2017 (11) TMI 895 - AT - Customs

Absolute confiscation - penalty - Smuggling - US Dollar - seizure on the reasonable belief that the same was clandestinely attempted to be exported in illicit manner in contravention of the provisions of Section 11 of the CA read with Section 3(2) of (Foreign Trade Development and Regulation) Act, 1992 (FTDR) Sections 3 & 4 of Foreign Exchange Management Act, 1999 (FEMA) - Held that - the findings arrived at by the Commr. (Appeals) are not being rebutted by the Revenue and no evidence to the contrary stands placed on record - The appellate authority has observed that there is no admission of guilt by either of the assesses and there are no investigations by the Revenue from various angles, thus requiring the impugned orders to be set aside - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Seizure of US Dollars and subsequent legal proceedings.
2. Confiscation of currency and imposition of penalties.
3. Appeal against the order of the original adjudicating authority.

Analysis:
1. The case involved the seizure of 40,000 US Dollars from an individual who failed to produce valid documents for licit possession. The Customs Officers seized the currency under relevant legal provisions due to suspicions of illicit export. The individual, along with another appellant, faced absolute confiscation of the currency and personal penalties under the Customs Act. The Commissioner (Appeals) allowed the appeal, considering the explanations provided by the appellants regarding the legitimate acquisition and intended deposit of the foreign currency. The Commissioner found discrepancies insignificant and noted the appellants' compliance with RBI guidelines and provision of valid documents supporting the currency acquisition.

2. The Commissioner observed that the appellant was authorized to deal in foreign exchange and had valid documents supporting the acquisition of the seized currency. The appellant explained the delay in submitting the currency due to hospitalization, supported by documentary evidence. Allegations of failure to submit Customs Declaration Certificates were refuted, with clarification on the exemption from CDF submission for amounts below $5,000. The Department's claim regarding the source of funds for currency acquisition was countered by declarations of loans received, authenticated by an advocate, though the timing of authentication was questioned. The lower authority's attempt to discredit the declarations lacked substantial evidence and was deemed insufficient to establish illicit dealings.

3. The appellate authority, considering precedents and lack of contradictory evidence from the Revenue, set aside the impugned orders due to the absence of guilt admission and comprehensive investigations. The Revenue failed to provide evidence contradicting the Commissioner's findings, leading to the rejection of the Revenue's appeals. The judgment highlighted the importance of thorough investigations and the burden of proof on the Revenue in such cases, ultimately upholding the Commissioner's decision in favor of the appellants.