AI Drafter 
TaxTMI 
TaxTMI 
2016 (5) TMI 740
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....k briefcase. On suspicion, the Custom Officers searched the baggage and found the suitcase to be containing US $ 289,250 while the brief case contained US $ 114,300. The currency was seized and Ajit Dodia was questioned. He disclosed that he was to accompany Jatin Jhaveri, a diamond trader, that his brother Jitendra Dodia was working with Jatin Jhaveri as a sorter, that his trip was finalized and arranged by Jatin Jhaveri who had driven him to the Airport. In his statement Jitendra Dodia confirmed that he was working with Jatin Jhaveri and that he and Jatin Jhaveri had packed US dollars in bundles in the evening. However Jatin Jhaveri was not available for next two months i.e. till 27.09.1993. B. In his statement dated 12.10.1993, Jatin Jhaveri confirmed that he was to accompany Ajit Dodia to Hongkong on the relevant date and that he had handed over his suitcase to Ajit Dodia who in turn was to hand it over to the brother of Jatin Jhaveri at Hongkong. He however denied ownership of the currency in question and also stated that he had nothing to do with the briefcase. He repeated in writing to stress the point saying "It does not belong to me". This incident led to initiation of ....
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....estioned in the statement on 12.10.93 and he had made a statement claiming that the seized foreign currency, did not belong to him. Thus, he had disowned the currency seized from the baggage of Shri Ajit Dodia. Further no plausible explanation or reason has been offered by him as to what prevented him from going abroad on 27th /28th July 1993. Had these currency been legally brought into India, Shri Jatin Jhaveri would have perhaps himself checked the baggage through Customs, but the fact that he left to be checked and cleared through Customs by Shri Ajit Dodia itself indicate that he did not have any honest design of flying abroad on that night and that he did not have any legal documents for possession of these currency". In the premises, he ordered confiscation of foreign currency of US $ 403,550 (US $ 289,250 recovered from the suitcase and US $ 143,300 from the Brief case). He also imposed penalty of Rs. 10 Lacs on Jatin Jhaveri and of Rs. 3 lacs on Ajit Dodia and of Rs. 2 lacs on Jitendra Dodia. E. A Show Cause Notice dated 21.11.1997 was thereafter issued by Directorate of Enforcement, Mumbai for contravention of provisions of Section 8(1) read with 64(2) of Foreign Ex....
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....irport along with Ajit Dodia. As regards genuineness of the Currency Declaration Forms, he relied upon the observations made by Commissioner of Customs, Mumbai in adjudication order dated 30.08.1995 as quoted above. The Special Director concluded as under:- "From the evidence discussed above, only irresistible conclusion forthcoming is that the entire foreign exchange of US $ 403, 550 seized from Shri Ajit Dodia by the Air Customs, Mumbai was in fact illegally acquired by the said Shri Jatin Jhaveri, as indicated in the impugned SCN and then transferred to Shri Ajit K. Dodia for its onward transfer to his (Shri Jatin's) brother in Hongkong. Similarly, the notice, Shri Ajit Dodia has in fact otherwise acquired the said foreign exchange of US $ 403,550 from Shri Jatin Jhaveri, a person other than an Authorised Dealer in Foreign exchange in India, which was later on seized by the Air Customs Officers from Shri Ajit Dodia on 28.07.1993 under the panchanama. It is equally abundantly crystal clear that Shri Jitendra Dodia has in fact aided and abetted said Shri Jatin Jhaveri in transferring and his brother Shri Ajit K. Dodia in acquiring the aforesaid foreign exchange of US $ 40....
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....nted by Director of Enforcement in the High Court of Bombay. Writ Petition No.2976 of 2004 was also preferred by Jatin Jhaveri in the High Court contending that he was entitled to the release of US $ 289,250 along with interest @ 18%. The High Court affirmed the view taken by the Appellate Tribunal and dismissed FERA Appeal No.64-66 of 2006 by its judgment and order dated 19.10.2010. It was observed that the order of CEGAT having attained finality, that order had definite bearing on the controversy in question and though the findings recorded in the Customs proceedings may not be binding on FERA proceedings, it was not possible for the High Court to take a different view in the matter. By the same judgment the High Court allowed Writ Petition No.2976 of 2004 holding that Jatin Jhaveri was entitled to the currency amounting to US $ 289,250 but would not be entitled to any interest thereon. 3. Jatin Jhaveri, being aggrieved in so far as rejection of prayer for grant of interest was concerned, preferred SLP (C) No.5788 of 2011. On the other hand, Union of India preferred SLP (C) Nos.26671-26674 of 2011 challenging the dismissal of FERA Appeal Nos.64-66 of 2006. Special Leave to App....
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....ought 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; (e) any goods found concealed in a package which is brought within the limits of a customs area for the purpose of exportation; ...... (i) any goods entered for exportation which do not correspond in respect of value or in any material particular with the entry made under this Act or in the case of baggage with the declaration made under Section 77;" Section 8(1) of FERA is as under: "8. (1) Except with the previous general or special permission of the Reserve Bank, no person other than an authorised dealer shall in India, and no person resident in India other than an authorised dealer shall outside India, purchase or otherwise acquire or borrow from, or sell, or otherwise transfer or lend to or exchange with, any person not being an authorised dealer, any foreign exchange: Provided that nothing in this sub-section shall apply to any purchase or sale of foreign currency effected in India between any person and a money-changer. 6. The emphasis in the releva....