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2019 (12) TMI 1380 - CGOVT - CustomsSmuggling - Gold Bars - Forex and Indian currency - packaging materials and other miscellaneous goods - absolute confiscation - penalty - cross-examination of the customs officers manning x-ray machine and red channel counter as well as the witnesses present on the date of seizure in the case - HELD THAT - From the evidence on record it is evident that Indian currency as well as huge amount of forex Dirham 1, 05, 410 was recovered from the PAX on 23-9-2012. The impugned currency was also not declared to the customs officers at the red channel under Section 77 of Customs Act 1962 by the PAX - It is observed that the PAX did not make the statutory declaration on his arrival to the customs authorities since the Forex (UAE Dirham 1, 05, 410) carried by him was much higher than the prescribed limit under the FEMA 1999 read with Foreign Exchange Management (Export and Import of Currency) Regulations 2000. The legal provisions of FEMA 1999 the Foreign Exchange Management (Export and Import of Currency) Regulations 2000 Section 2(33) of the Customs Act 1962 read with Section 11 clearly stipulate that an attempt to smuggle foreign currency and Indian currency is prohibited and merits confiscation under provisions of Customs Act 1962. In the case of Ram Kumar v. Commissioner of Customs 2015 (1) TMI 1126 - DELHI HIGH COURT Hon ble High Court of Delhi while dismissing the writ petition of the petitioner disallowed release of confiscated forex to be redeemed under Section 125 of Customs Act 1962. The ratio of judgment squarely applies to the present case - Therefore the impugned Indian and foreign currency seized from the PAX in violation of the provisions of FEMA 1999 Foreign Exchange Management (Export and Import of Currency) Regulations 2000 read with Sections 2(33) and 11 of Customs Act 1962 falling into the category of prohibited goods has been correctly confiscated under Section 111(d) (m) (o) of Customs Act 1962 by the adjudicating authority which has been upheld by the impugned order-in-appeal. Penalty under Section 112 and Section 114AA of Customs Act 1962 - HELD THAT - Keeping in view the gravity of the offence the order of Commissioner (Appeals) in reducing the penalty from Rs. 30 lacs to Rs. 5 lacs is erroneous and is set aside - It is observed that this is not a case for imposition of penalty under Section 114AA of the Customs Act 1962. Therefore the order of Commissioner (Appeals) in waiving the penalty under Section 114AA of Customs Act 1962 is legally sustainable and is upheld - In view of the seriousness of the offence wherein 70 (Seventy) gold biscuits weighing 8164.80 grams and valued at Rs. 2, 51, 89 735/- and forex 1, 05, 410 UAE Dirham have been smuggled by the PAX Government imposes a penalty of Rs. 40 lacs on the PAX under Section 112(a) of the Customs Act 1962. Appeal allowed in part.
Issues Involved:
1. Clubbing of Revision Applications 2. Confiscation of Gold Biscuits and Currency 3. Reduction and Waiver of Penalties 4. Request for Cross-Examination 5. Eligibility under Notification No. 12/2012-Customs 6. Re-export of Confiscated Goods 7. Release of Demand Draft and Indian Currency Issue-wise Detailed Analysis: 1. Clubbing of Revision Applications The Rajasthan High Court directed the revisional authority to club Revision Petition Nos. 375/37/B/2017-RA and 380/15-A/B/2015-RA and decide both petitions together after due notice to the petitioner. This order was issued without commenting on the merits of the case and remitted the matter back to the revisional authority. 2. Confiscation of Gold Biscuits and Currency The Additional Commissioner of Customs, Jodhpur, ordered the absolute confiscation of seventy gold biscuits weighing 8164.80 grams valued at Rs. 2,51,89,735/-, UAE Dirham AED 1,05,410, and INR Rs. 20,000/-. The Commissioner (Appeals) upheld the confiscation of the gold bars and concurred with the adjudicating authority’s decision to deny cross-examination of witnesses and customs officers. The PAX's contention that the customs declaration form was misplaced by the customs officer was deemed baseless. The Government upheld the absolute confiscation under Section 111 of the Customs Act, 1962. 3. Reduction and Waiver of Penalties The Commissioner (Appeals) reduced the penalty from Rs. 30 lacs to Rs. 5 lacs under Section 112 of the Customs Act, 1962 and waived the penalty under Section 114AA. The customs authorities challenged this reduction, arguing it was not commensurate with the gravity of the offense. The Government found the reduction erroneous and reinstated a penalty of Rs. 40 lacs under Section 112(a) of the Customs Act, 1962. The waiver of the penalty under Section 114AA was upheld as legally sustainable. 4. Request for Cross-Examination The PAX requested cross-examination of customs officers and witnesses, which was initially withdrawn but later reiterated. The Government disallowed this request, stating no new facts were brought forth and citing the Supreme Court judgment in Surjeet Singh Chhabra v. UOI, which held that confession statements made before customs officers are binding even if retracted. 5. Eligibility under Notification No. 12/2012-Customs The PAX claimed eligibility to carry up to 10 kg of gold under Notification No. 12/2012-Customs, but the Government found this incorrect. The PAX brought 8 kg of gold, exceeding the 1 kg limit for passengers returning after six months. The plea of ignorance of law was dismissed, referencing the Calcutta High Court's ruling in Provash Kumar Dey v. Inspector of Central Excise. 6. Re-export of Confiscated Goods The PAX requested the re-export of confiscated gold bars and currency. The Government denied this request, stating the conditions under Section 80 of the Customs Act, 1962, were not fulfilled since the PAX did not make a true declaration under Section 77. 7. Release of Demand Draft and Indian Currency The Commissioner (Appeals) allowed the release of a demand draft amounting to Rs. 12 lacs meant for deposit in the NRE Account and confiscated Indian currency amounting to Rs. 12,500/-. The Government upheld this order. Conclusion: 1. The absolute confiscation of seventy gold biscuits, forex, and concealment material is upheld under Section 111 of the Customs Act, 1962. 2. A penalty of Rs. 40 lacs is imposed under Section 112(a) of the Customs Act, 1962. 3. The penalty under Section 114AA is set aside. 4. The release of the demand draft amounting to Rs. 12 lacs and Indian currency amounting to Rs. 12,500/- is upheld. 5. Both Revision Applications are disposed of accordingly.
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