2019 (3) TMI 1239 - AT - Customs

Smuggling - foreign currency - confiscation - penalties - Held that - The Appellate Authority has extended the benefit to the respondent by observing that the mere possession of foreign currency cannot result in application of the provisions of the Section 111 of the Customs Act and the Revenue is under an onus to prove that the said foreign currency was smuggled into the country. He also appreciated the respondent s stand that foreign currency is not one of the notified items under Section 123 of the Customs Act and as such onus to prove their smuggled nature is on Revenue. In the absence of any evidences to that effect, he set aside the order of the Original Adjudicating Authority. Revenue has not advanced any evidence to show that the foreign currency, in question, was smuggled into the country. As such, the Commissioner (Appeals) is fully agreed upon that in the absence of such evidences, confiscation of the same cannot be uphold, neither penalties can be imposed upon respondents. Appeal dismissed - decided against Revenue.

Summary

Issues involved:
1. Confiscation of foreign currency and vehicle by the Original Adjudicating Authority.
2. Appeal before the Commissioner (Appeals) against the order of the Original Adjudicating Authority.
3. Interpretation of Section 111 of the Customs Act regarding confiscation of improperly imported goods.
4. Burden of proof on Revenue to establish smuggling of foreign currency.
5. Lack of evidence presented by Revenue to prove improper importation of foreign currency.
6. Decision on the appeal by the Appellate Tribunal CESTAT ALLAHABAD.

Analysis:

1. The case involved the confiscation of foreign currency and a vehicle by the Original Adjudicating Authority based on investigations and statements recorded. The Commissioner (Appeals) allowed the appeals, questioning the improper importation of the foreign currency into India and the lack of findings on smuggling in the show cause notice and impugned order.

2. The Commissioner (Appeals) observed that Section 111 of the Customs Act, under which the foreign currency was confiscated, requires evidence of improper importation. The Appellate Authority extended the benefit to the respondent, emphasizing that possession of foreign currency alone does not warrant confiscation without proof of smuggling.

3. The Appellate Tribunal noted that the Revenue failed to provide evidence supporting the claim of smuggling of the foreign currency into the country. As a result, the Tribunal upheld the decision of the Commissioner (Appeals) and rejected the Revenue's appeal, finding no grounds for confiscation or imposition of penalties.

4. The Tribunal emphasized the importance of proving improper importation under Section 111 of the Customs Act, highlighting the absence of evidence presented by the Revenue to support their allegations of smuggling. The burden of proof rested on the Revenue, and without substantiation, the confiscation and penalties could not be upheld.

5. Ultimately, the Appellate Tribunal CESTAT ALLAHABAD disposed of the stay petitions and affirmed the decision to set aside the impugned order of the Original Adjudicating Authority, concluding that without concrete evidence of smuggling, confiscation and penalties could not be justified.

This detailed analysis of the judgment highlights the key legal issues, the interpretation of relevant provisions, the burden of proof, and the decision reached by the Appellate Tribunal CESTAT ALLAHABAD regarding the confiscation of foreign currency and the vehicle.