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Jatin C Jhaveri Versus Union Of India And Vice-Versa

Confiscation of foreign currency and imposition of penalty - Clauses (d), (e) and (i) of Section 113 of the Customs Act, 1962 - Seizure of US dollars - Import of currency as advance payments towards supply of diamonds - absence of requisite permission of Reserve Bank of India - Held that:- the greater significance and important is the absence of any special or general permission as contemplated under Section 8(1) of FERA. No such permission is produced or relied upon. In fact, that is not even t .....

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independently established in the light of requirements under said Section 8(1). The assessment in that behalf by the Appellate Authority under FERA and the High Court is completely incorrect. - Mr. Bhatt, attempted to rely on Notification No.FERA-81/89-RB dated 09.08.1989 as amended upto 09.03.1999, but the said notification is in relation to Section 13 of FERA and not in relation to Section 8(1) thereof. Secondly, this notification was not adverted or referred to at any stage and in any cas .....

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nt with interest @ 10% per annum within six weeks from the date of this judgment. - Appeals disposed of - Civil Appeal No.11127 OF 2011 With Civil Appeal No(s).11128-11131/2011 - Dated:- 13-5-2016 - T.S.THAKUR, CJI AND UDAY UMESH LALIT, J For the Appellant : Mr. Bhargava V. Desai,Adv. And Mr. B. Krishna Prasad,Adv. For the Respondent : Mr. B. Krishna Prasad,Adv. JUDGMENT UDAY U. LALIT, J. 1. These appeals arise out of common judgment and order dated 19.10.2010 passed by the High Court of Judicat .....

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intending to board a flight to Hongkong from Mumbai, had checked in a grey suitcase and a black briefcase. On suspicion, the Custom Officers searched the baggage and found the suitcase to be containing US $ 289,250 while the brief case contained US $ 114,300. The currency was seized and Ajit Dodia was questioned. He disclosed that he was to accompany Jatin Jhaveri, a diamond trader, that his brother Jitendra Dodia was working with Jatin Jhaveri as a sorter, that his trip was finalized and arran .....

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to hand it over to the brother of Jatin Jhaveri at Hongkong. He however denied ownership of the currency in question and also stated that he had nothing to do with the briefcase. He repeated in writing to stress the point saying It does not belong to me . This incident led to initiation of proceedings under Clauses (d), (e) and (i) of Section 113 of the Customs Act, 1962 proposing penalty as well as confiscation of the currency. C. In defence, Jatin Jhaveri now contended that he had been to USA .....

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No.10763 dated 28.06.1993 in respect of US $ 35,250. According to him the currency was obtained and imported by him as advance payment towards supply of diamonds, that he could not deposit the currency in the bank as the bank had refused to accept the same and therefore he was proposing to take it along with him to Hongkong on 27.07.1993. It was his further case that while he was going towards the Airport he had received a message that his mother was ill and that Ajit Dodia was intercepted with .....

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8.6.93 to substantiate his claim that this currency was legally imported into India, when he had come from USA on 25.6.93 with US $ 2,59,250/- and made this declaration before the Customs on his arrival. Had these currency declaration forms been with Shri Jatin Jhaveri then in the normal course, they should have been found along with the foreign currency only and these receipts should have been recovered during the search of the office/residential premises of Shri Jatin Jhaveri. He ought to have .....

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n 27th /28th July 1993. Had these currency been legally brought into India, Shri Jatin Jhaveri would have perhaps himself checked the baggage through Customs, but the fact that he left to be checked and cleared through Customs by Shri Ajit Dodia itself indicate that he did not have any honest design of flying abroad on that night and that he did not have any legal documents for possession of these currency . In the premises, he ordered confiscation of foreign currency of US $ 403,550 (US $ 289,2 .....

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om and C/577/95-Bom preferred by Jatin Jhaveri, Ajit Dodia and Jitendra Dodia against the order of the Commissioner of Customs were disposed by the Customs Excise and Gold Control Appellate Tribunal (CEGAT, for short), West Regional Bench, Mumbai. It held that though Jatin Jhaveri had disowned the currency in his statement dated 12.10.1993, it did not mean that he had forfeited the ownership and could not make a claim in respect thereof at a later stage. The concerned Currency Declaration Forms .....

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thereof, the confiscation was confirmed but the personal penalty imposed on Ajit Dodia was reduced to ₹ 1 lac. As regards Jitendra Dodia, it was observed that he had dissociated himself and the role attributed to him was also limited to packing the bag. This decision rendered by CEGAT was not challenged and attained finality in respect of proceedings under the Customs Act. G. Thereafter an addendum dated 06.08.1999 was issued by the Directorate of Enforcement, Mumbai to the earlier Show C .....

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ented advance payment towards export or that he was in possession of relevant Currency Declaration Form in support of his claim. He found that the Immigration/Embarkation Card of Ajit Dodia was admittedly filled in by Jatin Jhaveri which indicated that he was physically present at the Airport along with Ajit Dodia. As regards genuineness of the Currency Declaration Forms, he relied upon the observations made by Commissioner of Customs, Mumbai in adjudication order dated 30.08.1995 as quoted abov .....

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ired the said foreign exchange of US $ 403,550 from Shri Jatin Jhaveri, a person other than an Authorised Dealer in Foreign exchange in India, which was later on seized by the Air Customs Officers from Shri Ajit Dodia on 28.07.1993 under the panchanama. It is equally abundantly crystal clear that Shri Jitendra Dodia has in fact aided and abetted said Shri Jatin Jhaveri in transferring and his brother Shri Ajit K. Dodia in acquiring the aforesaid foreign exchange of US $ 403,550 from said Shri Ja .....

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st Shri Jitendra K. Dodia are proved beyond any doubt. Accordingly, I hold them guilty of these respective contraventions against them. Concluding thus, the Special Director imposed penalty of ₹ 30 lacs each on Jatin Jhaveri and Ajit Dodia and of ₹ 7.5 lacs on Jitendra Dodia. It was held that the currency in question was liable to confiscation under Section 63 of FERA and it was so ordered. I. This order of the Special Director was challenged in Appeal Nos.454, 462 and 463 of 1999 by .....

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ac. As regards, appeal preferred by Jatin Jhaveri, the Currency Declaration Forms furnished by him were taken to be strong pieces of evidence. It was observed as under:- Simply because of the fact that the custom authorities are not able to trace out office copies of these forms, it will not render these forms as not being authentic and therefore inadmissible. It is for the respondent to prove that these forms were not genuine. As regards the confirmatory evidence of overseas buyers, the respond .....

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High Court contending that he was entitled to the release of US $ 289,250 along with interest @ 18%. The High Court affirmed the view taken by the Appellate Tribunal and dismissed FERA Appeal No.64-66 of 2006 by its judgment and order dated 19.10.2010. It was observed that the order of CEGAT having attained finality, that order had definite bearing on the controversy in question and though the findings recorded in the Customs proceedings may not be binding on FERA proceedings, it was not possibl .....

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ismissal of FERA Appeal Nos.64-66 of 2006. Special Leave to Appeal in all the matters was granted by this Court vide order dated 09.12.2011. During the pendency of these appeals, by order dated 14.02.2014 passed in Notice of Motion No.225 of 2012 in Writ Petition No. 2976 of 2004 preferred by Jatin Jhaveri, the Customs Department was permitted by the High Court to refund the amount of US $ 289,250 in Indian Rupees. Accordingly amount of ₹ 1,83,09,525 was refunded and credited to the accoun .....

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bmission, Jatin Jhaveri was entitled to the same. On the other hand, Mr. K. Radha Krishnan, learned Senior Advocate, appearing for Union of India submitted that the initial statement of Jatin Jhaveri recorded on 12.10.1993, which itself was more than two months after the seizure, did not even whisper about currency declaration forms and no ownership in respect of currency was claimed. In his submission, Currency Declaration Forms were rightly observed to be suspicious and not relied upon by the .....

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ustoms proceedings pertained to Clauses (d) (e) & (i) of Section 113 of the Customs Act, 1962. The relevant provisions of Section 113 with relevant clauses is as under: Section 113: Confiscation of goods attempted to be improperly exported, etc:- The following export goods shall be liable to confiscation …………………….….. …………………………. (d) any goods attempted to be ex .....

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of baggage with the declaration made under Section 77; Section 8(1) of FERA is as under: 8. (1) Except with the previous general or special permission of the Reserve Bank, no person other than an authorised dealer shall in India, and no person resident in India other than an authorised dealer shall outside India, purchase or otherwise acquire or borrow from, or sell, or otherwise transfer or lend to or exchange with, any person not being an authorised dealer, any foreign exchange: Provided that .....

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ion of the Reserve Bank, purchases or otherwise acquires any foreign exchange. The emphasis in proceedings under FERA is, therefore, on such acquisition of foreign exchange without the previous general or special permission of the Reserve Bank. Any failure in that behalf would lead to incidents including confiscation under Section 63 of the FERA. 7. We have gone though the currency declaration forms in question. It is relevant that in his first statement dated 12.10.1993, Jatin Jhaveri had clear .....

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in Jhaveri while he was in USA. These letters are bereft of any details and in our view are quite self-serving. At the same time, as found by the Special Director, the original passport of Jatin Jhaveri was never produced from which it could be established that he was in USA on the dates alleged. 8. However, what is of greater significance and import is the absence of any special or general permission as contemplated under Section 8(1) of FERA. No such permission is produced or relied upon. In f .....

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