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TMI Blog2024 (7) TMI 1413X X X X Extracts X X X X X X X X Extracts X X X X ..... the Executive Chairman) and SEMPL are two distinct entities, and as recorded in the order passed by the Additional Commissioner of Customs, SEMPL was one of the independent, specialist third party service provider which provided certain services and raised invoices qua the same, which were duly paid by HMC. There existed no agent-principal or master-servant relation between SEMPL HMC, and all transactions between them were on arms-length basis, duly audited by the statutory auditors of HMC. Considering the aforesaid aspect as well as the categorical admission by the petitioner that he was unaware that Mr. Bali was carrying such foreign exchange and that he used to manage the personal expense from his own cards, it cannot be said that the said foreign exchange was being carried on his behalf. Thus, the conditions as regards being a beneficial owner have not been satisfied qua the petitioner in the present case. The petitioner not being the beneficial owner as well as the fact that the subject complaint has been filed based upon the same facts as have been conclusively determined by the learned CESTAT, this Court finds that the continuation of the subject complaint would be nothing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s levelled against him as also the factum that the seized currencies belonged to him. 4. At this stage, it is deemed apposite to extract the relevant contents of the show cause notice, which reads as under:- 56.1 Now, therefore, M/s Salt Experience and Management Private Limited (M/s SEMPL), Mr. Amit Bali, Mr. Hemant Dahiya, Mr. K. R. Raman and Mr. Pawan Kant Munjal, are hereby called upon to show cause to the Adjudicating Authority i.e. the Additional/ Joint Commissioner of Customs, Terminal-3, IGI Airport, New Delhi-110037, as to why: (i) the foreign currencies i.e. 50,409 USD, 30745 Euro and 25030 Pound Sterling, totally equivalent to Rs. 81,01 ,421 /- (Rs. Eighty One Lakh One Thousand Four Hundred and Twenty One only), as per the Notification No. 74/2018-Customs (NT) dated 16.08.2018, seized from Mr. Amit Bali on 20.08.2018 at IGI Airport, New Delhi should not be confiscated under Section 113 (d) of the Customs Act, 1962 for violations of the provisions of the Customs Act, 1962 read with provisions of Foreign Exchange Management Act (FEMA), 1999, Rules, Regulations and Instructions issued thereunder; (ii) The foreign currencies viz. 25780 Euros and 50,250 USD, totally equivalen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidually, as discussed supra, under the provisions of Section 114 (i) of the Customs Act, 1962. 5. In the adjudication proceedings, the competent authority i.e. the Additional Commissioner of Customs, New Delhi, after considering the show cause notice as well as the reply, vide order dated 19.11.2019 directed for dropping of proceedings against the petitioner. It was categorically observed that SEMPL was the owner of the foreign currency and that the respondent had failed to prove that the petitioner was the beneficial owner of the same, who was to enjoy its fruits. In appeal, the appellate authority however disagreed with the findings and while allowing the appeal vide its order dated 30.07.2021, held the petitioner to be the beneficial owner in terms of Section 2(3A), Customs Act and consequently, penalty was imposed upon him. 6. Aggrieved by the order passed in appeal, the petitioner filed a challenge before Customs, Excise Service Tax Appellate Tribunal (CESTAT), wherein vide order dated 28.03.2022, the order passed by the Commissioner of Customs (Appeals) was reversed and it was observed that the petitioner cannot be treated as a beneficial owner . Further, the said order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the petitioner having no effective control over the goods (i.e. foreign currency/exchange) is concerned, it has been fairly conceded that the petitioner did not have any such effective control over the currency. 10. Since both the parties have made reference to Clause 15.9.2 of the Customs Manual, to appreciate their contentions, this Court deems it apposite to reproduce the same. The aforesaid clause reads as under:- 15.9.2 Prosecution for withdrawal of Complaint already filed for prosecution A. In cases where the complaint has already been filed in the Court, it will be up to the Court to decide whether or not to pursue prosecution in terms of section 257 and 321 of Cr. P.C, 1973. If the order for withdrawal has been given by a Court, the prosecution can be withdrawn by the Assistant/Deputy Commissioner or Assistant/Deputy Director after getting a formal order from the Chief Commissioner/Principal CC or DGRI/Pr. DGRI as the case may be. B. As per decision of Hon ble Supreme Court in the case of Radhe Shyam Kejriwal [2011 (266) E.L.T. 294 (S.C.)]: (a) the findings in the adjudication proceeding in favour of the person facing trial for identical violation will depend upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i had stated that the seizes currency belonged to him (the appellant), to which he replied that he did not know as to why Amit Bali had made such a statement and reiterated that the seized foreign currency did not belong to him. 27. The aforesaid statements made under section 108 of the Customs Act give credence to the factual averments made by the appellant regarding the contractual arrangement between HMC and SEMPL and the fact that the foreign currency did not belong to the appellant and in fact belonged to SEMPL, which currency was in the possession of Amit Bali for meeting the expenses to be undertaken. It also transpires that SEMPL would raise invoices for such expenses together with its service charge and thereafter payments were made by HMC. The actual owner of the foreign currency having been identified, the concept of beneficial owner does not arise. The Commissioner (Appeals), therefore, was not justified in reversing the finding recorded by the Additional Commissioner that the concept of beneficial owner would not arise in the facts and circumstances of the case. 28. It further transpires that HMC had arranged SEMPL as the service provider for the event management outsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal refers to the currency being obtained from the stock as maintained by SEMPL and having been duly handed over by an employee of that entity to Mr. Amit Bali. While Mr. Ojha had sought to contend that in the past SEMPL employees are allegedly stated to have admitted to carrying currency which was utilized to meet the personal expenses of the respondent, the same is clearly immaterial since the proceedings emanating from the SCN in question stood restricted to the business travel of the respondent while acting as a Managing Director of HMC. xxx 15. As noted earlier, the SLP filed against the aforesaid order stands dismissed. 16. The refusal of the Supreme Court as well as by Division Bench of this Court to interfere in the order passed by the CESTAT was after due consideration of the facts. A plain reading of the order passed by CESTAT leads to an irresistible conclusion that the decision by CESTAT, thereby exonerating the petitioner, is not on technical grounds but a conclusion based upon merits. The entire proceedings, as iterated above, clearly show that the aforesaid adjudication had attained finality, and it had been determined that the petitioner was not the beneficial owne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re that Mr. Bali was carrying such foreign exchange and that he used to manage the personal expense from his own cards, it cannot be said that the said foreign exchange was being carried on his behalf. Thus, the conditions as regards being a beneficial owner have not been satisfied qua the petitioner in the present case. This factum has been succinctly discussed by the Additional Commissioner of Customs in his order, whereby the petitioner was made not liable and which order has since travelled upto the Supreme Court and the decision by the Additional Commissioner has been upheld. 18. Considering the factual situation expressed above as regards the petitioner not being the beneficial owner as well as the fact that the subject complaint has been filed based upon the same facts as have been conclusively determined by the learned CESTAT, this Court finds that the continuation of the subject complaint would be nothing but an abuse of the process of law. 19. Consequently, the petition is allowed and the complaint case being Ct. Case No. 2012/2022 is quashed. As a necessary sequitur, the summoning order dated 01.07.2023 is set aside. The petition alongwith pending application is disposed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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