2020 (1) TMI 62 - HC - Customs

Smuggling - Indian Currency - only issue pressed by the Revenue, before the Commissioner (Appeals), was that the AC ought not to have allowed release of the Indian currency to the petitioners on payment of redemption fine and penalty - HELD THAT - The owner of the currency being Surender Gupta (Petitioner No. 2), there could, undisputedly, be no question of releasing the currency to Petitioner No. 1. We are, however, completely at a loss as to how, on this ground, the Revisionary Authority could allow the Revision Application of the Revenue. Both the petitioners were before him. A reading of the Order-in-Original of the AC does not indicate that option to redeem the currency had been granted, by the AC, to Petitioner No. 1. The Order-in-Appeal of the Commissioner (Appeals) makes the matter clear by observing that, as the owner, i.e., Petitioner No. 2, was known, redemption of the currency could be granted to Petitioner No. 2. In this backdrop, it is impossible to understand how the Revisionary Authority set aside the said order, by holding that redemption of the currency could not be granted to Petitioner No. 1. Both the petitioners were before the Revisionary Authority. Even if, for a moment, it were to be assumed that the Revisionary Authority read the orders of the authorities below as allowing the redemption of the currency to Petitioner No. 1, all that he was required to do to remedy the situation, was to substitute the said direction by permitting redemption of the currency to Petitioner No. 2. There was no occasion, whatsoever, for the Revisionary Authority to set aside the Order-in-Appeal, wholesale, thereby rendering the seized currency irredeemable, even by Petitioner No. 2. Exercise of discretion, by judicial, or quasi-judicial authorities, merits interference only where the exercise is perverse or tainted by patent illegality, or is tainted by oblique motives Mangalam Organics Ltd. v. UOI 2017 (4) TMI 1223 - SUPREME COURT . No illegality, much less perversity, is discernible in the decision, of the AC, to allow redemption of the seized currency on payment of redemption fine of ₹ 50,000/-. The Commissioner (Appeals) rightly refused to interfere with the said decision, and the Revisionary Authority, in an order which reflects total non-application of mind, chose to reverse the said decision. The decision of the Commissioner (Appeals) as well as the order of the AC stands affirmed - The seized currency shall, therefore, forthwith be returned to Petitioner No. 2 - petition allowed.

Summary

Issues:
1. Interpretation of Section 125 of the Customs Act regarding redemption of seized currency.
2. Discretion of authorities in allowing redemption of prohibited goods.
3. Revisionary Authority's power to set aside previous orders.

Analysis:
1. The petitioners challenged the decision of the Revisionary Authority regarding the redemption of seized currency under Section 125 of the Customs Act. The AC initially held that the currency, in excess of the permissible limit, was liable to confiscation under Section 113 of the Customs Act. However, the Commissioner (Appeals) allowed redemption as the owner of the currency was known. The Revisionary Authority set aside this decision, stating that redemption could not be granted to Petitioner No. 1 as he was not the owner. The High Court noted that Section 125 mandates redemption to the owner or the person from whom the goods were seized, and since Petitioner No. 2 was the owner, the currency could not be released to Petitioner No. 1.

2. The Revenue contended that since the seized currency was "prohibited," redemption should not have been allowed, and the currency should have been confiscated. However, Section 125 allows for redemption even in the case of prohibited goods, with discretion vested in the authorities. The Commissioner (Appeals) correctly noted this legal position and upheld the redemption decision of the AC. The High Court agreed, emphasizing that interference with discretion is warranted only in cases of perversity or illegality, which was not present in this matter.

3. The Revisionary Authority's decision to set aside the orders without considering the option to allow redemption to Petitioner No. 2 was deemed as a total non-application of mind by the High Court. The Court upheld the decisions of the Commissioner (Appeals) and the AC, directing the immediate return of the seized currency to Petitioner No. 2. The High Court allowed the writ petition, emphasizing the correct application of the law and the exercise of discretion by the lower authorities.

This comprehensive analysis of the judgment addresses the key legal issues involved and the reasoning behind the High Court's decision in the case.