2023 (8) TMI 622 - AT - Customs

Tribunal Modifies Order: Allows Limited Currency Redemption, Confiscates Excess; Upholds Fine for Smuggling Attempt.

The Tribunal modified the order by allowing redemption of foreign currency up to US$ 5,000 on payment of the fine, while the remaining currency was ... Absolute confiscation or option of redemption against the redemption fine to be provided - Smuggling - import of Foreign Currencies from Nepal - N/N. 09/1996-Cus (NT) dated 22.01.1996 - HELD THAT:- From the perusal of the above it is quite evident that the above notification in general prohibits the importation through Nepal, the goods of third country origin. Foreign Exchange management Act, 1999 (FEMA) is “An Act to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.” - there are no merits in the findings recorded by the Commissioner (Appeals) as the possession of foreign currency in India is governed by the provision of the FEMA and the RBI Circulars issued from time to time. Original Authority has referred to the RBI Circular No.45/2015-16[(1)/6(R)] dated 04.02.2016 provides the permissible limit for import of foreign exchange into India and the on the basis of that he has concluded that seized foreign currency is liable for confiscation but needs to be given an option for redemption. The Regulation 6 and RBI Circular do permit the importation of the Foreign Currency, the said importation is subject to restrictions to the extent that the appellant was required to make declaration of the Currency which he carries if the same is in excess of US$ 5000/- or equivalent. Appellant has failed to make any such declaration, and hence these currencies have been imported in contravention of the provisions of Regulation 6 read with RBI Circular and have to be held confiscable under Section 111 (d) holding the same to be prohibited - in respect of the currency which is above the value of US $ 5,000/- or equivalent needs to be confiscated by the Authorities. As importation of such currencies has been made without any declaration to the Customs or any authority the same will be prohibited and would be liable for absolute confiscation under section 111(d) of Customs Act. The currencies which are in total violation of the RBI Circular should be absolutely confiscated whereas which falls within the permissible limits as per the RBI Circular be allowed on payment of redemption fine. Appellant have already paid redemption fine of Rs.1.5 lakhs. Accordingly, the foreign currency up to the total value of US $ 5,000 allowed to be redeemed to the appellant against the above redemption fine. The remaining seized foreign currency is ordered to be absolutely confiscated. There is no serious challenge by either side to the quantum of penalty imposed on the appellant for his act of omission and commission leading to confiscation of foreign currency. Though the penalty imposed by the original authority to be low - appeal allowed in part. Issues Involved:1. Confiscation of foreign currency imported from Nepal.2. Confiscation of the vehicle used in the transportation of foreign currency.3. Imposition of penalty on the appellant.4. Redemption of confiscated foreign currency.Summary:1. Confiscation of Foreign Currency:The appellant was intercepted near the India-Nepal border and found in possession of foreign currencies (5825 Yuan, 10,600 US Dollar, 3495 Dirham, 2100 Euro) which were seized by the authorities. The appellant admitted to importing these currencies from Nepal without proper documentation. The Additional Commissioner Customs held that the seized foreign currencies, valued at Rs.10,38,380/-, were liable for confiscation under section 111 of the Customs Act, 1962, but allowed redemption on payment of a fine. The Commissioner (Appeals) overturned this decision, ordering absolute confiscation as per Notification No.9/96-Cus(NT) which prohibits import of third country goods from Nepal.2. Confiscation of Vehicle:The vehicle used for transporting the seized currency, a TVS motorcycle, was also confiscated under Section 115 of the Customs Act, 1962. The Additional Commissioner Customs allowed redemption of the vehicle on payment of a fine of Rs.3,000/-.3. Imposition of Penalty:A penalty of Rs.30,000/- was imposed on the appellant under Section 112 (b) of the Customs Act, 1962 for smuggling the foreign currencies from Nepal into India.4. Redemption of Confiscated Foreign Currency:The appellant's grievance was against the absolute confiscation order by the Commissioner (Appeals), arguing for redemption on payment of a fine. The Tribunal noted that the importation of foreign currency is governed by FEMA and RBI Circulars, which allow importation up to US$ 5,000 or its equivalent without declaration. The Tribunal held that currency beyond this limit, imported without declaration, is liable for absolute confiscation. Thus, foreign currency up to US$ 5,000 was allowed for redemption against the already paid fine of Rs.1.5 lakhs, while the remaining currency was ordered to be absolutely confiscated.Conclusion:The Tribunal partially modified the impugned order, allowing redemption of foreign currency up to US$ 5,000 on payment of the fine and ordering absolute confiscation of the remaining currency. The penalty imposed on the appellant remained unchanged.