TaxTMI 
TaxTMI 
2017 (1) TMI 1064
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....e Abdulla carried out detail investigation recorded statement of Abdulla, Sanjay Agarwal and others. On completion of the investigation, department officers felt that the currency which was seized by them on 14.02.2003 was sought to be illegally exported by Abdulla in a way that he was to hand over the same to M.S. Kumar in the transit lounge who was to take it to Singapore; accordingly, issued a show-cause notice for confiscation of the said currency and also for imposition of penalty Abdulla, M.S. Kumar and Sanjay Agarwal. Only Sanjay Agarwal, the current appellant cooperated with the adjudicating authority by filing reply and appearing through advocate for personal hearing. During the personal hearing and the reply to the show-cause notice, it was claimed by the appellant herein that the Indian currency as well as the foreign currency seized by the authorities are legitimate money, produced evidence in support of such claim and submitted that provisions of Section 113(d) and (h) of the Customs Act, 1962 is not a applicable in this case. The adjudicating authority did not agree with the contentions raised and ordered for absolute confiscation of the Indian currency as well as for....
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....good which are to be taken out of India to a place outside India; in the case in hand currency under confiscation was kept in the hand baggage of Abdullah who has checked in for travelling in India. It is his submission that as regards the foreign currency seized the matter was referred by the customs department to the Directorate of Enforcement, Foreign Exchange Management Act. The Dy. Director of FEMA issued a charge sheet and the matter was adjudicated by the Dy. Director and vide order no. DD/19/BZ/BAN/04/(FEMA)/(VS)/996 dated 28.04.2005 has categorically held that the foreign currency which has been possessed and seized by the customs authorities, were legally acquired currency in respect of sale of jewellery items and said foreign Currency was brought back from the United States. It is his submission that once the foreign currency is held as legally acquired by an authority under FEMA, the question of confiscation of the said currency does not, arise. It is his prayer that confiscation be set aside and penalty imposed on this appellant also be set aside. 4. Ld. Departmental Representative after taking us through the brief facts of the case and also various statements recor....
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.... the Customs Act, 1962. 7. Before we record our observations, undisputed facts in this are the currency in question was recovered from one of the passengers namely Abdullah travelling as Asad, when he was having a valid boarding pass for travelling Mumbai to Hyderabad in Air India Al 806. The said flight Al 806 is undisputedly flight originating in Mumbai and terminating at Hyderabad as a domestic sector flight. It is also undisputed that Abdullah is an employee of Sanjay Agarwal and is working in the jewellery shop of Sanjay Agarwal in Hyderabad. One M.S. Kumar to whom Abdullah was to hand over the currency notes was not apprehended despite the fact that he had checked in for Boarding to Singapore, got himself off loaded due to personal reasons; that the currency notes which was seized and confiscated were belonging to Sanjay Agarwal and his father Krishna Agarwal and were sale proceeds of the export goods (part amount). 8. We find from the records that the adjudicating authority has ordered for absolute confiscation of the foreign currency and Indian currency seized from Abdullah on the ground that there was a intention to hand over the currency to a foreign going passenger....
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....n order to imaginarily consider that Indian currency which is sought to be confiscated has been smuggled out, is also not in consonance with law as stated in Customs Act, 1962 as the entire seizure of Indian currency by the adjudicating authority premise and surmise as has been noticed by the fact that it is the finding "there is an intention to smuggle the Indian currency by handing it over to M.S. Kumar." A plain intention to do so cannot be held against anyone fastening the charge of smuggling of the goods. Further, we find that the appellant Sanjay Agarwal has been claiming that this amount of Indian currency which has been seized by the authorities were in fact an amount which, has been recorded in their books of accounts and informed to the taxing authority i.e. IT department. He would submit that very same amount of Rs. 47 lakhs was adjudicated by the Dy. Commissioner of Income Tax by an assessment order dated 25.02.2005, it was held that this amount was not be to be considered as undisclosed income declared in the block return, which would mean that the said amount has been properly recorded in the books of accounts. It that be so, the charge of department and the said curr....