2017 (3) TMI 588 - AT - Customs

Absolute confiscation - foreign currency - appellant had not declared that he was carrying foreign exchange - Held that - No evidence has been placed on record to show that declaration was necessary for carrying of foreign currency by a departing passenger or that his inability to explain the source of foreign currency would render it liable to confiscation under CA, 1962 - Customs Act, 1962 is concerned with the illegal importation into India and exportation out of the country. In the absence of any prescription requiring declaration of foreign currency taken out of the country, no justification found to sustain the impugned order - appeal allowed - decided in favor of appellant.

Summary

Issues:
Confiscation of foreign currency for attempted illegal export, imposition of personal penalty, appellant's claim of accumulation of foreign currency, lack of declaration by departing passenger, justification of confiscation under Customs Act, 1962.

Confiscation of Foreign Currency and Imposition of Penalty:
The impugned order-in-original dated 31st August, 2006, by the Commissioner of Customs, Airport, Mumbai, ordered the absolute confiscation of foreign currency amounting to US $ and UAE Dirham equivalent to ?11,11,775 and imposed a personal penalty of ?1 lakh on the appellant for attempting to illegally export the currency. The appellant, scheduled to depart to Bahrain, had travellers' cheques released to him, with the penalty to be recovered through their encashment. The appellant contested the confiscation and penalty, claiming the accumulated foreign currency was for travel and business purposes, acquired during trips to Dubai, Syria, and Saudi Arabia.

Lack of Declaration and Justification for Confiscation:
The appellant argued for the release of the seized foreign currency and the setting aside of the penalty, citing no admitted concealment and lack of awareness regarding the requirement to surrender unutilized foreign exchange. The original authority found the appellant had not declared the foreign exchange, rejected the claim of accumulation without evidence, and deemed the purpose of carrying the currency as not lawful. However, the Tribunal noted the absence of evidence mandating a declaration for carrying foreign currency by a departing passenger under the Customs Act, 1962. The Tribunal found no basis to uphold the impugned order, as the Act focuses on illegal importation and exportation, not declaration of foreign currency taken out of the country.

Legal Interpretation and Decision:
The Tribunal, in its analysis, highlighted that the Customs Act, 1962 pertains to illegal importation and exportation, and in the absence of a requirement for declaring foreign currency leaving the country, the confiscation order lacked justification. The Tribunal set aside the impugned order, allowing the appeal and ruling in favor of the appellant. The decision, pronounced on 14th February 2017, emphasized the lack of legal basis for the confiscation and penalty imposed, ultimately leading to the appeal's success.