TaxTMI 
TaxTMI 
2024 (2) TMI 980
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....nerate, the first respondent herein against the Order - in - Appeal Airport. Cus. I No.206 of 2020 (F.No.C4/I/99/O/2020- AIR) dated 20.08.2020 of the Commissioner of Customs (Appeals-I), Chennai. 5. By the Impugned Order, the third respondent has accepted the Revision Petition filed by the first respondent herein against the order of the aforesaid Order of the Commissioner of Customs (Appeals-I), Chennai. 6. Operative portion of the Impugned Order reads as under:- "15. Once goods are held to be prohibited, Section 125 still provides discretion to consider release of goods on redemption fine. Hon'ble Supreme Court in case of M/s. Raj Grow Impex has laid down the conditions and circumstances under which such discretion can be used. The same are reproduced below. 71. Thus, when it comes to discretion, the exercise thereof has to be guided by law; has to be according to the rules of reason and justice; and has to be based on the relevant considerations. The exercise of discretion is essentially the discernment of what is right and proper, and such discemment is the critical and cautious judgment of what is correct and proper by differentiating between shadow and substance as....
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....ai by Order - in - Appeal Airport. Cus. I No.206 of 2020 (F.No.C4/I/99/O/2020-AIR) dated 20.08.2020. 10. The Commissioner of Customs (Appeals-I) partly modified Orde - in - Original No.61/2020-2021-Commissionerate-1 dated 08.06.2020 of the second respondent by holding that the petitioner was entitled for redemption of the currency seized from the person of the petitioner on payment of redemption fine. 11. Operative portion of the Order-in-Original No.61/2020-2021- Commissionerate-1 dated 08.06.2020 reads as under:- "18. Considering the above facts, I pass the following order:- ORDER i. I order for absolute confiscation of the seized foreign currency equivalent to Indian Rs.46,44,120/- (Rupees Forty Six Lakhs Forty Four Thousand one Hundred and Twenty Only) under Section 113 (d), 113 (e) & 113 (h) of the Customs Act, 1962 read with FEM (Export and Import of Currency) Regulations, 2015. ii. I impose a penalty of Rs.5,00,000/-(Rupees Five Lakh Only) on the passenger, Smt. Rayavarapu Sridevi w/o Shri.E.Subramaniam under Section 114 of the Customs Act, 1962." 12. Operative portion of the Order - in - Appeal Airport, Cus.I No.206/2020 dated 20.08.2020 of the Commissioner of....
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....62 had been amended vide Section 59 of the Finance Act, 2018 (Act 13 of 2018) on 29.03.2018. 16. Section 11 of the Customs Act, 1962 is in Chapter IV of the Customs Act, 1962. It deals with "Prohibition on Importation and Exportation of Goods". Section 11(1) of the Customs Act, 1962, empowers the Central Government to prohibit import and export of goods either absolutely or subject to such Notification for any of the purpose specified in Sub-Section (2). Sub-Section (2) to Section 11 of the Customs Act, 1962 reads as under:- Section 11. Power to prohibit importation or exportation of goods (1) If the Central Government is satisfied that it is necessary so to do for any of the purposes specified in sub-section (2), it may, by notification in the Official Gazette, prohibit either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification, the import or export of goods of any specified description. (2) The purposes referred to in sub-section (1) are the following:- (a)the maintenance of the security of India; (b) the maintenance of public order and standards of decency or morality; (c) the prevent....
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.... or class of goods or clearance thereof provided in any other law for the time being in force, or any rule or regulation made or any order or notification issued thereunder, shall be executed under the provisions of that Act only if such prohibition or restriction or obligation is notified under the provisions of this Act, subject to such exceptions, modifications or adaptations as the Central Government deems fit. 59.In the Customs Act, in section 11, after sub-section (2), the following sub-section shall be inserted with effect from such date as the Central Government may, by notification in the Official Gazette, appoint, namely:- "(3) Any prohibition or restriction or obligation relating to import or export of any goods or class of goods or clearance thereof provided in any other law for the time being in force, or any rule or regulation made or any order or notification issued thereunder, shall be executed under the provisions of that Act only if such prohibition or restriction or obligation is notified under the provisions of this Act, subject to such exceptions, modifications or adaptations as the Central Government deems fit.". 19. Section 11(3) of the Customs Act, 1962 w....
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....s Act, 1962 reads as under:- "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" 26. The definition "goods" in Section 2(22) (d) of the Customs Act, 1962 includes "currency and negotiable instruments". Section 2(33) of the Customs Act, 1962 defines the expression "prohibited goods". 27. As per the definition of "prohibited goods" in Section 2(33) of the Customs Act, 1962, prohibited goods? means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with. 28. Section 2(22)(d) and Section 2(33) of the Customs Act, 1962 read as under:- Section 2(22) (d) of the Customs Act, 1962 Section 2(33) of the Customs Act, 1962 2(22) "goods" includes- (a) (b) (c) (d) currency and negotiable instruments; 2(33)-prohibited goods? means any goods the import or export of which is subject ....
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....:- (3) Any person may take out of India, - (b) unspent foreign exchange brought back by him to India while returning from travel abroad and retained in accordance with the Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2015;" 32. The Reserve Bank of India has issued A.P.(DIR Series) Circular No.45/2015-16 [(1)/6(R)] dated 04.02.2016. Relevant portion of A.P.(DIR Series) Circular No.45/2015-16 [(1)/6(R)] dated 04.02.2016 reads as under:- "2. Synopsis of the new regulations is given as under: A. Export and import of Indian currency and currency notes b) Any person resident outside India, not being a citizen of Pakistan or Bangladesh, and visiting India, i. may take outside India currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.25,000 (Rupees Twenty Five Thousand only) per person ii. may bring into India currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.25,000 (Rupees Twenty Five Thousand only) per person C. Export of Foreign Exchange and Currency Notes i. An authorised person may send out of India foreign curre....
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.... Management Act, 1999. 36. Therefore, without doubt, it is clear that import or export of foreign currency is prohibited if it is in contradiction of the above Regulation. 37. If import or export of "goods" is prohibited either under the provisions of the Customs Act, 1962, or under any other law time being in force, such goods can be ordered to be confiscated under Section 112 & Section 113 of the Customs Act, 1962. 38. Under Section 114 of the Customs Act, 1962, penalty can also be imposed for attempting to export goods improperly. Section 113 and Section 114 of the Customs Act, 1962 go hand in hand. They read as under:- Section 113 of the Customs Act, 1962 Section 114 of the Customs Act, 1962 113. Confiscation of goods attempted to be improperly exported, etc:- The following export goods shall be liable to confiscation:- a) any goods attempted to be exported by sea or air from any place other than a customs port or a customs airport appointed for the loading of such goods; b) any goods attempted to be exported by land or inland water through any route other than a route specified in a notification issued under clause (c) of section 7 for the export of such goods; ....
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....ct or omission would render such goods liable to confiscation under section 113, or abets the doing or omission of such an act, shall be liable:- i. in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty 5 [not exceeding three times the value of the goods as declared by the exporter or the value as determined under this Act], whichever is the greater; ii. in the case of dutiable goods, other than prohibited goods, subject to the provisions of section 114A, to a penalty not exceeding ten per cent. of the duty sought to be evaded or five thousand rupees, whichever is higher: Provided that where such duty as determined under subsection (8) of section 28 and the interest payable thereon under section 28AA is paid within thirty days from the date of communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent. of the penalty so determined;] iii. in the case of any other goods, to a penalty not exceeding the value of the goods, as declared by the exporter or the value as determine....
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....India Vs. Raj Grow Impex LLP, 2021 (377) E.L.T. 145 (S.C.), held that when export or import have a far reaching impact on the national economy. Therefore, discretion under Section 125 of the Customs Act, 1962 needs to be exercised with caution. Paragraph No.82 of the said judgment reads as under:- "82. The sum and substance of the matter is that as regards the imports in question, the personal interests of the importers who made improper imports are pitted against the interests of national economy and more particularly, the interests of farmers. This factor alone is sufficient to find the direction in which discretion ought to be exercised in these matters. When personal business interests of importers clash with public interest, the former has to, obviously, give way to the latter. Further, not a lengthy discussion is required to say that, if excessive improperly imported peas/pulses are allowed to enter the country's market, the entire purpose of the notifications would be defeated. The discretion in the cases of present nature, involving far-reaching impact on national economy, cannot be exercised only with reference to the hardship suggested by the importers, who had made suc....