2024 (2) TMI 980 - HC - Customs

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

Rayavarapu Sri Devi Versus The Principal Commissioner of Customs (Adjudciation-Air), The Joint Commissioner of Customs (Adjudciation-Air), The Principal Commissioner (RA) & Ex-Officio Additional Secretary to the Government of India, Mumbai

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 ... Confiscation of the currency seized - validity of order for release on payment of redemption fine - whether the confiscation of foreign currency valued at Rs.46,44,120/- (676 US $) carried by the petitioner in person which was seized and ordered to be confiscated is justified or not under the provisions of the Customs Act, 1962 - confiscation ordered u/s 113(d), 113(e) & 113(h) of the Customs Act, 1962 read with the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015 - HELD THAT:- There are no notifications issued u/s 11-I of the Customs Act, 1962. Under Section 113(d) of the Customs Act, 1962 any goods attempted to be exported or brought within the limits of any customs area for the purpose of being exported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force shall be liable for confiscation. Foreign Trade (Development and Regulation) Act, 1992 r/w Foreign Trade (Regulation) Rules, 1993 read with The Foreign Trade Policy 2015-2020 and the provisions of the Foreign Exchange Management Act, 1999 read with The Foreign Exchange Management (Export and Import of Currency) Regulations, 2015 thus contain restriction on import and export of foreign currency. Section 125 of the Customs Act, 1962 gives a discretion to the Adjudicating Authority to impose fine in lieu of confiscation. There is no doubt that the currency that was attempted to be exported out of country without proper declaration by the petitioner was liable for the confiscation under the provisions of the Customs Act, 1962 and the provisions of the regulations mentioned above framed under the provisions of the Foreign Exchange Management Act, 1999. Therefore, without doubt, it is clear that import or export of foreign currency is prohibited if it is in contradiction of the above Regulation. Thus, discretion is to be exercised by the Adjudicating Officer u/s 125 of the Customs Act, 1962, to allow redemption of prohibited goods of payment of redemption fine. The Appellate Commissioner has modified by giving an option to the petitioner to pay redemption fine and has reduced the penalty. Although the Central Government is empowered to file revision to modify any order of the Appellate Commissioner, I find the discretion was properly exercised while modifying Order-in-Original No.61/2020-2021-Commissionerate-1 by the Appellate Commissioner vide Order-in-Appeal Airport. Cus.I No.206 of 2020(F.No.C4/I/99/O/2020-AIR) while ordering reduced penalty and release of the currency on payment of redemption fine. Unless the discretion was wrongly executed by the Appellate Commissioner, while passing Order dated Order-in Appeal Airport. Cus.I No.206 of 2020(F.No.C4/I/99/O/2020-AIR), such exercise of discretion cannot be disturbed u/s 129DD of the Customs Act, 1962. Therefore, the seized currency ordered to be confiscated under the provisions of the Customs Act, 1962 in view of Section 113(d), 113(e) & 113(h) of the Customs Act, 1962 is directed to be released subject to the petitioner paying the redemption fine and penalty imposed by the Commissioner of Customs (Appeals-I) vide Order dated Order-in Appeal Airport. Cus.I No.206 of 2020(F.No.C4/I/99/O/2020-AIR) dated 20.08.2020 within a period of thirty (30) days from the date of receipt of a copy of this order. In the result, this writ petition stands allowed with the above observation. 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.