2016 (12) TMI 896 - AT - Customs

Indian currency - smuggling - carrying of Indian currency within Indian Territory whether an offence or not - absolute confiscation of currency with imposition of penalty - Whether absolute confiscation of 59, 41, 550/- Indian currency has been correctly made by the Adjudicating authority under Sec 113 of the Customs Act 1962 by rejecting the claim of the appellant? - Held that - As Indian currency has not been notified as specified goods under Sec 11 H (e) or notified under Sec 123 of the Customs Act 1962 it cannot be said that bringing of goods into a specified area are liable to confiscation - There is no evidence on record at all in the show cause notice as well as in the Adjudicating order as to how seized currency is liable to confiscation under Sec 113 of the Customs Act 1962. No subsection of Sec 113 has been specified in the show cause notice under which Indian currency seized is charged to be liable to confiscation. Under the circumstances confiscation of seized India currency is not justified and order to that extent passed by the Adjudicating authority is liable to be set aside. Ownership claim of appellant - appellant has claimed the ownership of seized Indian currency though belatedly alongwith the source of licit acquisition of the same - Held that - In the light of legal proposition of law 59 41, 550/ is set aside and is ordered to be released to the appellant. Imposition of penalty u/s 114 AA of the Customs Act 1962 - Held that - there is no evidence of forged nature of documents produced by the appellant except the analysis made by the Adjudicating authority. Customs Act 1962 is not an enactment to penalise a person for forgery if any. Secondly it is already held above that claim of the appellant was not false in the absence of any other claimant - also found that allegation of forging of documents was not at all made in the show cause notice and Adjudicating authority has gone beyond the scope of show cause notice - penalty set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Absolute confiscation of Indian currency under Sec 113 of the Customs Act 1962.
2. Imposition of penalty under Sec 114 AA for submitting false claims and forged documents.

Analysis:
Issue 1:
The appellant challenged the absolute confiscation of Indian currency amounting to ?59,41,550 under Sec 113 of the Customs Act 1962. The appellant claimed ownership of the currency, explaining the delay in filing the claim and providing the source of acquisition. The Adjudicating authority alleged that the currency was intended for illegal exportation due to lack of claimants, although this allegation was not part of the show cause notice. The Tribunal found that the late filing of the ownership claim did not affect the appellant's right to claim ownership, especially in the absence of other claimants. The appellant's version was supported by statements and documents, and there was no evidence of attempted exportation. As a result, the Tribunal set aside the confiscation, ruling in favor of the appellant's ownership of the currency.

Issue 2:
Regarding the imposition of a penalty under Sec 114 AA for false claims and forged documents, the Tribunal noted that there was no evidence of document forgery by the appellant, except for the Adjudicating authority's analysis. The Tribunal emphasized that the Customs Act 1962 does not penalize forgery per se. Since the appellant's claim was not false, and forgery allegations were not included in the show cause notice, the Tribunal concluded that the penalty imposition was unjustified. Citing a case law precedent, the Tribunal held that the Adjudicating authority had exceeded the scope of the show cause notice. Consequently, the Tribunal allowed the appeal, setting aside the penalty along with the confiscation of the currency.

In summary, the Tribunal ruled in favor of the appellant, overturning both the absolute confiscation of the Indian currency and the imposition of the penalty under the Customs Act 1962. The decision was based on the lack of evidence supporting the allegations made by the Adjudicating authority and the failure to adhere to the legal requirements outlined in the show cause notice.