1994 (2) TMI 144 - AT - Customs

Summary

Issues:
Determining contravention of Section 18(1) of the Foreign Exchange Regulation Act, 1973 and eligibility for confiscation under Section 113(i) of the Customs Act, 1962 of foreign currency dispatched by authorized dealers in foreign exchange.

Analysis:
The case involved the contravention of Section 18(1) of the FERA and the consequent eligibility for confiscation under Section 113(i) of the Customs Act of foreign currency sent through registered letters by authorized dealers in foreign exchange to their overseas offices. Initially, the Department alleged contravention based on the conditions of the License issued by the RBI and the absence of a required declaration for export. The charge under Section 13(2) of FERA was dropped after clarification from the RBI. The second charge was for violation of Section 18(1) due to the absence of a declaration for export, upheld by the Collector of Customs, leading to confiscation and penalties under Sections 113(i) and 114(i) of the Customs Act.

The appellant argued that Section 13 applies to currency while Section 18 applies to goods other than currency, and since they were exonerated of Section 13 violation, Section 18 should not apply. They contended that no declaration was required for foreign currency export by authorized dealers. The Department argued that Sections 13 and 18 should be read together, citing a notification requiring declarations for all goods exported by post. They maintained that the absence of declarations justified confiscation and penalties under Section 113(i) of the Customs Act.

The Tribunal emphasized that Section 18(1) prohibits export of goods, including currency, without a declaration. The notification prohibiting export by post without a declaration applies to all goods, and failure to comply leads to confiscation under Section 113(i) of the Customs Act. The Tribunal rejected the appellant's argument that currency is not considered goods under Section 18(1) and upheld the confiscation and penalties, albeit reducing the quantum due to the appellants' status as authorized dealers in foreign exchange.

In conclusion, the Tribunal upheld the finding of contravention of Section 18(1) of FERA and Section 82 of the Customs Act, leading to confiscation and penalties. The appellants were deemed guilty of contravention under Section 113(i) read with Section 18(1) and the relevant notification, but the fines and penalties were reduced considering their authorized dealer status. The impugned order was confirmed with modifications to the quantum of fines and penalties.