2000 (11) TMI 199 - AT - Customs

Summary

Issues:
1. Seizure of foreign currency and incriminating documents at the airport.
2. Statements and depositions of individuals involved in the case.
3. Allegations of violation of RBI instructions and FERA provisions.
4. Confiscation of Indian currency and foreign currency.
5. Challenge to the confiscation and alternative prayer for release of foreign currency.

Analysis:

1. The case involved the interception of individuals at the airport with foreign currency, leading to the seizure of US $ 1,50,000 and incriminating documents. The investigation revealed a network involving the transportation and sale of foreign currency for illegal activities.

2. Statements of various individuals, including Shri Gulkhan, Shri Abubacker, Shri Firoz Batliwala, and others, were recorded. These statements detailed the acquisition, sale, and smuggling of foreign currency, implicating multiple parties in the syndicate.

3. The Department alleged that the appellants violated RBI instructions and FERA provisions by engaging in transactions that facilitated illegal activities. The violation of specific paragraphs of the Memorandum of Instructions issued by the RBI under FERA led to penalties being imposed on the appellants.

4. The Adjudicating Authority upheld the confiscation of Indian currency as proceeds from the sale of foreign currency at higher rates for illegal export purposes. The seized foreign currency was directed to be handed over to the Directorate of Enforcement for further action, as no claimant came forward.

5. The appeal challenged the confiscation of Indian currency and sought the release of the foreign currency. The Tribunal upheld the confiscation of the Indian currency but accepted the alternative prayer for the return of US $ 1,30,000 to the appellants, as it was deemed untainted money not subject to confiscation.

In conclusion, the judgment addressed the complex web of illegal activities involving the acquisition, sale, and smuggling of foreign currency. While upholding certain confiscations, the Tribunal granted the appellants' request for the return of a portion of the foreign currency, emphasizing its untainted nature. The decision underscored the importance of complying with regulatory provisions and penalizing violations while ensuring fairness in adjudicating claims related to seized assets.