1998 (11) TMI 269 - AT - Customs

Summary

Issues Involved:
1. Confiscation of foreign currency.
2. Legality of the foreign currency's import and export.
3. Imposition of penalties on the individuals involved.

Detailed Analysis:

1. Confiscation of Foreign Currency:
The Customs officers seized U.S. $ 2,89,250/- from a grey suitcase and U.S. $ 1,14,300/- from a black briefcase belonging to Ajit K. Dodia at Sahar Airport. The Commissioner confirmed the confiscation of U.S. $ 1,14,300/- under Clauses (d) and (i) of Section 113 of the Customs Act, 1962, as it was undisputedly sought to be exported without declaration. The Tribunal upheld the confiscation of this amount.

2. Legality of the Foreign Currency's Import and Export:
Jatin Jhaveri produced two currency declaration forms indicating the import of U.S. $ 2,54,000/- and U.S. $ 35,250/- in 1993. The Commissioner did not deny the issuance of these forms but emphasized Jatin Jhaveri's suspicious behavior and flight from the investigation. Despite the legality of the currency's import, the Tribunal held that the currency was liable to confiscation for attempted unauthorized exportation, as no permission from the Reserve Bank of India (RBI) was shown for taking out the currency. The Tribunal noted that Notification 10/73RBI required RBI's permission for residents to take out currency brought in.

3. Imposition of Penalties:
- Ajit K. Dodia: Initially claimed ignorance of the currency but later retracted his statement, alleging coercion. The Tribunal found that he was aware of the presence of the currency and liable to penalty under Section 114 of the Customs Act for not declaring it. The penalty on Ajit Dodia was reduced from Rs. 2.00 lacs to Rs. 1.00 lac.
- Jitendra Dodia: Assisted in packing the currency but claimed it was legally accounted for by his employer, Jatin Jhaveri. The Tribunal found no evidence that Jitendra Dodia knew the currency was not legally acquired and thus did not justify a penalty on him.
- Jatin Jhaveri: Disowned the currency initially but later claimed ownership. The Tribunal acknowledged his right to make a claim and noted no other claimant for the currency. Despite the legality of the currency's import, the Tribunal held Jatin Jhaveri liable for attempting to export it without RBI's permission. The penalty on Jatin Jhaveri was reduced from Rs. 10.00 lacs to Rs. 7.00 lacs.

Conclusion:
The Tribunal confirmed the confiscation of U.S. $ 1,14,300/- and held the remaining U.S. $ 2,89,250/- liable to confiscation but allowed it to be re-exported or disposed of per RBI's directions on payment of a fine of Rs. 9.00 lacs. Penalties on Ajit Dodia and Jatin Jhaveri were reduced, and no penalty was imposed on Jitendra Dodia. Appeals C/577/95 was allowed, and Appeals C/537/95 and C/576/95 were allowed in part.