2002 (7) TMI 142 - AT - Customs

Summary

Issues Involved:
1. Legitimacy of the foreign currency acquisition by Philip Fernandes.
2. Confiscation and penalty imposed on Philip Fernandes.
3. Dropping of penal proceedings against Nilesh Popat and Praveenbhai Kheni.
4. Revenue's appeal for absolute confiscation and penal action.

Summary:

Legitimacy of the Foreign Currency Acquisition by Philip Fernandes:
The adjudicating authority accepted that the foreign currencies were legitimately acquired and imported by Philip Fernandes after verifying certificates from M/s. Thomas Cook Al Rostamani, Dubai. The Commissioner referred to a confirmation letter and found no material from the Revenue to disprove the authenticity of the moneychanger's certificate. The Tribunal found no force in the Revenue's argument that the currency recovered was not the same brought from Dubai, as no such plea was raised in the appeal and there was no basis for the submission.

Confiscation and Penalty Imposed on Philip Fernandes:
The adjudicating authority ordered the confiscation of assorted foreign currencies u/s 113 of the Customs Act, 1962, but allowed Philip Fernandes to redeem the same by depositing it in his NRE bank account on payment of a fine of Rs. 10 lakhs. A personal penalty of Rs. 5 lakhs was imposed u/s 114. The Tribunal reduced the fine to Rs. 1 lakh, considering the lapse was technical in nature, and set aside the penalty imposed on Philip Fernandes.

Dropping of Penal Proceedings Against Nilesh Popat and Praveenbhai Kheni:
The Tribunal upheld the Commissioner's decision to drop penal proceedings against Nilesh Popat and Praveenbhai Kheni, as the charge and finding of conspiracy to smuggle foreign currency were not substantiated. The Tribunal noted that the statements recorded u/s 108 of the Customs Act, 1962, were retracted and inconsistent with documentary evidence, which should be preferred.

Revenue's Appeal for Absolute Confiscation and Penal Action:
The Tribunal dismissed the Revenue's appeal for absolute confiscation and penal action against Philip Fernandes, citing no special circumstances warranting absolute confiscation. The Tribunal referred to previous cases where redemption of foreign currency on payment of fine was permitted and found no substance in the Revenue's prayer for absolute confiscation and penalty.

Conclusion:
Appeal No. C/337/2000-Mum. was partly allowed, reducing the fine and setting aside the penalty on Philip Fernandes. The remaining three appeals by the Revenue (C/106/2001-Mum., C/282/2001-Mum., and C/283/2001-Mum.) were dismissed.