Seized currency release cannot be burdened with a customs direction to trigger income tax action beyond jurisdiction.

When customs proceedings are dropped and seized Indian currency is ordered to be released, the currency must be returned to the person entitled to it under Section 110 of the Customs Act. A customs authority cannot, in those proceedings, impose an ancillary direction requiring intimation to the Income Tax Department for possible action, as that lies beyond the scope of the customs adjudication. The direction to inform the Income Tax Department was therefore set aside, while the release of the currency and setting aside of the adjudication order were otherwise maintained.

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Issues: Whether, after setting aside the adjudication order and directing release of seized Indian currency, the customs authority could also direct the adjudicating authority to inform the Income Tax Department for appropriate action.

Analysis: The currency had been seized by the customs authorities and the proceedings against the person concerned had been dropped. In such circumstances, the seized currency was required to be returned to the person entitled to it under Section 110 of the Customs Act. The direction to alert the Income Tax Department for possible action in relation to the same currency was held to be unwarranted and beyond jurisdiction in the context of the customs proceedings.

Conclusion: The direction requiring intimation to the Income Tax Department was set aside. The release of the Indian currency and the setting aside of the adjudication order were otherwise upheld, resulting in relief for the appellant on the challenged observation.

Final Conclusion: The customs proceedings were concluded in favour of release of the seized currency, but the ancillary direction for possible Income Tax action did not survive.

Ratio Decidendi: Once customs proceedings are dropped and seized currency is ordered to be released, the customs authorities must return it to the person entitled to it and cannot impose an unwarranted direction for subsequent Income Tax action in those proceedings.

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