TaxTMI 
TaxTMI 
2016 (9) TMI 415
X X X X Extracts X X X X
X X X X Extracts X X X X
....p; 1000 Hong Kong Dollars - 6000 Collectively equivalent to Indian Rs. 38,00,671/-. On enquiry from the appellant, he initially stated that the currencies belonging to Mr. Dinesh Manohar Pahuja and Mr. Manohar Shyamlal Pahuja, resident at China, however later on took 'U' turn and stated that the currencies belonged to one businessman in Singapore namely Shri Khushaldas Belani who gave to the appellant for buying properties while coming to India from his last visit. However since the deal was not through the said currencies being taken back to give to Shri Belani. He produced receipt of purchase of said foreign currencies in the name of Shri Belani from money exchanger M/s. Anneshah Trading, Singapore. On enquiry through DRI through high Commission of India, Singapore, Shri Basher Ahmed Proprietor of M/s. Anneshah Trading confirmed that receipt No. A-5006 was not issued by him. It appeared that sale invoice of foreign currencies submitted by the appellant was found forged. Show cause notice No. SD/INT/AIU/10/2007 AP 'C' dated 20.09.2007 was issued to the appellant proposing confiscation of seized currenci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....context. These observations must be read in the context in which they appear to have been stated......." Moreover, Section 2, which contains definitions, begins with the following - "2. Definitions. - In this Act, unless the context otherwise requires" Thus, the definition of 'prohibited goods', whether would apply in the context of section 125, required examination, dehors its applicability in the context of section 111 or 113, which was not done in the impugned order. 2. In UOI vs. Asian Food Industries, - 2006 (204) ELT 8 (SC), the Hon'ble Supreme Court was pleased to hold that - "43. The expression "regulate" and "prohibit" inhere in them elements of restriction but it varies in degree ..... " "46. The terms, however, indisputably would be construed having been used Section 3(2) of the 1992 Act uses prohibition, restriction and regulation. They are, thus, meant to be applied differently. Section 51 of the 1962 Act also speaks of prohibition. Thus, in terms of the 1992 Act as also the policy and the procedure laid down thereunder, the terms are required to be applied in different sit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....;. b. In Ramesh Mehta vs Sanwal Chand Singhvi, (2004) 5 SCC 409 it was noticed: (SCC p. 426, paras 27-28)- "27. A definition is not to be read in isolation. It must be read in the context of phrase which would define it. It should not be vague or ambiguous. The definition of words must be given a meaningful application; where the context makes the definition given in the interpretation clause inapplicable, the same meaning cannot be assigned'. c. In State of Maharashtra vs Indian Medical Assn., (2002) 1 SCC 589 it was observed that the definition given in the interpretation clause having regard to the contents would not be applicable. It was stated : (SCC p. 598, para 8) - "8. A bare perusal of Section 2 of the Act shows that it starts with the words 'in this Act, unless the context otherwise requires ... ' Let us find out whether in the context of the provisions of Section 64 the Aft the defined meaning of the expression 'management' can be assigned to the word 'management' in Section 64 of the Act. In para 3 of the Regulation, the Essentiality Certificate is required to be given by the State Government and p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onsidered therein. 7. After considering the above precedents, in the matter of Noor Moiddin Bapa, the Commissioner (Appeals) was pleased to uphold the above proposition and had set aside absolute confiscation. The order of Commissioner (Appeals) was accepted by Revenue without any challenge thereto. The Central Government thereafter modified the order of Commissioner (Appeals) and was pleased to reduce the fine and penalty imposed by the Commissioner (Appeals). 8. In this context, it is relevant to point to Judgment of Hon'ble Andhra Pradesh High Court in Shaik Jamal Basha vs. GOI, 1997 (91 ) ELT 277 (AP), wherein section 111 as well as section 125 were considered and it was held after considering the scheme of section 125 that- "3. But, all the same, we find the petitioner as entitled to a different relief. The order of confiscation is made under Section 111 of the Customs Act, 1962 on account of concealment. Section 125 requires that whenever confiscation of any goods is authorised by the Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under the Act or under any other law for the time....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e the briefcase of NCv used for concealment of the said gold. Sd/-xxxx Deputy Collector of Customs." It is apparent that the distinction and the non-compliance with the provisions of law as pointed out earlier was not kept in view either by the original, or the appellate authority or the revisional authority. 4. In that view of the matter, we set aside the orders of the Assistant (sic. Deputy) Collector of Customs and the appellate as well as the revisional authorities and remand the matter to the Deputy Collector of Customs, 4th respondent herein to allow opportunity to the petitioner to pay in lieu of confiscation such sum as he decides fit and decide the matter according to law." 9. Further, the Hon'ble Madras High Court in T Elavarasan, 2011 (266) ELT 167 (MAD HC),was pleased to rely on the said Judgment of Hon'ble Andhra Pradesh High Court and it was held that - "15 .... It is also noted that gold is not a prohibited item. Further, an option is available to a person, who is the owner of the goods, or where such owner is not known, the person from whose possession or custody such goods ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ricted' items can be permitted for export under licence. There is no dispute on the fact that in the instant case, since the Appellant was not carrying RBI permission, the export of seized currencies was held as 'restricted'. 12. Regulation 5 of FEM (Export & Import of Currency) Regulations, 2000, notified vide Notification No.FEMA 6/RB 2000 dated 3.5.2000, reads as under- "5. Prohibition on export and import of foreign currency:- Except as otherwise provided in these regulations, no person shall, without the general or special permission of the Reserve Bank, export or send out of India, or import or bring into India, any foreign currency. 11 Similarly, section 11 (1) of Foreign Trade (Development & Regulation) Act, 1992, reads as follows- "11. Contravention of provisions of this Act, Rules, Orders and Foreign Trade Policy. - (1) No export or import shall be made by any person except in accordance with the provisions of this Act, the rules and orders made thereunder and the foreign trade policy for the time being in force." 13. If, even in the context of section 125, by invoking definition of 'proh....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the Referral Bench thereafter, was pleased to permit option to redeem on payment of fine. 15. The Revenue in the course of arguments relied on the Judgments reported in Harish Muljimal Gandhi, 2013 (294) ELT 470 (Tri. - Mumbai), UOI vs. Mohammed Aijaj Ahmed, 2009 (244) ELT 49 (Born.) and CC vs. Samynathan Murugesan, 2009 (247) ELT 21 (Mad.). The challenge to the latter two Judgments was dismissed before the Hon'ble Apex Court. It is submitted that - (i) In Harish Muljimal Gandhi (supra), neither the Judgment of Hon'ble Andhra Pradesh High Court in Shaik Jamal Basha (supra), nor section 67 of FERA and non-existence of any similar provision in FEMA, was brought to the knowledge of the Hon'ble Tribunal. The binding precedents relied hereinabove for construing the purport of section 125 were also not pointed out. (ii) In 2009 (244) ELT 49 (Bom.), UOI vs. Mohammed Aijaj Ahmed, in fact, the Hon'ble Bombay High Court was pleased to hold that- "2 .... it would thus be clear that if only the owner is not known, then a person from whose possession or custody such goods have been seized....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reference to the mandatory provisions of the Act." (vi) Several other precedents of Government of India, and of this Hon'ble Tribunal wherein the seized currency was released on payment of fine, are already placed on record. Thus, without prejudice, even if, the Appellant fails in his argument that grant of option to redeem the goods on payment of fine was mandatory, a case for exercising discretion for grant of such option is made out in the instant case. (vii) The penalty imposed is also very high. The seizure was effected several years back. Grave loss has already been caused. Case for modification by reduction of penalty amount is also therefore, made out. The Ld. Counsel also placed reliance on following judgments: (i) Peringatil Hamza Vs. CC (Airport), Mumbai Tribunal Mumbai's order No. A/1228/14/SMB/C-IV dt. 18.7.2014 (ii) Bhagav B. Patel & Others Vs. Commissioner of Customs, CST, Mumbai Tribunal Mumbai's Order No. A/2388-2391/15/CB dt. 4.8.2015. 4. Shri D. K. Sinha Ld. Asstt. Commissioner (A.R.) appearing on behalf of Revenue reiterates the findings of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ption to pay fine in lieu of confiscation.- (1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods 1[or, where such owner is not known, the person from whose possession or custody such goods have been seized,] an option to pay in lieu of confiscation such fine as the said officer thinks fit: From the above section 125, it is the discretion vested in the authority whether to allow redemption of confiscated goods on payment of fine or otherwise. In the present case it is noticed that the appellant admittedly tried to mislead the officers, investigating the case. First he stated that currencies belonged to Mr. Dinesh Manohar Pahuja and Mr. Manohar Shyamlal Pahuja, China then changed his statement that it belonged to Mr. Khushaldas Belani of Singapore. In further investigation by DRI, as per the report of High Commission of India at Singapore the currencies were not bought even by Shri Kushaldas Belani. Th....