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TMI Blog2014 (9) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... ontends that the foreign currency which has been obtained by the passenger otherwise through an authorized person is liable for confiscation on that score also. Provision is made under the Foreign Exchange Management (Current Account Transactions) Rules, 2000, which imposes prohibition in respect of Schedule I, restriction in Schedule II transaction, which are to be done on prior 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 - Tribunal fell into error by setting aside the order of absolute confiscation - Decided in favor of Revenue. Regarding redemption fine and penalty u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India totally equivalent to Indian ₹ 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 arrested on 04.10.2001 and remanded to judicial custody. On the request of the passenger, personal hearing was granted on 27.12.2001 and the case was adjudicated. 3. On hearing the submissions made by the passenger and also the records, the Commissioner came to hold that the foreign currency equivalent to Indian ₹ 26,42,625/-, attempted to be exported out of India without any valid document and for which there was no proof of legal acquisition, was liable for confiscation under Section 113 (d), (e) and (h) of the Customs Act, 1962 read with Foreign Exchange Management (Export Import of Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 passenger can legally carry only 2,000 US $ at a time and subject to a maximum of 10,000 US $ in a year. Hence, the Tribunal is incorrect in holding that foreign exchange upto 25,000 US $ is permissible for a passenger to carry while going abroad. He further submits that 25,000 US $ is permissible only when a person has obtained prior approval from the Reserve Bank of India. Here, the first respondent - passenger has not obtained prior approval from the Reserve Bank of India. Hence, the order of the Tribunal may be set aside. 7. Per contra, learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 prohibition without there being a special or general permission by the Reserve Bank of India was held to be liable for confiscation. The Department contends that the foreign currency which has been obtained by the passenger otherwise through an authorized person is liable for confiscation on that score also. 13. In view of the above, the Original Authority has ordered absolute confiscation. We find, in the present case, the passenger has concealed the currency of 55,500 US dollars and other currencies, attempted to be take it out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorized 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 provisions of the FEMA, more particularly Regulation 5 of the Foreign Exchange Management (Export and Import of Currency) Regulations, 2000 read with Section 113 of the Customs Act. Therefore, the Tribunal fell into error by setting aside the order of absolute confiscation. Accordingly, we answer the first question in favour of the Revenue. 15. In so far as the penalty imposed under Section 114(i) of the Customs Act is concerned, we find that the Original Authority imposed fine of ₹ 5.00 lakhs and the Tribunal has thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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