Redemption accepted under s.125; seized foreign currency released after payment despite ss.113(d), 113(e), 113(h) confiscation

High Court allowed the writ and directed release of the seized foreign currency on payment of the redemption fine and penalty imposed by the Appellate Commissioner within 30 days. The HC held confiscation under ss.113(d), 113(e) and 113(h) Customs Act, 1962 was legally available for undeclared export of foreign currency, but the Adjudicating Authority's discretion under s.125 to accept redemption in lieu of confiscation was properly exercised by the Appellate Commissioner, and that exercise of discretion would not be disturbed.

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Issues Involved:
1. Validity of the confiscation of foreign currency.
2. Appropriateness of the exercise of discretion under Section 125 of the Customs Act, 1962.
3. Compliance with relevant regulations and laws regarding the export of currency.

Summary:

Issue 1: Validity of the confiscation of foreign currency.
The petitioner sought to quash the Impugned Order dated 25.10.2021, which accepted the Revision Petition filed by the Principal Commissioner of Customs against an earlier order allowing redemption of seized foreign currency. The confiscation was ordered under Section 113(d), 113(e) & 113(h) of the Customs Act, 1962, read with the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015. The court noted that the foreign currency was seized while the petitioner was attempting to board a flight to Kuala Lumpur, Malaysia, without proper declaration, thus justifying the confiscation under the Customs Act.

Issue 2: Appropriateness of the exercise of discretion under Section 125 of the Customs Act, 1962.
Section 125 of the Customs Act, 1962, provides discretion to the Adjudicating Authority to impose a fine in lieu of confiscation. The Appellate Commissioner had allowed redemption of the currency on payment of a redemption fine of Rs. 4,00,000/- and reduced the penalty from Rs. 5,00,000/- to Rs. 3,25,000/-. The court referenced the Supreme Court's judgment in Union of India vs. Raj Grow Impex LLP, emphasizing that discretion must be exercised judiciously, especially when national economic interests are at stake. The court found that the Appellate Commissioner had properly exercised discretion and that the modification of the original order was justified.

Issue 3: Compliance with relevant regulations and laws regarding the export of currency.
The court examined various regulations under the Foreign Exchange Management Act, 1999, and the Customs Act, 1962, confirming that the export of foreign currency without proper declaration is prohibited. The court highlighted that the relevant regulations and notifications were in place to prevent illegal export and that the petitioner's actions were in violation of these laws.

Conclusion:
The court directed the release of the seized currency upon payment of the redemption fine and penalty imposed by the Commissioner of Customs (Appeals-I). The writ petition was allowed, with the petitioner required to comply within thirty days. No costs were awarded.

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