2009 (4) TMI 158 - AT - Customs

Smuggling of foreing currency non declaration confiscation, redemption fine and penalty held that - Section 77 mandates that the owner of any baggage shall, for the purpose of clearing it, make a declaration of its contents to the proper officer. Obviously, such declaration has to be filed, in respect of accompanied baggage, by the passenger immediately upon his arrival in India. In the instant case, noticeably, though the appellant declared his personal effects, he chose not to declare the foreign currency which was brought in such a large measure. The belated declaration made by him is no declaration for purposes of Section 77 and, therefore, the breach of Section 77 by the appellant has continued ever since the date of his arrival in India. the mandatory condition attached to import of foreign currency was not complied with by the appellant and, therefore, the currency became liable for confiscation under Section 111(o) of the Act. The confiscation of the currency can only be sustained and it is ordered accordingly. - liable to confiscation and penalty.

Summary

Issues:
1. Confiscation of foreign currency under Section 111 of the Customs Act.
2. Imposition of penalty under Section 112(a) of the Customs Act.

Analysis:
1. Confiscation of Foreign Currency:
The appellant, a British National, arrived in India with lb 68,000/- in foreign currency, which was seized by customs officers under a panchnama. The appellant claimed innocence, stating he was unaware of the regulations and had brought the currency for property investment and business purposes. The appellant later filed a Currency Declaration Form (CDF) as per Regulation 6 under the Foreign Exchange Management Act. The adjudicating authority ordered confiscation of the currency under Section 111(d), (m), and (o) of the Customs Act, offering redemption against a fine of Rs. 10,00,000/-. The appellant argued that there was no intention to smuggle the currency and requested leniency in penalty. The appellate tribunal upheld the confiscation under Section 111(d) and (o) due to the breach of Section 77 of the Customs Act and Regulation 6, reducing the fine to Rs. 5,00,000/- and penalty to Rs. 2,00,000/-, deeming the Commissioner's order sustained.

2. Imposition of Penalty:
The appellant contended that since there was no prohibition on importing foreign currency into India, Section 111(d) was inapplicable. The appellant's counsel argued that the subsequent filing of the CDF nullified any breach of Section 77. However, the tribunal found that the appellant's failure to declare the currency upon arrival constituted a breach of Section 77, attracting Section 111(d) and (o) due to non-compliance with Regulation 6. The tribunal reduced the fine and penalty imposed by the Commissioner, deeming them excessive given the circumstances of the case. The tribunal upheld the penalty under Section 112(a) but reduced the amounts to Rs. 5,00,000/- and Rs. 2,00,000/- respectively. The appeal was disposed of with the modified penalties in place, affirming the Commissioner's order.