9911796707
TMI Blog2004 (12) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... al. C/29/99 : 2. The appellants are a full-fledged Money Changer licence holders given by the Reserve Bank of India under the provisions of Foreign Exchange Regulation Act. In July 1997 the appellants sold foreign exchange to another FFMC known as M/s. Tiruchi Enterprises. Investigations revealed that M/s. Tiruchi Enterprises has obtained and FFMC licence from the Reserve Bank giving in correct particulars about themselves in so far as their address is concerned. Investigations further revealed that M/s. Tiruchi Enterprises after obtaining foreign exchange from various FFMC s were smuggling the foreign exchange out of the country. The sale proceeds thus obtained were being deposited in various banks in which M/s. Tiruchi Enterprises hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... till lying with the above said banks in their pay order account. Since the amounts pertaining to pay orders were still lying in the issuing bank s account, the officers seized this amount and instructed the bank to remit the amounts mentioned in the pay orders in favour of Collector of Customs, Mumbai. The Banks did so. Latter a show cause notice was issued to various persons involved in the racket of smuggling foreign exchange, the appellant, the issuing banks and various others asking them to show cause why penal action should not be taken against the various persons and why the sale proceeds should not be confiscated under Section 121 of the Customs Act. The present appellants are one of the respondents to the show cause notice. 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issuing banks should not be confiscated. It has been done so because the department realised that they are the owners of these amounts even though the amounts are seized from the bank which issued the pay orders in their favour. Since these amounts represented a genuine transaction they cannot be considered to be sale proceeds of smuggled goods. They cannot be punished for acts of commission of M/s. Tiruchi Enterprises. 7. The ld. DR argued that the amounts seized from the banks who issued the pay orders represented sale proceeds of smuggled goods and are therefore liable to confiscation under Section 121 of the Customs Act. He argued that simply because the sale proceeds are deposited in a bank and pay orders are obtained the proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk not to make payment of Rs. 47,58,000/- covered by two demand drafts issued by it in favour of FFMC. The Tribunal held that the appellant before them have no locus standi to challenge the confiscation of the above said amounts. The Tribunal upheld the confiscation of Indian Currency under Section 121 of the Customs Act. These two decisions clearly establish the legal position as to whether the present appellant can lay a claim over the currency seized from the above mentioned banks on the plea that the pay orders were in their favour and have sold foreign exchange against them. The only claimant for the currency seized from the two banks could be either the banks themselves or the persons who deposited those amounts in the banks. 9. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licting decisions of the coordinate Benches of the Tribunal, a Larger Bench needs to be constituted to determine the correct legal position. C/595/Mum. C/565/2000 : 10. The facts in these appeals are identical to the ones in C/29/99. For the reasons given above these appeals also need to be required to a Larger Bench for determining the correct legal position. 11. Thus all the three appeals may be referred to a Larger Bench to determine whether pay orders obtained by tendering proceeds of smuggled goods lying in the account of pay order issuing Bank are liable to confiscation under Section 121 of the Customs Act and whether the FFMC have any claim over the amounts involved in the pay orders even though such amounts are not transferr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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