2009 (4) TMI 687 - AT - Customs

Tribunal reduces fine & penalty for currency confiscation, stresses regulatory compliance

The Appellate Tribunal CESTAT, CHENNAI rejected the Revenue's application for a stay of the Commissioner's order imposing a fine and penalty for ... Confiscation and penalty - Illegal export of Indian currency - Held that: - Since the violation by the respondent passenger is procedural in nature, the prayer of the revenue for enhancement of the fine and penalty is rejected as no ground for enhancement has been made out - The prayer of the respondents in the cross-objection for reduction of the quantum of both fine and penalty finds favour with us, as it was only a procedural lapse on the part of the respondent not to have obtained a valid Reserve Bank of India permit to take Indian Currency outside India. Issues:1. Application for stay of operation of the order of the Commissioner regarding fine and penalty.2. Confiscation of Indian Currency without a valid permit.3. Imposition of fine and penalty for procedural violation.4. Appeal and cross-objection for disposal.Analysis:1. The application for stay of operation of the order of the Commissioner, involving a fine and penalty, was rejected by the Appellate Tribunal CESTAT, CHENNAI. The Commissioner had determined a specific quantum of fine in lieu of confiscation of Indian Currency amounting to Rs. 50,00,000/-, and penalty. The Revenue sought enhancement of the fine and penalty. However, the Tribunal found that the Commissioner had provided reasons for the quantum of both amounts. Consequently, the Tribunal held that no prima facie case had been made out by the Revenue to exercise the inherent power of stay. Thus, the application for stay was rejected.2. The Commissioner had confiscated Rs. 50 lakhs Indian Currency from the respondent, who was a Haj pilgrim, for attempting to take it outside India without a valid permit from the Reserve Bank of India. Additionally, a fine of Rs. 10 lakhs and a penalty of Rs. Three lakhs were imposed. The Tribunal noted that the violation by the respondent was procedural in nature. The Revenue had sought enhancement of the fine and penalty, but the Tribunal rejected this request as no grounds for enhancement were established. The respondent's cross-objection for reduction of the fine and penalty was, however, considered favorably by the Tribunal. Acknowledging the procedural lapse of not obtaining a valid permit, the Tribunal upheld the confiscation but reduced the fine to Rs. Five lakhs and the penalty to Rs. 1.50 lakhs. The Tribunal did not grant the respondent's prayer to set aside the entire fine and penalty. Consequently, the Revenue's appeal was rejected, and the cross-objection was partly allowed.3. The Tribunal proceeded to dispose of the appeal and cross-objection since both parties agreed that the appeal itself could be resolved as the issue was relatively minor. The Tribunal emphasized that the violation related to procedural lapses concerning the Reserve Bank of India permit for taking Indian Currency outside India. While upholding the confiscation, the Tribunal adjusted the fine and penalty amounts based on the nature of the violation and the arguments presented by both sides. The Tribunal's decision aimed to strike a balance between enforcing compliance with regulations and considering the circumstances of the case.In conclusion, the Tribunal's judgment addressed the issues of stay application, confiscation of currency without a valid permit, imposition of fines and penalties for procedural violations, and the final disposal of the appeal and cross-objection, ensuring a fair and reasoned decision based on the facts and legal arguments presented before it.