customs

Smuggling of foreign currency - Redemption fine - Travelling for Private business or Official duty - Endorsement for travellers cheques Seizure of IC also Reduction of Penalty - Held that -Unless the person is travelling on official duty or to perform a duty during the course of his employment, other visits have to be considered as private visits - In the absence of any precedent judicial pronouncements to the contrary, this courts following own understanding of the private visit and other visits - Further it was also submitted that the appellants were arrested and underwent detention under COFEPOSA and suffered financially and further they have borrowed money for this purpose - Appellants wanted to purchase lathes for their own business and they were not acting as carriers and there is no indication to show that smuggling was their regular occupation, a sympathetic view as regards penalty is called for and further in view of the precedent decisions cited by the learned counsel, the absolute confiscation of foreign currency and Indian currency in this case is not warranted . Relying upon T. Soundrarajan Vs. CC, Chennai 2007 (4) TMI 167 - CESTAT, CHENNAI - A redemption fine of 15% in respect of S/Shri Anthony Domnick, Bheemappa Thyagarajan and Venkoba Rao would meet the ends of justice as far as foreign currency and Indian currency seized and confiscated from them is concerned - As far as Shri Raghu Gowda is concerned, since he was travelling for the second time and he had done the same earlier also and he was the one who has advised the other three to indulge in such activity and therefore he cannot be treated on par with the other three appellants for whom it was the first trip Therefore, in his case the redemption fine should be 30% - If the penalties imposed on the appellants is reduced to 1 Lakh each for Shri Venkoba Rao & Shri K.G. Venkatesh; 50, 000 for Shri Anthony Domnick and 3 Lakh for Shri Raghu Gowda it would meet the ends of justice - Decided partly in favour of accuseds.

Summary

Issues:
1. Smuggling of foreign currency by passengers at Bangalore International Airport.
2. Allegations of obtaining foreign currency from grey market.
3. Legitimacy of penalties imposed on the appellants.
4. Consideration of redemption fines for confiscated foreign and Indian currency.

Issue 1: The case involved the interception of four passengers suspected of smuggling foreign currency at Bangalore International Airport. The Directorate of Revenue Intelligence (DRI) received specific intelligence leading to the interception of the passengers, who were found with significant amounts of undeclared foreign currency. The passengers initially denied carrying foreign currency but later admitted to receiving it from a fifth appellant, Shri K.G. Venkatesh, who had obtained the currency from the grey market.

Issue 2: The appellants argued that they were misled by friends and obtained foreign currency from the grey market due to the unavailability of legitimate sources during holidays. They contended that they were first-time travelers and sought leniency in penalties. The defense also raised concerns about the circular requiring endorsements on passports for foreign exchange transactions, claiming it did not apply to their business trip. However, the tribunal found that the appellants were aware of the possibility of endorsements, indicating their knowledge of the requirement.

Issue 3: The tribunal considered the arguments from both sides regarding the penalties imposed on the appellants. The defense emphasized the appellants' lack of experience in foreign travel and their intention to purchase machinery for their businesses. The prosecution contended that the foreign currency was obtained to under-value imported goods. The tribunal acknowledged the circumstances of the case, including the appellants' genuine business purpose and lack of prior smuggling activities, leading to a reduction in penalties based on precedents and the ends of justice.

Issue 4: In determining the redemption fines for confiscated foreign and Indian currency, the tribunal differentiated the penalties based on individual appellants' roles and prior involvement in similar activities. Redemption fines ranging from 15% to 30% were imposed based on the specific circumstances of each appellant. The tribunal also reduced the original penalties imposed on the appellants to meet the ends of justice, considering the mitigating factors presented during the proceedings.

The judgment concluded with the disposal of the appeals based on the revised penalties and redemption fines determined by the tribunal, ensuring a balanced approach considering the unique circumstances of the case.