2014 (6) TMI 21 - AT - Customs

Tribunal reduces smuggling penalties, emphasizes knowledge of regulations, and imposes redemption fines based on roles.

Mr. Bheemappa Thyagarajan and others Versus CC, Bangalore

Mr. Bheemappa Thyagarajan and others Versus CC, Bangalore - TMI Issues:1. Smuggling of foreign currency by passengers at Bangalore International Airport.2. Allegations of obtaining foreign currency from grey market.3. Legitimacy of penalties imposed on the appellants.4. Consideration of redemption fines for confiscated foreign and Indian currency.Issue 1: The case involved the interception of four passengers suspected of smuggling foreign currency at Bangalore International Airport. The Directorate of Revenue Intelligence (DRI) received specific intelligence leading to the interception of the passengers, who were found with significant amounts of undeclared foreign currency. The passengers initially denied carrying foreign currency but later admitted to receiving it from a fifth appellant, Shri K.G. Venkatesh, who had obtained the currency from the grey market.Issue 2: The appellants argued that they were misled by friends and obtained foreign currency from the grey market due to the unavailability of legitimate sources during holidays. They contended that they were first-time travelers and sought leniency in penalties. The defense also raised concerns about the circular requiring endorsements on passports for foreign exchange transactions, claiming it did not apply to their business trip. However, the tribunal found that the appellants were aware of the possibility of endorsements, indicating their knowledge of the requirement.Issue 3: The tribunal considered the arguments from both sides regarding the penalties imposed on the appellants. The defense emphasized the appellants' lack of experience in foreign travel and their intention to purchase machinery for their businesses. The prosecution contended that the foreign currency was obtained to under-value imported goods. The tribunal acknowledged the circumstances of the case, including the appellants' genuine business purpose and lack of prior smuggling activities, leading to a reduction in penalties based on precedents and the ends of justice.Issue 4: In determining the redemption fines for confiscated foreign and Indian currency, the tribunal differentiated the penalties based on individual appellants' roles and prior involvement in similar activities. Redemption fines ranging from 15% to 30% were imposed based on the specific circumstances of each appellant. The tribunal also reduced the original penalties imposed on the appellants to meet the ends of justice, considering the mitigating factors presented during the proceedings.The judgment concluded with the disposal of the appeals based on the revised penalties and redemption fines determined by the tribunal, ensuring a balanced approach considering the unique circumstances of the case.