2016 (2) TMI 647 - AT - Customs

Levy of redemption fine and penalty - seizure of foreign currency carried by appellant in person as a passenger - Held that - considering the fact that the appellant was already arrested and remanded to judicial custody for 15 days and he was also prosecuted in the criminal proceedings by the lower court and also considering that where the profit margin is determined based on market price and value of currency is purely based on fluctuation of foreign exchange rate, we find that RF and penalty is on higher side. - imposition of RF reduced from ₹ 11,00,000/- to ₹ 7,00,000/- (Rupees Seven lakhs only) and personal penalty reduced from ₹ 2,50,000/- to ₹ 1,00,000/-. Accordingly, the appeal is partly allowed - Decided partly in favor of appellant.

Summary

Issues:
Seizure of foreign currency, confiscation, redemption fine, penalty, appeal against Tribunal's order, consideration of facts and legal principles, determination of redemption fine and penalty, application of case laws, modification of impugned order, direction for deduction of fine and penalty from sale proceeds or encashment of foreign currency.

Analysis:
The judgment involves a case concerning the seizure of foreign currency from an individual at Chennai Airport, leading to confiscation, imposition of redemption fine, and penalty. The Tribunal's earlier order reducing the redemption fine and penalty was challenged by the Revenue before the Madras High Court, which remanded the matter back to the Tribunal for reconsideration. The key issue revolved around determining the quantum of redemption fine and penalty imposed by the adjudicating authority.

The appellant's counsel argued for a reduction in the redemption fine, citing various legal precedents and emphasizing the lack of profit margin in the case. On the other hand, the Revenue contended that the original redemption fine was fair and justified, referencing case laws to support their position. The Tribunal carefully considered the submissions of both sides, reviewed the case records, and took note of the directions from the Madras High Court.

In its analysis, the Tribunal focused on the methodology used by the adjudicating authority to calculate the redemption fine, emphasizing the need to adhere to Section 125 of the Customs Act. Referring to legal precedents, including a Supreme Court judgment, the Tribunal highlighted the importance of determining the market price of confiscated goods before imposing the redemption fine. It also considered the circumstances of the case, such as the appellant's arrest and prosecution, to assess the proportionality of the fine and penalty.

Based on its evaluation, the Tribunal modified the impugned order by reducing the redemption fine and personal penalty. The Tribunal found that the original amounts were on the higher side considering the market conditions and the appellant's situation. Additionally, the Tribunal directed the Revenue to deduct the fine and penalty from the sale proceeds of the foreign currency or encash the currency if not sold, with any excess amount to be returned to the appellant.

In conclusion, the Tribunal partially allowed the appeal, adjusting the redemption fine and penalty while providing clear directions for the recovery and utilization of the fine and penalty amounts in relation to the seized foreign currency.