2016 (10) TMI 199 - AT - Customs

Absolute confiscation - discretion exercised by adjudicating authority in denying option for redemption of confiscated goods - concealment of Indian Currency in the hand baggage of departing passenger - confiscation of currency under section 113 of the Customs Act, 1962 - imposition of penalty under section 114(1) of the Customs Act, 1962 - is the adjudicating authority justified in denying option for redemption of confiscated goods and ordering absolute confiscation? - Held that - no legally acceptable proof has been produced which could indicate that the impugned currency was generated out of legal dealings and who actually is the owner or owners of this currency. The passenger initially co-operated with the investigation but later on took a reverse summersault. The real owner remained behind the scene and used the passenger as a stooge in the act of smuggling. The currency, thus, attempted to be sent out of India through a carrier in a clandestine manner. It is, therefore, obvious that the impugned currency was not free from taint and was generated and procured through illegal channels. The outflow of currencies in illegal and clandestine manner does give a telling blow to the economy of the country. Additionally, the currencies in cash form can be and is invariably used in several economically, politically, international crimes as it is very difficult to trace the source in cash transactions. Hence, it is necessary to deal sternly with such offences whenever come to notice. The decision in the case of SHEIKH MOHD. OMER Versus COLLECTOR OF CUSTOMS, CALCUTTA AND OTHERS 1970 (9) TMI 36 - SUPREME COURT OF INDIA relied upon. Absolute confiscation of the Indian currency justified - appeal dismissed - decided against appellant.

Summary

Issues Involved:
Exercise of discretion in denying option for redemption of confiscated goods under section 125 of the Customs Act, 1962.

Analysis:

Issue 1: Exercise of Discretion by Adjudicating Authority
The limited issue in this appeal was the exercise of discretion by the adjudicating authority in denying the option for redemption of confiscated goods, specifically Indian currency amounting to `34,50,000/- found concealed in the appellant's hand baggage. The appellant contended that the ownership or lack thereof should not be a sufficient ground to deny the option for redemption, citing relevant legal provisions and precedents. The original authority confiscated the currency without providing the option for redemption, citing concerns about the legality and origin of the currency.

Issue 2: Legal Provisions and Precedents
The appellant relied on section 125 of the Customs Act, 1962, which grants discretion to the adjudicating authority to allow redemption of prohibited goods upon payment of a fine. The appellant referenced decisions by the Government of India and the Tribunal to support the argument that lack of ownership should not be the sole ground for denying redemption. However, the authorized representative cited other decisions to support the original authority's decision for absolute confiscation of the currency.

Issue 3: Ambiguity of Ownership and Implications
The impugned order extensively discussed the ambiguity surrounding the ownership of the confiscated Indian currency and highlighted the implications of attempting to export such currency illegally. The original authority emphasized the necessity to deal sternly with such offenses to safeguard the economy and prevent illegal activities facilitated by cash transactions. The decision was also guided by Supreme Court and Tribunal decisions in similar cases.

Issue 4: Upholding of Absolute Confiscation
After careful consideration of the facts and circumstances, the Tribunal upheld the original authority's decision of absolute confiscation of the Indian currency. It was noted that lack of ownership was not the sole reason for denying redemption, as the export of Indian currency is prohibited, and carrying such currency out of the country has no legitimate purpose. The exercise of discretion by the original authority was deemed appropriate given the circumstances surrounding the attempted smuggling of the currency.

In conclusion, the Tribunal dismissed the appeal, affirming the decision of the adjudicating authority to uphold the absolute confiscation of the Indian currency based on the legal provisions, precedents, and the specific circumstances of the case.