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2019 (11) TMI 70 - AT - CustomsSmuggling - Indian Currency - absolute confiscation - imposition of penalties u/s 114 of CA - HELD THAT - The undisputed facts are that the Appellant Shri Vasant Kumar Khakkar entered into Dr. B.R. Ambedkar International airport, Nagpur with Indian currency of ₹ 22,50,000/- on 18.05.2009 on his way to Sharjah by taking on Flight No.G-9-410. It is pleaded by the Appellant that while screening of the baggage by CISF, the Indian currency was detected and on information to the Customs Department, the same was seized. Thus the argument by the learned Advocate for the Appellant that since the Appellant has not taken their boarding pass by checking-in, nor completed the security and reached the Customs counter, hence detection of currency at the stage of screening of the baggage could at best be considered as preparation but not an attempt to export of the Indian currency out of the country. Any goods attempted to be exported or brought within the limits of Customs area for the purpose of being exported, contrary to the any prohibition, would result into confiscation. In the present case, the goods have been brought into the airport by the Appellant Shri Vasant Kumar Khakkar with an intention to take the same to Sharjah. However, on being detected while screening the baggage by CISF, it is their argument that he has expressed his desire to return back instead of continuing his journey, but the customs authorities seized the same. Therefore, their plea that the action of the Appellant has remained at the stage of preparation only and no attempt has been made to export the Indian currency out of India. Confiscation - HELD THAT - Sub-sections (d) of Section 113 consists of two independent alternative situations viz. (1) the goods attempted to be exported and (2) or brought within the limits of any Customs area for the purpose of being exported. In the present case, undisputedly, both the conditions are present. The second situation prescribed under sub-section (d) is satisfied, inasmuch as both Shri Vasant Kumar Khakkar and Smt. Renuka Vasant Khakkar, in their respective statements submitted that the Indian currency was obtained by selling their jewellery by Shri Vasant Kumar Khakkar to Sharjah and for said purpose on 18.05.2009, the Indian currency was brought to Nagpur International airport a notified Customs area. Therefore, the confiscation of the Indian Currency of ₹ 22.50 lakhs under Section 113 (d) of the Customs Act, 1962 is justified. Penalty on the Appellant Shri Vasant Kumar Khakkar - HELD THAT - There are enough material/evidence to come to the conclusion that Shri Vasant Kumar Khakkar has contravened the provisions of the Customs Act, 1962 and aware of the law being a frequent traveller that the Indian currency was carried by him in violation of Provisions of Section 113(d) of the Customs Act, 1962 read with Regulation 3 of Foreign Exchange Management (Export and Import of Currency) Regulations, 2000 framed under Section 6(3)(g) read with Section 47 of Foreign Exchange Management Act, 1999 - the quantum of penalty is however reduced. Penalty on Smt. Renuka Vasant Khakkar - HELD THAT - There are no justification for imposition of penalty on her only on the ground that she was aware that her husband Shri Vasant Kumar Khakkar would be carrying ₹ 22.50 lakhs to Sharhah, when she was no way concerned in obtaining permission nor in any manner associated to carry the said Indian currency without seeking necessary permission from the appropriate authorities in compliance of various provisions of law necessary to carry huge amount of Indian currency to Sharjah - penalty on Smt.Renuka Vasant Khakkar is set aside. Appeal allowed in part.
Issues Involved:
1. Confiscation of Indian currency under Section 113(d) and (e) of the Customs Act, 1962. 2. Imposition of penalties under Section 114 of the Customs Act, 1962 on the appellants. 3. Distinction between 'preparation' and 'attempt' to export Indian currency. 4. Justification of penalty on Smt. Renuka Vasant Khakkar. Issue-wise Detailed Analysis: 1. Confiscation of Indian Currency under Section 113(d) and (e) of the Customs Act, 1962: The appellant, Shri Vasant Kumar Khakkar, was found with ?22,50,000/- in Indian currency at Nagpur International Airport, intending to travel to Sharjah. The currency was detected during baggage screening by CISF personnel and subsequently seized by Customs authorities. The Customs Act, 1962, under Section 113(d), provides for the confiscation of goods attempted to be exported or brought within the limits of any customs area for the purpose of being exported, contrary to any prohibition. The tribunal concluded that the appellant's actions constituted an attempt to export the currency, as he had already brought it to the airport, a customs-notified area, with the intention to take it to Sharjah. However, the tribunal found that Section 113(e), which pertains to goods found concealed in a package, was not applicable since the currency was not concealed but kept in pouches within the baggage. 2. Imposition of Penalties under Section 114 of the Customs Act, 1962 on the Appellants: The tribunal examined whether the penalties imposed on the appellants were justified. The penalty on Shri Vasant Kumar Khakkar was initially ?45.00 lakhs. The tribunal found sufficient evidence to conclude that he had contravened the provisions of the Customs Act, 1962, and was aware of the legal limitations on carrying Indian currency abroad. However, considering the circumstances, the tribunal deemed the penalty excessive and reduced it to ?5.00 lakhs. For Smt. Renuka Vasant Khakkar, the tribunal found no justification for the penalty, as she was not involved in obtaining permission or carrying the currency without necessary approvals. Consequently, the penalty on her was set aside. 3. Distinction Between 'Preparation' and 'Attempt' to Export Indian Currency: The tribunal addressed the argument that the appellant's actions constituted mere preparation, not an attempt to export the currency. Citing the Supreme Court's definition in the case of State of Maharashtra Vs Mohd. Yakub & Others, the tribunal clarified that an 'attempt' involves deliberate overt steps towards committing an offence, beyond mere preparation. In this case, the appellant had completed the preparation stage and had taken significant steps towards exporting the currency, including bringing it to the airport and preparing to board a flight to Sharjah. Thus, the tribunal concluded that the appellant's actions amounted to an attempt to export the currency. 4. Justification of Penalty on Smt. Renuka Vasant Khakkar: The tribunal found no evidence to support the penalty imposed on Smt. Renuka Vasant Khakkar. Although she was aware that her husband was carrying the currency, she was not involved in obtaining the necessary permissions or in the act of carrying the currency. The tribunal referred to previous judgments, including B. Chellapan Vs CCE, Tiruchirapalli, and R.P. Narayana Vs CC, Madras, to support the conclusion that mere knowledge of the act does not justify a penalty under Section 114 of the Customs Act, 1962. Consequently, the penalty on Smt. Renuka Vasant Khakkar was set aside. Conclusion: The tribunal modified the impugned order, reducing the penalty on Shri Vasant Kumar Khakkar to ?5.00 lakhs and setting aside the penalty on Smt. Renuka Vasant Khakkar. The appeal by Shri Vasant Kumar Khakkar was partly allowed, and the appeal by Smt. Renuka Vasant Khakkar was fully allowed.
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