2005 (8) TMI 141

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....al listed below :- (i) Wall Street Finance Ltd. v. C.C. (Prev.), Mumbai - 2002 (147) E.L.T. 112 (ii) R.R. Sen and Brothers v. C.C., Mumbai - 2001 (128) E.L.T. 187. These two decisions were rendered respectively on 3-2-2000 and 20-11-2000. The matter has been referred for decision by a large Bench as the referral Bench noticed a contrary decision rendered subsequently on 2-2-2001 in the case of B.P. Nayak v. C.C. (Prev.), Mumbai - 2001 (136) E.L.T. 604. 2.The facts are not in dispute. Sale proceeds of foreign currency smuggled out of India were deposited by M/s. Tiruchi Enterprises in their Bank account. Against such deposits, they obtained pay orders and bought more foreign currency from the appellants for the purpose of smuggli....

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.... rendered in a totally different context. It was held therein that payment by way of bank draft is as good a payment as cash. The Apex Court held in that case that the demand for payment of cash would have been honoured by the Bank on behalf of the purchaser and hence refusal to accept the bank draft amounted to a breach of contract. 6.In the present case, the amounts have been seized from the Bank before the appellants have been able to encash the pay orders. Having handed over the cash to Revenue which was deposited by M/s. Tiruchi out of sale proceeds of smuggled out foreign currency, the Bank cannot obviously honour the pay orders. Applying the Apex Court decision cited above, it is clear in this case that since the Bank cannot honou....