2011 (8) TMI 579 - AT - Customs

Tribunal upholds confiscation of foreign currencies in Customs Act case

Sidhharth Shankar Roy & Others Versus Commissioner of Customs, Mumbai

The Tribunal upheld the confiscation of foreign currencies under Section 111(d) of the Customs Act, amounting to Indian Rs.44,27,500, seized from an ... Penalty - Confiscation of foreign currencies equivalent to Indian Rs.44,27,500/- under Section 111(d) and personal penalties imposed under Section 124 - Held That:- Department has established beyond reasonable doubt that the appellants colluded with each other in the Customs area for the prospective export of the foreign currency without any permission of the Reserve Bank of India.Thus appellant liable for penalty Section 114. Further role played by S.S. Roy by misusing his official position to the detriment of public interest is particularly deplorable.The man who knows the law shall not deteriorate with it. The quanta of penalties imposed on the appellants are not liable to be reduced. Issues Involved:1. Confiscation of foreign currencies under Section 111(d) of the Customs Act.2. Imposition of personal penalties under Section 112 of the Customs Act.3. Validity of self-incriminating statements and their retraction.4. Jurisdiction and binding nature of the Enforcement Directorate's (ED) order.5. Authenticity and evidentiary value of the sale note dated 7.1.1996.6. Evaluation of evidence and procedural propriety.Detailed Analysis:1. Confiscation of Foreign Currencies:The case involved the confiscation of foreign currencies equivalent to Indian Rs.44,27,500/- under Section 111(d) of the Customs Act. The foreign currencies were seized from an individual (Akhtar) at Sahar International Airport upon his arrival from Dubai. The Customs authorities believed that the currencies were acquired illegally and brought into the Customs area to obtain a Foreign Currency Declaration Form (CDF) fraudulently for subsequent export. The adjudicating authority ordered absolute confiscation of the currencies under Section 111(d) and imposed penalties under Section 112. The Tribunal upheld the confiscation under Section 113(d) of the Customs Act, noting that any breach of Section 13(2) of the FERA is deemed a breach of Section 11 of the Customs Act, thus justifying the confiscation.2. Imposition of Personal Penalties:Penalties were imposed on the appellants under Section 112 of the Customs Act. The Tribunal found that the appellants colluded in the Customs area for the prospective illegal export of foreign currency without RBI permission, rendering the currency liable to confiscation under Section 113(d). The Tribunal upheld the penalties, emphasizing the serious nature of the economic offense and the misuse of official position by one of the appellants (Roy).3. Validity of Self-Incriminating Statements and Retraction:The appellants retracted their self-incriminating statements given under Section 108 of the Customs Act, alleging coercion, threats, and assault by Customs officers. The Tribunal examined the retractions and found inconsistencies and lack of credible evidence to support the claims of coercion. Medical reports did not corroborate the allegations of assault by Customs officers. The Tribunal held that the statements were not validly retracted and had evidentiary value.4. Jurisdiction and Binding Nature of the ED's Order:The appellants argued that the Customs authorities were bound by the ED's order, which found the currencies legally acquired abroad. The Tribunal rejected this argument, stating that the ED's proceedings under the FERA and the Customs proceedings under the Customs Act operated in different fields and had mutually exclusive domains. The Customs authorities were not bound by the ED's order, and the Customs Department did not have the locus standi to appeal against the ED's order under Section 52 of the FERA.5. Authenticity and Evidentiary Value of the Sale Note:The appellants produced a sale note dated 7.1.1996 from a Dubai exchange to establish the legal acquisition of the foreign currencies. The Tribunal found no reliable evidence that the sale note was brought from abroad and produced before the Customs authorities. The sale note did not contain necessary identification particulars and was not mentioned in the seizure panchanama. The Tribunal held that the sale note was likely fabricated and had no evidentiary value.6. Evaluation of Evidence and Procedural Propriety:The Tribunal evaluated the evidence, including the statements of the appellants, the seizure panchanama, and the alleged sale note. It found that the appellants failed to discharge the burden of proof to establish the lawful acquisition and import of the foreign currencies. The Tribunal upheld the confiscation and penalties, emphasizing the need for deterrent punishment for economic offenses. The Tribunal also addressed the procedural propriety, noting that the non-mention of Section 113(d) in the show-cause notice or the impugned order did not invalidate the confiscation, as the cause of action was clearly brought out.