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2016 (9) TMI 415 - CESTAT MUMBAI

2016 (9) TMI 415 - CESTAT MUMBAI - TMI - Confiscation of seized currencies - section 113 (d), (e) and (h) of the Customs Act, 1962 - imposition of penalty - Section 114 (i) of the Customs Act, 1962 - undeclared currencies - prohibited goods - section 2 (33) - FERA Act - Held that: - it is established that appellant attempted to export by carrying himself as passenger, foreign and Indian currencies without declaration to the Customs authority and without permission from RBI - the same undoubtedly .....

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and permission. Therefore attempt of export of currencies without such approvals/permissions lead to confiscation - looking to the conduct of the appellant and nature of the offence, the denial of grant of option to appellant is justified. - Appeal dismissed - decided against appellant. - C/941/08 - A/88928/16/SMB - Dated:- 1-8-2016 - Shri Ramesh Nair, Member (Judicial) Shri Sanjay Agarwal, Advocate for Appellant Shri D.K. Sinha, Asstt. Commr. (A.R) for respondent ORDER This appeal is filed .....

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cies as detailed below: Indian - ₹ 17000/- US $ - 2400 British Pound - 1060 Euro - 62800 UAE Dirhams - 1000 Qatar Rial - 1000 Hong Kong Dollars - 6000 Collectively equivalent to Indian ₹ 38,00,671/-. On enquiry from the appellant, he initially stated that the currencies belonging to Mr. Dinesh Manohar Pahuja and Mr. Manohar Shyamlal Pahuja, resident at China, however later on took U turn and stated that the currencies belonged to one businessman in Singapore namely Shri Khushaldas Be .....

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issued by him. It appeared that sale invoice of foreign currencies submitted by the appellant was found forged. Show cause notice No. SD/INT/AIU/10/2007 AP C dated 20.09.2007 was issued to the appellant proposing confiscation of seized currencies and consequential penalty. The adjudicating authority vide the impugned order passed following order: Having due regard to the facts and circumstances of the case, I pass the following orders: ORDER (i) I order absolute confiscation of the impugned For .....

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118 (b) of the Customs Act. Aggrieved by the impugned order, the appellant is before me. 3. Shri Sanjay Agarwal Ld. Counsel, appearing for the appellant made the arguments which were reduced in written submission as under:- 1. The Adjudicating Authority held that export of currencies was 'restricted'. It was further held that the Appellant was not carrying any RBI permission. It is not the case of the Department that the export of currencies was per se prohibited, or that currencies were .....

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S.C.) with following observations- "8. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated…...." Moreover, Section 2, which cont .....

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"regulate" and "prohibit" inhere in them elements of restriction but it varies in degree ..... " "46. The terms, however, indisputably would be construed having been used Section 3(2) of the 1992 Act uses prohibition, restriction and regulation. They are, thus, meant to be applied differently. Section 51 of the 1962 Act also speaks of prohibition. Thus, in terms of the 1992 Act as also the policy and the procedure laid down thereunder, the terms are required to be .....

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xpressly prohibited under Section 11 of the Customs Act, 1962 or by any other statutory notification, the Respondent ought to have granted an option to redeem the sae, on payment of fine in lieu of confiscation. 4. As evident from the judgment in Asian Food Industries (supra) the meaning of word "prohibited" will have to be construed in regard to the text and context in which it is used. Section 2(33) although defines "prohibited goods", however the section itself before appl .....

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not to be read in isolation but in the context of the statutory provisions, so as to give a meaningful application to them and where the context makes the definition inapplicable, the same meaning cannot be assigned, by application of the words 'unless the context otherwise requires'. Reliance in this regard is placed on following binding precedents of Hon'ble Apex Court - a. In Mukesh K. Tripathi vs Senior Divisional Manager, L1C, (2004) 8 SCC 387 this Court observed: (SCC pp. 399-4 .....

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26, paras 27-28)- "27. A definition is not to be read in isolation. It must be read in the context of phrase which would define it. It should not be vague or ambiguous. The definition of words must be given a meaningful application; where the context makes the definition given in the interpretation clause inapplicable, the same meaning cannot be assigned'. c. In State of Maharashtra vs Indian Medical Assn., (2002) 1 SCC 589 it was observed that the definition given in the interpretation .....

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sentiality Certificate is required to be given by the State Government and permission to establish a new medical college is to be given by the State Government under Section 64 of the Act. If we give the defined meaning to the expression 'management' occurring in Section 64 of the Act, it would mean the State government is required to apply itself for grant of permission to set up a government medical college through the University. Similarly it would also mean the State Government apply .....

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nterpreted liberally in light of the words "improperly imported" for confiscation of all goods, however, when it comes to section 125, if the definition is applied, the same would result in absurdity and would render the provisions redundant and otiose. Under section 125 if confiscation is authorized by the Act, the Adjudicating Authority has two options offered by statute- a. If importation or exportation of the confiscated goods is "prohibited" under this Act or any other l .....

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ould be rendered redundant and meaningless, and no such interpretation can thus be given in the context of section 125, in light of the judgment of Hon'ble Supreme Court in Asian Food Industries (supra) r/w the above referred binding precedents on interpretation of words "unless the context otherwise requires". Therefore, the judgments relied in the impugned order are not applicable in the context that the aforesaid legal position binding precedents of Hon'ble Apex Court have n .....

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relevant to point to Judgment of Hon'ble Andhra Pradesh High Court in Shaik Jamal Basha vs. GOI, 1997 (91 ) ELT 277 (AP), wherein section 111 as well as section 125 were considered and it was held after considering the scheme of section 125 that- "3. But, all the same, we find the petitioner as entitled to a different relief. The order of confiscation is made under Section 111 of the Customs Act, 1962 on account of concealment. Section 125 requires that whenever confiscation of any goo .....

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x B of the Rules as articles which shall not be imported free of duty. Hence gold in the form other than ornaments is entitled to be imported on payment of duty. Attempt to import gold unauthorisedly will thus come under the second part of Section 125 (1) of the Act where the adjudging officer is under mandatory duty to give option to the person found guilty to pay (fine) in lieu of confiscation. Section 125 of the Act leaves option to the officer to grant the benefit or not so far as goods whos .....

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quot;Record of Personal Hearing and Findings: The passenger states that for his sister's marriage he has brought the gold and on the advice from one of his friends he concealed the gold in the suitcase handle to avoid payment of duty. The passenger as such has deliberately concealed the gold to avoid detention and payment of duty. The briefcase used to conceal the gold is also liable for confiscation. xxxx xxxx xxxx xxxx xxxx xxxx (The earlier portion of the printed form of the order, marked .....

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alment of the said gold. Sd/-xxxx Deputy Collector of Customs. It is apparent that the distinction and the non-compliance with the provisions of law as pointed out earlier was not kept in view either by the original, or the appellate authority or the revisional authority. 4. In that view of the matter, we set aside the orders of the Assistant (sic. Deputy) Collector of Customs and the appellate as well as the revisional authorities and remand the matter to the Deputy Collector of Customs, 4th re .....

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such owner is not known, the person from whose possession or custody such goods had been seized, to pay fine, in lieu of confiscation, under Section 125 of the Customs Act, 1962. In such circumstances, there is nothing shown on behalf of the respondents that the petitioner is not entitled to get the goods released, on his payment of the customs duty and the penalty liable to be paid by him, as per the Notification No. 31/2003-Customs, dated 1-3-2003, issued under Chapter 71 of the First Schedul .....

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edemption fine, as per the Notification No. 31/2003-Customs, dated 1-3-2003, and as per the provisions of Section 125 of the Customs Act, 1962. it is also made clear that the provisional release of the goods in question would be subject to the adjudication proceedings to be conducted by the authorities concerned, and the petitioner shall cooperate, fully in the said proceedings ... " 10. It is further relevant to note that there is no provision in FEMA, similar to section 67 of FERA. For re .....

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l goods other than the entries in the Export Licensing Schedule along with its appendices are freely exportable, subject to any other law for the time being in force. The said General Notes distinguish between 'prohibited' and 'restricted' goods, as separate class. Whereas, the 'prohibited' items are not permitted to be exported and export licence will not be given in the normal course for such goods, the 'restricted' items can be permitted for export under licenc .....

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mission of the Reserve Bank, export or send out of India, or import or bring into India, any foreign currency. 11 Similarly, section 11 (1) of Foreign Trade (Development & Regulation) Act, 1992, reads as follows- "11. Contravention of provisions of this Act, Rules, Orders and Foreign Trade Policy. - (1) No export or import shall be made by any person except in accordance with the provisions of this Act, the rules and orders made thereunder and the foreign trade policy for the time being .....

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terpreted in the context of section 111 or 113. 14. A larger Bench of this Hon'ble Tribunal in the matter of Peringatil Hamza vs. CC Airport, Mumbai, vide order dated 23.6.2014 in Appeal No.C/65/08-MUM was pleased to hold that currency beyond permissible limit are prohibited goods. Further, in para 7 thereof, it was held that Indian currency beyond ₹ 10,000/- for taking outside India was 'restricted' goods. However, in para 7.1, it was held that the same was 'prohibited' .....

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the goods are not freely importable or exportable, grant of option to pay fine was discretionary. No such condition flows from bare reading of section 125. In Kulwant Kaur's case, (2001) 4 SCC 262, the Hon'ble Supreme Court in para 2 of the judgment was pleased to hold that a decision, which proceeds on the basis of a concession, cannot be termed to be a binding precedent. (ii) Moreover, the binding precedent in Shaik Jamal Basha vs. GOI (supra) of Andhra Pradesh High Court, which was a .....

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ion to redeem on payment of fine. 15. The Revenue in the course of arguments relied on the Judgments reported in Harish Muljimal Gandhi, 2013 (294) ELT 470 (Tri. - Mumbai), UOI vs. Mohammed Aijaj Ahmed, 2009 (244) ELT 49 (Born.) and CC vs. Samynathan Murugesan, 2009 (247) ELT 21 (Mad.). The challenge to the latter two Judgments was dismissed before the Hon'ble Apex Court. It is submitted that - (i) In Harish Muljimal Gandhi (supra), neither the Judgment of Hon'ble Andhra Pradesh High Cou .....

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m whose possession or custody such goods have been seized, could have given an option to pay in lieu of confiscation such fine as the said officer thinks fit. The said precedent of Hon'ble Bombay High Court, which was upheld by the Hon'ble Apex Court, therefore, favours the Appellant rather than the Department, as it is undisputed position that none other than the Appellant herein has claimed the seized currency, and although the owner of the entire seized currencies is neither ascertain .....

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. Moreover, the precedents of Hon'ble Apex Court and the relevant statutory provisions as explained hereinabove, were not even brought to the notice of the Hon'ble High Court. It is submitted that view taken by the jurisdictional High Court in Bombay would be binding. Further, in this context, it may be relevant to reproduce the following passage recorded by this Hon'ble Tribunal in Maheshwari Solvent Extraction Ltd, 2014 (299) ELT 116, by reproducing observations of Hon'ble Supr .....

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rthermore, this Court, while rendering judgment in Dhondiram Tatoba Kadam was bound by its earlier decision of a coordinate Bench in Ramchandra Keshav Adke. We are bound to follow the earlier judgment which is precisely on the point in preference to the later judgment which has been rendered without adequate argument at the Bar and also without reference to the mandatory provisions of the Act." (vi) Several other precedents of Government of India, and of this Hon'ble Tribunal wherein th .....

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lso therefore, made out. The Ld. Counsel also placed reliance on following judgments: (i) Peringatil Hamza Vs. CC (Airport), Mumbai Tribunal Mumbai s order No. A/1228/14/SMB/C-IV dt. 18.7.2014 (ii) Bhagav B. Patel & Others Vs. Commissioner of Customs, CST, Mumbai Tribunal Mumbai s Order No. A/2388-2391/15/CB dt. 4.8.2015. 4. Shri D. K. Sinha Ld. Asstt. Commissioner (A.R.) appearing on behalf of Revenue reiterates the findings of the impugned order. He further submits that in various judgment .....

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stablish the legal source thereof, the Ld. Commissioner has rightly ordered for absolute confiscation of currencies, which does not require interference. In support he placed reliance on following case laws: (i) Sheikh Mohd. Omer Vs. Collector of Customs, Calcutta And Others 1983 (13) E.L.T. 1439 (S.C.) (ii) Om Prakash Bhatia Vs. Commissioner of Customs, Delhi 2003 (155) E.L.T. 423 (S.C.) (iii) Harinder Pal Singh Shergill Vs. Commissioner of Customs, Mumbai 2003 (160) E.L.T. 358 (Tri.Del.) (iv) .....

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0 (Tri.-Chennai) 5. I have carefully considered the submissions made by both the sides. From overall facts of the case, I find that it is established that appellant attempted to export by carrying himself as passenger, foreign and Indian currencies without declaration to the Customs authority and without permission from RBI. Therefore the same are undoubtedly liable for confiscation. As per the submission of the Ld. Counsel that the Ld. Commissioner should have given option for redemption of cur .....

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ch owner is not known, the person from whose possession or custody such goods have been seized,] an option to pay in lieu of confiscation such fine as the said officer thinks fit: From the above section 125, it is the discretion vested in the authority whether to allow redemption of confiscated goods on payment of fine or otherwise. In the present case it is noticed that the appellant admittedly tried to mislead the officers, investigating the case. First he stated that currencies belonged to Mr .....

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