2000 (2) TMI 177 - AT - Customs

Summary

Issues Involved:
1. Confiscation of foreign currency and Traveller's Cheques (TCs) under Section 113(d) and (f) of the Customs Act.
2. Confiscation of the country craft "Ya-Hajipir" under Section 115 of the Customs Act.
3. Confiscation of amounts in bank accounts under Section 121 of the Customs Act.
4. Imposition of penalty on Wall Street Finance Ltd. under Section 114 of the Customs Act.

Detailed Analysis:

1. Confiscation of Foreign Currency and Traveller's Cheques (TCs) under Section 113(d) and (f) of the Customs Act:
The Commissioner of Customs confiscated assorted foreign currency including TCs amounting to Rs. 1,43,57,730.15 seized on 27-5-1997 under Section 113(d) and (f) of the Customs Act. The investigation revealed that TCs were sold fraudulently by M/s. Time Travels & Cargo (M/s. TTC) to non-genuine foreign-bound passengers, and the proceeds were deposited in bank accounts. The Tribunal upheld the confiscation, noting that TCs are considered "goods" under Section 2(22) of the Customs Act, and their sale was in violation of the Act.

2. Confiscation of the Country Craft "Ya-Hajipir" under Section 115 of the Customs Act:
The country craft "Ya-Hajipir," used in the smuggling operation, was confiscated under Section 115 of the Customs Act. The craft was intercepted on 25-5-1997, and foreign currency including TCs was recovered. The Tribunal upheld the confiscation, as the craft was used to smuggle goods out of the country.

3. Confiscation of Amounts in Bank Accounts under Section 121 of the Customs Act:
The Commissioner ordered the confiscation of Rs. 68,03,010/- lying in the pay order accounts of M/s. TTC in two banks, and Rs. 23 lakhs identifiable with the proceeds of smuggled TCs, under Section 121 of the Customs Act. The Tribunal examined whether the amounts in the bank accounts could be confiscated under Section 121, which requires that the sale proceeds of smuggled goods be available for confiscation. The Tribunal found that the amounts were indeed sale proceeds of smuggled goods and upheld the confiscation.

4. Imposition of Penalty on Wall Street Finance Ltd. under Section 114 of the Customs Act:
The Commissioner imposed a penalty of Rs. 20 lakhs on Wall Street Finance Ltd. (WSFL) for violation of Section 114(1) of the Customs Act. WSFL was found to have facilitated the fraudulent sale of TCs by M/s. TTC, despite being aware of the irregularities. The Tribunal upheld the penalty, noting that WSFL's actions amounted to aiding and abetting the smuggling operations.

Separate Judgment by Member (T):
The Member (T) disagreed with the finding that WSFL had no locus standi to file the appeal. He held that WSFL was an aggrieved party as the confiscation order deprived them of their actionable claim to the amounts in the bank accounts. He also upheld the confiscation of Rs. 68,03,010/- and Rs. 23 lakhs under Section 121, and the penalty of Rs. 20 lakhs on WSFL under Section 114, emphasizing the need to suppress the mischief and advance the remedy as intended by the Customs Act.

Conclusion:
The Tribunal dismissed the appeal filed by Wall Street Finance Ltd., upholding the confiscation of foreign currency, TCs, the country craft "Ya-Hajipir," and the amounts in the bank accounts, as well as the penalty imposed on WSFL. The judgment emphasized the strict application of the Customs Act to prevent and penalize smuggling activities.