9911796707
TMI Blog2014 (9) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... two independent witnesses as to whether he was in possession of any foreign currency, the passenger replied that he was carrying only 50 US dollars. Not satisfied with the reply, the person and baggage were checked in the presence of the independent witnesses, which resulted in the recovery of 55,500 US $, 710 Singapore dollars and 7370 Thai Bhats. Statement was recorded from the passenger, since he did not declare the said currency nor was in possession of any valid documents to prove the legal export of the foreign currencies out of India. The foreign currencies, which attempted to export out of India totally equivalent to Indian Rs. 26,42,625/, were seized under a mahazar for action under the Customs Act, 1962 read with FEMA, 1999. The statement of the passenger was recorded on 03.10.2001. He explained that he had taken the money for the purpose of exploring the possibility of starting a new business, as he had already suffered great loss in India. He also stated that he procured the said amount from nine unknown brokers at Burma Bazaar and proceeded to go abroad taking the said currency without declaration. His house was also searched and statements were recorded. He was arres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nger to carry while going abroad. Therefore, the objection, if at all, can be the only respect of the remaining amount. In any event, absolute confiscation and heavy were not called for. 6. In view of what has been stated above, we set aside the absolute confiscation and allow the redemption on payment of a fine of Rs. 2 lakh. The penalty is also reduced to Rs. 1 lakh. The appeal is disposed of in the above terms. The appellant shall be entitled for consequential relief, if any." 5. Aggrieved by the order of the Tribunal, the Revenue has preferred the present appeal before this Court. 6. Learned counsel appearing for the Revenue submits that the first respondent - passenger had misdeclared that he was carrying only 500 US dollars. Hence, for the misdeclaration, he was liable for action under Section 113 of the Customs Act, 1962. Further, the attempt to smuggle Foreign Currency out of Indian territory is against the provisions of the Customs Act and the FEMA and is therefore liable for confiscation. He also submits that the first respondent - passenger had not produced any valid documents in support of his attempt to export foreign currencies. As per the provisions of FEMA, a pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y foreign currency. 7. Export of foreign exchange and currency notes. (1) An authorized person may send out of India foreign currency acquired in normal course of business. (2) any person may take or send out of India, - (i) cheques drawn on foreign currency account maintained in accordance with Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2000; (ii) foreign exchange obtained by him by drawal from an authorized person in accordance with the provisions of the Act or the rules or regulations or directions made or issued thereunder 12. Section 113 of the Customs Act imposes certain prohibition and it includes foreign exchange. In the present case, the jurisdiction Authority has invoked Section 113 (d), (e) and (h) of the Customs Act together with Foreign Exchange Management (Export & Import of Currency) Regulations, 2000, framed under Foreign Exchange Management Act, 1999. Section 2(22)(d) of the Customs Act, defines goods to include currency and negotiable instruments, which is corresponding to Section 2(h) of the FEMA. Consequently, the foreign currency in question, attempted to be exported contrary to the prohi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approval and Schedule III also come with the rider that prior approval of the Reserve Bank of India should be obtained. Assuming that a person is permitted to carry 25,000 US $ for business purpose, the fact remains, that the said drawal of the foreign currency should be only from an authorized person in terms of Rule 2(b) of the Foreign Exchange Management (Current Account Transactions) Rules, 2000. The passenger, in this case, attempted to take the money out of India without a proper declaration and has not obtained from an authorized person, thereby, he has violated the Foreign Exchange Management (Export and Import of Currency) Regulations, 2000. Therefore, the Department was justified in rightly invoking the said provision. The Tribunal, without adverting to the prohibition imposed under Regulation 5 of the Foreign Exchange Management (Export and Import of Currency) Regulations, 2000 has come to the erroneous conclusion that the amount not exceeding 25,000 US $ may be freely taken out of India. If both the Rules and Regulations are properly applied to the facts of the present case, it will be evident that the first respondent - passenger in this case has clearly violated the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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