2016 (10) TMI 295 - HC - Customs

Confiscation of Foreign currency u/s 113 of the Customs Act, read with the provisions of Foreign Exchange Management Act, 1999 - imposition of redemption fine of ₹ 1,70,000/- and penalty of ₹ 1,20,000/- - US Dollars - Oman Riyals - whether the quantum of redemption fine and penalty imposed justified? - Held that - redemption fine of ₹ 1,70,000/- is imposed, as contained in Ext.P9 order, but the personal penalty imposed shall stand reduced to ₹ 50,000/-. The excess amount, if any paid by the petitioner pursuant to the orders impugned in the writ petition, shall be refunded to the petitioner within a period of two months - petition disposed off - decided partly in favor of petitioner.

Summary

Issues:
1. Declaration of foreign currency at customs entry
2. Confiscation of foreign currency under Customs Act and Foreign Exchange Management Act
3. Adjudication process and imposition of redemption fine and personal penalty
4. Appeal and revision process for challenging the adjudication orders

Issue 1: Declaration of foreign currency at customs entry
The petitioner, a Non Resident Indian doing business in Muscat, failed to declare the foreign currency he was carrying upon entry into the country due to unawareness of the monetary limit. Subsequently, when questioned during departure from the Cochin Airport, he declared carrying US $ 6500 and 2560 Oman Riyal, exceeding the permissible limit. The customs authority seized the excess foreign currency.

Issue 2: Confiscation of foreign currency under Customs Act and Foreign Exchange Management Act
The adjudicating authority, under Section 113 of the Customs Act and the Foreign Exchange Management Act, ordered the confiscation of the foreign currency. The petitioner was allowed to redeem the currency upon payment of a redemption fine and was also imposed a penalty. The first appellate authority upheld the confiscation but reduced the redemption fine. The revision authority further reduced the redemption fine and personal penalty.

Issue 3: Adjudication process and imposition of redemption fine and personal penalty
The High Court, upon review of the orders, found the revision authority's decision to reduce the redemption fine justified based on relevant factors. However, it noted an error in fixing the personal penalty amount higher than the initial penalty imposed. Considering the circumstances, the Court reduced the personal penalty from &8377; 1,20,000 to &8377; 50,000 while upholding the redemption fine of &8377; 1,70,000.

Issue 4: Appeal and revision process for challenging the adjudication orders
The petitioner challenged the orders imposing redemption fine and personal penalty through appeal and revision processes. The High Court, after careful consideration, dismissed the writ petition against the orders but directed the refund of any excess amount paid by the petitioner within two months from the date of the judgment.