2014 (8) TMI 910 - AT - Customs

Confiscation of currency - Currency neither declared nor permitted by RBI for export - Penalty - Held that - The general principle is that on whose possession the goods are found then that person is to be owner of the goods. In this case, the currency has been recovered from the possession of the appellant and the appellant claims the owner of the goods and the adjudicating authority is holding that he is not the owner of the goods. Therefore, the onus lies on the adjudicating authority to find out who is the owner of the goods. As he has not arrived at a decision as who is the actual owner of the goods, therefore, in all probability the appellant is the owner of the goods as the currency has been recovered from his possession on 08.12.2004. Further, the absolute confiscation has been done by the adjudicating authority holding that the appellant is not the owner of the goods is incorrect in the light of the findings here-in above. Therefore, in these circumstances, I hold that the absolute confiscation of the currency is not warranted. Accordingly, I hold that the Indian currency can be released to the appellant on imposition of redemption fine and penalty - appellant has suffered for 9 years and the quantum of currency is about ₹ 24 lakhs which was seized on 08.12.2004 and also has made expenses on litigations to get the currency released therefore quantum of redemption fine is determined to 10% of the currency seized. I also find the penalty of ₹ 2 lakhs is appropriate. - adjudicating authority to release the currency seized on payment of redemption fine of 10% of currency seized and on payment of penalty of ₹ 2 lakhs - Decided partly in favour of assessee.

Summary

Issues:
1. Seizure and absolute confiscation of Indian currency smuggled outside India.
2. Imposition of penalty on the appellant.
3. Interpretation of whether Indian currency can be redeemed by imposition of redemption fine and penalty in cases of attempted export without RBI permission.

Analysis:
1. The appellant challenged the impugned order where Indian currency was seized and absolutely confiscated, with a penalty imposed. The currency of &8377; 24,17,500/- was found with the appellant at Sahar Airport, not declared for export with RBI permission. Statements were recorded, leading to the decision of absolute confiscation and penalty imposition. The appellant contested the decision, claiming the currency belonged to another individual initially but later explained the source and purpose of the currency, which was not considered by the adjudicating authority. The appellant argued for redemption of the currency instead of absolute confiscation.

2. The matter was referred to the Larger Bench to determine if attempted export of Indian currency without RBI permission warrants absolute confiscation or redemption through a fine and penalty. The Larger Bench held that in such cases, absolute confiscation is possible, but redemption is at the discretion of the proper officer based on circumstances. The case was brought before the tribunal for resolution.

3. The appellant asserted ownership of the currency, recovered from their possession, while the adjudicating authority disputed this claim. The tribunal noted the principle that possession implies ownership, and as the appellant had the currency when intercepted, likely owned it. The tribunal found the absolute confiscation unjustified, ruling in favor of releasing the currency to the appellant upon payment of a redemption fine and penalty. The redemption fine was set at 10% of the seized currency, with a penalty of &8377; 2 lakhs deemed appropriate.

4. The tribunal directed the adjudicating authority to release the currency upon payment of the redemption fine and penalty, considering the appellant's lengthy ordeal and expenses in pursuing the case. The appeal was disposed of with this decision.