Tribunal orders confiscation of USD 70,000, fines upheld, penalties dropped for lack of evidence

The Tribunal held that the foreign currency amounting to USD 70,000 seized from Shri Pankaj Jhunjhunwala is liable for confiscation under relevant sections of the Customs Act, 1962 and FEMA, 1999. The majority decision allowed redemption of the currency upon payment of a fine of Rs. 5,00,000. Penalties of Rs. 4,00,000 imposed on Shri Pankaj Jhunjhunwala were upheld, while penalties on Shri Satish Choudhary and Shri Om Prakash Jhunjhunwala were dropped due to lack of evidence. Confiscations of certain foreign currencies were set aside, and adjustments against penalties were rejected.

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Issues Involved:
1. Confiscation of foreign currency (USD 70,000) seized from Shri Pankaj Jhunjhunwala.
2. Imposition of penalties on Shri Pankaj Jhunjhunwala, Shri Satish Choudhary, and Shri Om Prakash Jhunjhunwala.
3. Confiscation of foreign currency allegedly smuggled on previous visits by Shri Pankaj Jhunjhunwala.
4. Confiscation of various foreign currencies seized from M/s Monalisa Forex Services Pvt. Ltd. and the residence of Shri Pankaj Jhunjhunwala.
5. Adjustment of seized foreign currency against penalties.

Detailed Analysis:

1. Confiscation of Foreign Currency (USD 70,000) Seized from Shri Pankaj Jhunjhunwala:
The Tribunal held that the foreign currency amounting to USD 70,000 seized from Shri Pankaj Jhunjhunwala is liable for confiscation under Section 113(d), (e), and (h) of the Customs Act, 1962, read with Section 6(3)(g) of FEMA, 1999. The majority opinion, however, diverged on whether the confiscation should be absolute or if redemption should be allowed. The Member (Judicial) allowed redemption on payment of a fine of Rs. 5,00,000, while the Member (Technical) argued for absolute confiscation. The Third Member concurred with the Member (Judicial), allowing redemption on payment of the fine.

2. Imposition of Penalties:
- Shri Pankaj Jhunjhunwala: A penalty of Rs. 4,00,000 was imposed under Section 114(i) of the Customs Act, 1962, for the attempted smuggling of USD 70,000.
- Shri Satish Choudhary: The penalties imposed were dropped. The Tribunal found that the inculpatory statement made by Shri Pankaj Jhunjhunwala, which implicated Shri Satish Choudhary, was retracted within 24 hours and lacked corroborative evidence. The Third Member agreed with this view, emphasizing the lack of material evidence against Shri Satish Choudhary.
- Shri Om Prakash Jhunjhunwala: Penalties imposed were also dropped due to insufficient evidence linking him to the smuggling activities.

3. Confiscation of Foreign Currency Allegedly Smuggled on Previous Visits:
The Tribunal set aside the confiscation of USD 3,50,000 allegedly smuggled out by Shri Pankaj Jhunjhunwala on previous visits. The decision was based on the absence of corroborative evidence to substantiate the claim that he smuggled this amount on earlier occasions.

4. Confiscation of Various Foreign Currencies Seized from M/s Monalisa Forex Services Pvt. Ltd. and the Residence of Shri Pankaj Jhunjhunwala:
- The foreign currencies seized from M/s Monalisa Forex Services Pvt. Ltd. were not held liable for confiscation. The Tribunal directed their release.
- Similarly, the foreign currencies seized from the residence of Shri Pankaj Jhunjhunwala were ordered to be released.

5. Adjustment of Seized Foreign Currency Against Penalties:
The Tribunal found that the adjustment of the foreign currency seized from M/s Monalisa Forex Services Pvt. Ltd. against the penalties imposed on Shri Satish Choudhary and Shri Om Prakash Jhunjhunwala was not sustainable and set aside this adjustment.

Majority Order:
- The foreign currency of USD 70,000 is liable for confiscation but can be redeemed on payment of a redemption fine of Rs. 5,00,000.
- A penalty of Rs. 4,00,000 is imposed on Shri Pankaj Kishore Jhunjhunwala under Section 114(i) of the Customs Act, 1962.
- No penalties are imposed on Shri Satish Choudhary and Shri Om Prakash Jhunjhunwala.
- The foreign currency seized from M/s Monalisa Forex Services Pvt. Ltd. is to be released within seven days of the receipt of the order.

Separate Judgments:
- Member (Technical): Argued for absolute confiscation of USD 70,000 and imposition of penalties on Shri Satish Choudhary.
- Third Member: Concurred with Member (Judicial) on allowing redemption of USD 70,000 on payment of a fine and dropping penalties on Shri Satish Choudhary.

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