2022 (8) TMI 556 - AT - Customs

Confiscation - redemption fine - penalty - Indian Currency - Scope of goods as per Section 2 (22) of the Customs Act, 1962 - appellant s contention is that the money was legally procured from his savings - HELD THAT - It is not the case of the appellant that he has declared upfront the currency in his position while he was travelling Abroad and the currency he carried was within limits prescribed under the notification. In terms of the Regulation as discussed above Indian Currency over and above Rs.25,000/- is not permissible to be taken outside India.As far as the Customs Act is concerned, knowledge or otherwise are not material for rendering the goods liable for confiscation. The activity of the appellant was an attempt to export currency over and above the limit. Therefore, the provisions of Section 113 of the Customs Act, 1962 and Section 114 of the Customs Act are attracted. Redemption of Confiscated goods - HELD THAT - In the instant case, the issue involves an individual who is travelling Abroad for his personal work. No business dealing are alleged or indicated. It is not the case of the Department that the appellant was aware of the provisions of the Rules and Regulations - In the facts and circumstance of the case, it is found that absolute confiscation is not warranted. Any punishment needs to be commensurate with the offence. INR of 1,61,500 and Thai Baht of 8000/- are allowed to be redeemed on payment of a fine, of Rs. 10,000/-, in lieu of confiscation - Penalty imposed under Section 114 of the Customs Act, 1962 is reduced to Rs.5000/-. Appeal allowed in part.

Summary

Issues:
1. Seizure and confiscation of currency exceeding permissible limits under FEMA regulations.
2. Maintainability of appeal before the Tribunal.
3. Legal procurement of currency and lack of awareness of export regulations.
4. Confiscation and penalty under Section 114 of the Customs Act, 1962.

Issue 1: Seizure and confiscation of currency exceeding permissible limits under FEMA regulations:

The appellant was intercepted with excess Indian currency and Thai Baht while attempting to travel abroad, violating FEMA regulations. The appellant argued that the currency was legally obtained from personal savings and that he was unaware of the export restrictions. However, the Customs Act deems goods liable for confiscation regardless of knowledge. The Tribunal found the attempted export of currency beyond the limit constituted a violation, satisfying the criteria for confiscation under Section 113D of the Customs Act, 1962.

Issue 2: Maintainability of appeal before the Tribunal:

The Department contended that the appeal related to baggage and should be presented before a competent authority, not the Tribunal. However, the Tribunal clarified that currency and baggage are distinct under the Customs Act, making appeals regarding currency seizures permissible before the Tribunal. Precedents such as Vinod KR. Shaw and Rajesh Kumar Ishwar Parikh supported the Tribunal's decision, establishing the appeal's maintainability.

Issue 3: Legal procurement of currency and lack of awareness of export regulations:

The appellant claimed truthful declaration of the currency during interception, arguing lack of immediate recording of his statement and non-provision of relied-upon documents with the show cause notice. Despite the appellant's assertion of legal procurement and ignorance of export rules, the Tribunal emphasized the strict regulations under FEMA, which prohibit carrying Indian currency exceeding specified limits. The Tribunal concluded that the appellant's actions constituted an attempt to export currency beyond the permissible limit, justifying confiscation under the Customs Act.

Issue 4: Confiscation and penalty under Section 114 of the Customs Act, 1962:

The original and appellate authorities had ordered absolute confiscation of the currency and imposed a penalty under Section 114. The Tribunal, considering the circumstances of the case, found absolute confiscation disproportionate. Citing the need for a balanced decision, the Tribunal allowed redemption of the confiscated currency on payment of a fine, reducing the penalty imposed under Section 114. The Tribunal emphasized the importance of proportionate punishment and exercised discretion in permitting redemption of the currency upon payment of a suitable fine and penalty.

In conclusion, the Tribunal partially allowed the appeal, permitting redemption of the confiscated currency upon payment of a fine and reducing the penalty imposed under Section 114 of the Customs Act, 1962.