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2014 (9) TMI 798 - HC - CustomsConfiscation of currency - Redemption fine - Held that:- On facts, there appears to be no dispute that the foreign currency was attempted to be exported by the first respondent - passenger (since deceased) without declaring the same to the Customs Department and therefore, it resulted in seizure - Section 113 of the Customs Act imposes certain prohibition and it includes foreign exchange. In the present case, the jurisdiction Authority has invoked Section 113 (d), (e) and (h) of the Customs Act together with Foreign Exchange Management (Export & Import of Currency) Regulations, 2000, framed under Foreign Exchange Management Act, 1999. Section 2(22)(d) of the Customs Act, defines goods to include currency and negotiable instruments, which is corresponding to Section 2(h) of the FEMA. Consequently, the foreign currency in question, attempted to be exported contrary to the prohibition without there being a special or general permission by the Reserve Bank of India was held to be liable for confiscation. The Department contends that the foreign currency which has been obtained by the passenger otherwise through an authorized person is liable for confiscation on that score also. Provision is made under the Foreign Exchange Management (Current Account Transactions) Rules, 2000, which imposes prohibition in respect of Schedule I, restriction in Schedule II transaction, which are to be done on prior approval and Schedule III also come with the rider that prior approval of the Reserve Bank of India should be obtained. Assuming that a person is permitted to carry 25,000 US $ for business purpose, the fact remains, that the said drawal of the foreign currency should be only from an authorized person in terms of Rule 2(b) of the Foreign Exchange Management (Current Account Transactions) Rules, 2000. The passenger, in this case, attempted to take the money out of India without a proper declaration and has not obtained from an authorized person, thereby, he has violated the Foreign Exchange Management (Export and Import of Currency) Regulations, 2000 - Tribunal fell into error by setting aside the order of absolute confiscation - Decided in favor of Revenue. Regarding redemption fine and penalty u/s 114(i) - Held that:- Original Authority imposed fine of ₹ 5.00 lakhs and the Tribunal has thought it fit to reduce the same as ₹ 1.00 lakh. - when the appeal is taken up, the first respondent had actually died and the appeal was pursued by the wife of the first respondent - widow. Therefore, while restoring the order of the Original Authority in respect of absolute confiscation, we set aside the order of the Tribunal insofar as allowing the redemption on payment of fine of ₹ 2.00 lakhs. Insofar as imposition of penalty is concerned, taking note of the plea made by the learned counsel appearing for the first respondent, we are not inclined to interfere with the order of the Tribunal insofar as reduction of penalty. - Decided against the revenue.
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