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TMI Blog2003 (5) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... gn Currency to which he replied in the negative. Not being satisfied with his reply, the examination of his baggage as well as his Personal Search were conducted in the presence of two independent witnesses. The examination of his baggage did not lead to anything incriminating being recovered. However, the Personal Search of the Appellant led to the recovery of the following currencies : - US$ = 22,060 (Cash) US$ = 18,000 (Travellers Cheques) Naira= 12,300 (hereinafter referred to as the said Currency ). The said Currency was kept in five brown coloured envelopes concealed under the stitching of the waistband of the shorts worn by the Appellant. All the Travellers Cheques were unsigned, undated and the name of the Appellant was not mentioned on any of them. On demand, the Appellant could not produce any evidence, documentary or otherwise for the lawful acquisition, possession or importation of the said Currency. The Appellant in his voluntary statement recorded under Section 108 of the Customs Act, 1962 (hereinafter referred to as the Act ) and in the Panchnama dated 21-3-2003, admitted to the possession, recovery as well as the manner/mode of recovery of the said cur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivities cannot be harmful to the conservation of Foreign Exchange of the Indian Government. There was no intention on the part of the Appellant to mis-declare the Foreign Currency but it happened owing to the situation he has already explained viz. the presence and fear of fellow countrymen who were also at the Currency Declaration Counter. The Appellant has further argued that non-declaration of Currency at the time of import is merely a technical irregularity because there is otherwise no bar for bringing of Foreign Exchange into India and no Customs Duty on import of Foreign Currency is involved. Continuing his submissions, the Appellant has contended that import of Foreign Currency into India is not prohibited as claimed in the Impugned Order by the Adjudicating Authority. To substantiate his view, the Appellant has advanced the following reasons : - (a) Purchase from Public According to Para 3E 2 of Foreign Exchange Manual of Reserve Bank of India (RBI), Authorised Dealers and their exchange bureaux may freely purchase Foreign Currency Notes and Coins from a person, whether a traveller or not, against payment in Rupees. Reserve Bank has granted general permission to perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 512/2000, dated 11-10-2000 in the case of Amarjeet Singh Bhalla. In view of his submissions mentioned hereinabove, the Appellant has prayed that he may be allowed to redeem the said Foreign Currency on payment of some fine in terms of Section 125 of the Act . 5. Personal Hearing was granted to the Appellant on 10-4-2003. The Appellant himself and Shri S.S. Arora, Advocate appeared before me and reiterated the submissions made in the Appeal Memorandum. 6. I have carefully considered the submissions made by the Appellant in his Appeal Memorandum as also those advanced by his Advocate during the course of Personal Hearing held on 10-4-2003. I observe that the Adjudicating Authority vide the Impugned Order dated 26-3-2003 has ordered absolute confiscation of seized foreign currency equivalent to US$ 30,060 and Naira 12,300 under the provisions of Sections 111(d) and 111(1) of the Act mainly on the grounds that - (1) in accordance with the proviso to Regulation 6(3) of the Foreign Exchange Management (Export Import of Currency) Regulations, 2000, issued under Clause (g) of sub-section (3) of Section 6 of FEMA, 1999, declaration of foreign currency before the Customs Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e allowed to be redeemed on payment of Redemption Fine and Penalty. As regards non-declaration of foreign currency being merely and exclusively a technical offence as has been argued by the Appellant, I find that there is no force or merit in this plea; it is not disputed that the goods were liable for confiscation. According to Regulation 6(3) of Foreign Exchange Management (Export and Import of Currency) Regulations, 2000, the declaration of foreign currency above a certain amount (i.e. foreign exchange equivalent to US$ 10,000 but cash not exceeding US $ 5000) prescribed in the said Regulation by any passenger in the Currency Declaration Form before the Customs authorities is a statutory and obligatory requirement This is of vital significance and importance. Further, I find that there is no other requirement to be fulfilled by a passenger importing foreign exchange into India. I therefore conclude that the prescribed declaration is mandatory in nature and not just a technical or procedural requirement. I am convinced that it is not the intention of the Government to mete out stringent punishment (confiscation and penalty) for mere breach of a procedural or technical offence. Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e required to be seen in the light of and against the backdrop of fast changing global economic scenario in which Government controls on import and export of foreign exchange are kept to the minimum to facilitate free flow of funds across international borders. On the other hand, with liberal foreign exchange control regime(s), a large number of cases of attempt(s) to smuggle into/out of the country foreign currency, travellers cheques and other financial instruments have come to notice. The least safeguard i.e. Declaration in CDF provided in the statute is being taken and interpreted by unscrupulous elements as a mere procedural or technical requirement and is thus being flouted with impunity. No doubt free flow of foreign exchange into the country in the context of liberalised global economy ought to be accorded the highest priority but this cannot be allowed in the face of attempts to misuse the liberal foreign exchange management system which can and does result into money laundering activities. Needless to say, the spread of the cancer like tentacles of money laundering is becoming the biggest menace worldwide and a strong necessity has been felt to curb it/deal with it with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed not be insisted upon if the tenderer is unable, for any reason, to produce the same. I observe that this relaxation has been envisaged to provide facilitation to those travellers who have declared the currency in Currency Declaration Form before the Customs authorities at the time of their arrival. I therefore, hold that while granting relaxation to the Authorized Foreign Exchange Dealer(s) in allowing encashment of foreign currency to the traveller in case the traveller, for any reason, is not able to furnish CDF, it is certainly not the intention of the Government to obliterate the distinction between the foreign currency declared in CDF and the foreign currency brought/smuggled or attempted to be smuggled into/out of India through illegal channels like money laundering etc. In my considered opinion, undeclared foreign currency brought into India unlawfully and through illegal channel(s) cannot be legalized by taking advantage of the relaxation provided in the RBI Manual. I hold that this is merely a facilitation measure. I, therefore conclude that this plea advanced by the Appellant does not help him in any way; rather, it casts serious doubts and aspersions on his conduct. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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