2002 (2) TMI 270 - AT - Customs

Summary

Issues Involved:
1. Confiscation of foreign currency under Section 113(d), (e), and (h) of the Customs Act read with Section 67 of the Foreign Exchange Regulation Act, 1973.
2. Imposition of penalty under Section 114(i) of the Customs Act, 1962.
3. Applicability of Section 77 of the Customs Act.
4. Consideration of redemption fine for confiscated currency.

Summary:

1. Confiscation of Foreign Currency:
The appellant, intercepted at Madras Airport, was found with undeclared US $ 1,95,000 in his baggage. The Customs authorities confiscated the currency u/s 113(d), (e), and (h) of the Customs Act, read with Section 67 of the Foreign Exchange Regulation Act, 1973. The appellant argued that the currency was the unspent portion of the amount declared on arrival in India on 30-5-97. However, the Commissioner held that non-declaration of the currency at the time of departure constituted a violation of Section 77 of the Customs Act and rejected the appellant's explanation.

2. Imposition of Penalty:
A penalty of Rs. 70,000/- was imposed on the appellant u/s 114(i) of the Customs Act, 1962. The appellant contended that the penalty was unwarranted as the currency was legitimately imported and not smuggled. The Commissioner, however, found the appellant's conduct to be deliberate and upheld the penalty.

3. Applicability of Section 77 of the Customs Act:
The appellant argued that Section 77 of the Customs Act applies only to import baggage and not to export baggage. The Commissioner and the Tribunal disagreed, stating that no such restriction is found in Section 77, and the appellant's failure to declare the currency constituted a violation.

4. Consideration of Redemption Fine:
The appellant sought redemption of the confiscated currency on payment of a fine, citing past Tribunal decisions. The majority opinion held that while the currency's confiscation was justified, it should be released on payment of a redemption fine, considering the appellant's bona fide omission and the fact that import of foreign currency is not prohibited. The matter was remanded to the Commissioner for reconsideration in light of this view.

Majority Order:
The impugned order was set aside, and the matter was remanded to the Commissioner (Airport), Chennai, for de novo consideration on the pleas raised by the appellant and for considering the release of the seized foreign currency on payment of redemption fine, in view of the Tribunal judgments.