2014 (8) TMI 247 - AT - Customs

Confiscation of Indian Currency over Rs. 10,000 Upheld as Prohibited Goods

The Tribunal held that Indian currency exceeding Rs. 10,000 without RBI permission can be absolutely confiscated as prohibited goods. The appellant's ... Confiscation of currency - Redemption fine - attempt to export Indian currency outside India without permission of RBI - Whether the proper officer can confiscate absolutely the Indian currency which is found more than ₹ 10,000/- with a person who is going outside India or not - Held that:- In case a person attempted to export Indian currency outside India without permission of RBI more than ₹ 5,000/- or ₹ 10,000/- (as the case may be) in that case the Indian currency can be absolutely confiscated and it is discretion of the proper officer in the facts and circumstances of the case be allowed to redeem on payment of redemption fine and imposition of penalty - matter sent to referral banch. Issues:1. Whether absolute confiscation of Indian currency exceeding a certain limit without RBI permission is correct or can be redeemed by imposition of redemption fine and penaltyRs.Analysis:The judgment revolves around the issue of whether Indian currency exceeding a specified limit can be absolutely confiscated or redeemed by paying a fine and penalty. The appellant was found carrying Indian currency of Rs. 24,17,500 without RBI permission for export, leading to absolute confiscation and a penalty of Rs. 2,00,000. The Customs Act, 1962 allows for confiscation of goods prohibited under the Act or any other law, with an option to redeem on payment of fine. The Foreign Exchange Management Act, 1999 regulates the import and export of currency, with Regulation 3 allowing Rs. 10,000 per person without permission, and RBI granting permission for higher amounts. The appellant argued that RBI regulations do not imply prohibition, citing a Supreme Court case. The respondent contended that restrictions on currency amount to prohibition, supported by legal precedents.The Tribunal considered both arguments and analyzed the Foreign Exchange Management Act provisions. It highlighted that carrying Indian currency exceeding Rs. 10,000 without RBI permission is restricted, making it prohibited goods. Referring to a Supreme Court case, the Tribunal explained the difference between regulation and prohibition, emphasizing that restrictions inherently contain elements of both. The Tribunal rejected the appellant's argument, affirming that the confiscated currency was prohibited goods due to exceeding the permissible limit without RBI permission. The judgment clarified that the issue of redemption fine was not within its scope and referred it to the Referral Bench for further consideration.In conclusion, the Tribunal answered the reference by stating that Indian currency exceeding Rs. 10,000 without RBI permission can be absolutely confiscated, with the discretion to consider redemption on payment of fine and penalty based on the case's circumstances. The file was forwarded to the Referral Bench for additional deliberation on the redemption fine aspect.