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2022 (4) TMI 212 - AT - CustomsMaintainability of application - Smuggling - foreign currency - illicit export of currency - actual owners versus beneficial owners - Levy of penalty under Section 114(i) of the Customs Act 1962 read with Section 13 of the Foreign Exchange Management Act 1999 on beneficial owners - HELD THAT - The facts alleged by the appellant in the memo of appeal have to be tested in the light of the statements recorded under section 108 of the Customs Act. The statement made by Amit Bali needs to be examined first. In the statement recorded on 20.08.2018 when asked whether the said recovered currency belonged to him Amit Bali stated that the recovered currency belonged to the appellant and was handed over to him (Amit Bali) by Hemant Dahiya to look after the expenses of the appellant. He further stated that the bag from which the currency was recovered belonged to him. It is this statement wherein Amit Bali stated that the recovered currency belong to the appellant that the concept of beneficial owner has been drawn though it needs to be noted that at the same time Amit Bali had stated that the currency was handed over to him by Hemant Dahiya who is one of the Director of SEMPL - It is clear that Amit Bali had clarified that the foreign currency that he was carrying in his hand baggage actually belonged to SEMPL and was to be utilized for the event organised by SEMPL for HMC. The Commissioner (Appeals) placed much emphasis on the earlier statement made by Amit Bali that the foreign currency belonged to the appellant without appreciating the subsequent statements made by Amit Bali. The appellant in his statement recorded on 20.08.2018 stated that he had meetings with business clients at London after which he was scheduled to go to Baltimore for business meetings. He further stated that Amit Bali assisted him during his business travel and that he was not aware that Amit Bali was carrying foreign currency - statements made under section 108 of the Customs Act give credence to the factual averments made by the appellant regarding the contractual arrangement between HMC and SEMPL and the fact that the foreign currency did not belong to the appellant and in fact belonged to SEMPL which currency was in the possession of Amit Bali for meeting the expenses to be undertaken. It also transpires that SEMPL would raise invoices for such expenses together with its service charge and thereafter payments were made by HMC. The actual owner of the foreign currency having been identified the concept of beneficial owner does not arise. The Commissioner (Appeals) therefore was not justified in reversing the finding recorded by the Additional Commissioner that the concept of beneficial owner would not arise in the facts and circumstances of the case. The issue as to whether an appeal would be maintainable or not before the Tribunal came up for examination before the Tribunal in COMMR. OF CUSTOMS KOLKATA VERSUS VINOD KR. SHAW 2002 (12) TMI 390 - CEGAT KOLKATA . The revenue had filed an application for rectification of mistake in the final order dated 15.05.2002 passed by the Tribunal for the reason that the Tribunal had no jurisdiction to decide a matter relating to confiscation of currency seized in view of the provisions of section 129A (1) of the Customs Act - It was decided in the case that I agree with the appellants contention that the provisions of Section 2(22) of the Customs Act which defines the goods makes a clear distinction between the baggage and currency. If the Indian Currency is included in the expression baggage there was no need to define the currency separately. I also find force in the appellants contention that the charges against the appellants are under the provisions of Section 113(d) i.e. for misdeclaration. As such I hold that the Tribunal was having jurisdiction to decide the matter. No merits are found in the Revenue s application and miscellaneous application is accordingly rejected. There are no force in the contention advanced by the learned authorised representative appearing for the department that this appeal would not be maintainable before this Tribunal - the appellant is not a beneficial owner defined under section 2(3A) of the Customs Act the order dated 30.07.2021 passed by the Commissioner (Appeals) that imposes penalty and fine upon the appellant treating the appellant as a beneficial owner cannot be sustained. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the appellant can be considered a "beneficial owner" under Section 2(3A) of the Customs Act, 1962. 2. The applicability of penalties and fines under Sections 114(i) and 125 of the Customs Act, 1962. 3. The maintainability of the appeal under Section 129A of the Customs Act, 1962. Issue-Wise Detailed Analysis: 1. Beneficial Owner under Section 2(3A) of the Customs Act, 1962: The appellant, Chairman, CEO, and Managing Director of Hero MotoCorp Limited (HMC), was alleged to be the "beneficial owner" of foreign currency seized from an employee of M/s Salt Experience and Management Pvt. Ltd. (SEMPL). The Commissioner of Customs (Appeals) modified the Additional Commissioner's order, imposing penalties and fines on the appellant by treating him as a "beneficial owner" under Section 2(3A) of the Customs Act. The appellant argued that the foreign currency was managed by SEMPL for corporate events and not for his personal use. The Additional Commissioner had previously dropped proceedings against the appellant, stating that the appellant was unaware of the currency being carried by SEMPL's employee, Amit Bali, and that HMC was merely a recipient of services from SEMPL. The Tribunal reviewed various statements recorded under Section 108 of the Customs Act, including those of Amit Bali, Hemant Dahiya (Director of SEMPL), K.R. Raman (Finance Head of SEMPL), and the appellant. It concluded that the foreign currency belonged to SEMPL and was intended for corporate expenses related to events organized by HMC. The Tribunal found that the concept of "beneficial owner" was misapplied by the Commissioner (Appeals) as the actual owner of the currency was identified as SEMPL. 2. Applicability of Penalties and Fines: The Commissioner (Appeals) had imposed penalties and fines on the appellant under Sections 114(i) and 125 of the Customs Act, 1962, by treating him as the "beneficial owner" of the seized foreign currency. The Tribunal, however, found that the foreign currency was intended for corporate expenses managed by SEMPL and not for the appellant's personal use. The Tribunal held that the penalties and fines were wrongly imposed based on conjectures and surmises. 3. Maintainability of Appeal under Section 129A: The department argued that the appeal was not maintainable under Section 129A of the Customs Act, as the issue related to the export of baggage. The Tribunal examined the relevant provisions and previous judgments, including those from the Calcutta High Court and the Ahmedabad Bench of the Tribunal. It concluded that the appeal was maintainable, as the seized foreign currency was considered "goods" and not "baggage." Conclusion: The Tribunal set aside the order dated 30.07.2021 passed by the Commissioner of Customs (Appeals), concluding that the appellant was not a "beneficial owner" under Section 2(3A) of the Customs Act. The penalties and fines imposed on the appellant were also set aside, and the appeal was allowed.
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