2017 (1) TMI 211 - AT - Customs

Tribunal Upheld Penalties for Illegal Currency Export, Courier Company Penalty Reduced

Shri Sushil Kumar Jugal Ginoria, M/s Aramex India Pvt. Ltd. Versus Commissioner of Customs (Airport), Mumbai

The Tribunal upheld the penalty imposed on the sub-agent for the illegal export of Indian currency. The penalty on the courier company was partially ... Export of Indian currency by courier - smuggling- imposition of penalty u/s 114(i) of the Customs Act, 1962 - due diligence to be exercised by courier company - Held that: - there was no act of omission or commission on part of the appellant in alleged smuggling of Indian currency. They did not have the knowledge of the currency hidden in the consignments - I find that the show-cause notice alleges that the export of such currency has been done on numerous occasions and even Customs have failed to detect the same. The currency has been hidden well in the takas of fabrics. In these circumstances, it may be difficult to detect the currency - However, the fact remains that there was a failure on part of M/s Aramex India Pvt. Ltd. - the penalty imposed of ₹ 2 lakhs on appellant is higher side and the same is reduced to ₹ 50,000/- only - appeal disposed off - decided partly in favor of appellant-courier company. Issues Involved:1. Imposition of penalty on the courier company and its sub-agent for the export of Indian currency.2. Legality of the statements obtained from the appellants.3. Application of Section 6(3)(g) of FEMA, 1999.4. Alleged violation of Section 113(b) and (h) of the Customs Act, 1962.5. Due diligence under regulation 13(c) of the Courier Import and Export (Clearance) Regulations, 1998.Issue-wise Detailed Analysis:1. Imposition of Penalty on the Courier Company and Sub-Agent:The appeals were filed against the imposition of penalties under Section 114(i) of the Customs Act, 1962, due to the export of Indian currency by courier. The appellants contended that the currency was intended for domestic transfer but was erroneously forwarded for international export. The Tribunal found that the appellants' defenses were the same as those presented before the original adjudicating authority and had been adequately addressed and dismissed by the Commissioner. The Commissioner’s findings indicated that the appellants were involved in the illegal export of Indian currency, as evidenced by the detailed investigation and corroborated statements.2. Legality of the Statements Obtained from the Appellants:The sub-agent argued that the statements obtained from their employees were forcibly taken and identical, suggesting they were dictated. However, the Commissioner noted that the statements were voluntary and not coerced, as the appellant had made material changes and admissions in subsequent statements. The Tribunal upheld the Commissioner’s observation that the statements were corroborated by other evidence and witnesses, including the appellant’s brother and employees.3. Application of Section 6(3)(g) of FEMA, 1999:The appellant argued that Section 6(3)(g) of FEMA, 1999, was wrongly invoked, asserting that sending Indian currency not exceeding Rs. 5,000/- was not prohibited. The Tribunal found that the Commissioner had adequately addressed this argument, noting that the currency was concealed and intended for illegal export, which justified the invocation of the relevant sections of the Customs Act.4. Alleged Violation of Section 113(b) and (h) of the Customs Act, 1962:The appellant contended that Section 113(b) and (h) could not be invoked as the currency was not prohibited for exportation. The Tribunal upheld the Commissioner’s finding that the concealment of currency indicated an intention to illegally export it, thus justifying the application of these sections. The Commissioner’s detailed analysis and rejection of the appellant’s defense were found to be reasonable and supported by evidence.5. Due Diligence under Regulation 13(c) of the Courier Import and Export (Clearance) Regulations, 1998:The courier company argued that they had no knowledge of the currency hidden in the consignments and had not violated any regulations. The Tribunal noted that the Commissioner relied on regulation 13(c), which requires due diligence by courier companies. Although the currency was well-concealed, the Tribunal found a failure in due diligence on the courier company’s part. However, considering the circumstances, the Tribunal reduced the penalty from Rs. 2 lakhs to Rs. 50,000/-.Conclusion:The Tribunal dismissed the appeal of the sub-agent, upholding the penalty imposed by the Commissioner. The appeal of the courier company was partially allowed, with the penalty reduced to Rs. 50,000/-. The Tribunal found that the Commissioner had adequately addressed all defenses raised by the appellants and that the penalties were justified based on the evidence and legal provisions.