Undeclared foreign currency and redemption of restricted goods: absolute confiscation upheld, but jewellery allowed release on redemption fine.
Undeclared foreign currency attempted to be taken out of India by a non-resident traveller was treated as liable to absolute confiscation because no lawful declaration was shown and the attempt was viewed as smuggling. Gold jewellery, being restricted but not prohibited goods, remained confiscable but had to be released on redemption fine under the confiscation law, and the same redemption treatment was extended to hair clips used in concealment. The personal penalty was sustained because the finding of attempted unlawful export was not disturbed. The confiscation of the currency and penalty were affirmed, while the matter was remitted only for fixation of redemption fine on the jewellery and hair clips.
Issues: (i) whether the absolute confiscation of undeclared foreign currency was justified; (ii) whether gold jewellery and hair clips, though confiscable, were liable to be redeemed on payment of fine; and (iii) whether the personal penalty was liable to be sustained.
Issue (i): whether the absolute confiscation of undeclared foreign currency was justified.
Analysis: The currency was not declared to the customs authorities. The person concerned was a non-resident traveller, and the record did not show the declaration required for lawful export. In these circumstances, the currency was treated as attempted to be smuggled out of the country and the plea against absolute confiscation was not accepted.
Conclusion: The absolute confiscation of the foreign currency was upheld, in favour of Revenue.
Issue (ii): whether gold jewellery and hair clips, though confiscable, were liable to be redeemed on payment of fine.
Analysis: The gold jewellery was treated as restricted, not prohibited, goods. While confiscation was upheld, the governing confiscation provision required an option of redemption for non-prohibited goods. The hair clips, being ancillary goods used in concealment, were also directed to be dealt with on the same footing for redemption.
Conclusion: Redemption of the gold jewellery and hair clips was directed on payment of fine to be fixed by the Commissioner after hearing the appellant, in favour of the Assessee.
Issue (iii): whether the personal penalty was liable to be sustained.
Analysis: The penalty was not seriously contested and the finding of attempted unlawful export remained undisturbed.
Conclusion: The personal penalty was sustained, in favour of Revenue.
Final Conclusion: The confiscation of the foreign currency and the penalty were affirmed, while the confiscation of the gold jewellery and hair clips was modified to permit redemption on terms to be fixed afresh, with the matter remitted only for quantification of redemption fine.
Ratio Decidendi: Undeclared foreign currency attempted to be taken out of India by a non-resident traveller may be absolutely confiscated, whereas confiscation of restricted but non-prohibited goods must ordinarily be coupled with an opportunity of redemption under the confiscation law.
TaxTMI 
AI Drafter ✕
TaxTMI 
