TMI Blog2014 (6) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Satish Choudhary has handed over the foreign currency to Shri PKJ. Therefore, as held by the Hon'ble apex court in the case of Vinod Solanki [2008 (12) TMI 31 - SUPREME COURT] and in K.I. Pavunny v. Asst. Collector (HO), Central Excise Collectorate, cochin [1997 (2) TMI 97 - SUPREME COURT OF INDIA] that "a find of fact was arrived at that the confession was voluntary in nature. Reliance therein for the purpose of arriving at the guilt of the accused was not only placed on the statement given under Section 108 of the Customs Act, 1962 but also on the deposition of evidences and it was also held law does not say that the accused has to prove that retraction of confession made by him was because of threat, coercion, etc. but the requirement is that it may appear to the court as such." As the findings are on the basis of statement of other and in the case of D. Bhoormal [1974 (4) TMI 33 - SUPREME COURT OF INDIA] the hon’ble apex has held that in case of penalty, the department has to prove that the person proceeded against was concerned with the smuggling or not. As the department has failed to establish that Shri OPJ was connected with the alleged smuggling of foreign currency, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) of the Customs Act, 1962, for smuggling out the above said foreign currency, in the following manner: (i) A penalty of ₹ 15,00,000/- (Rs. Fifteen Lacs only) on Shri Pankaj Jhunjhunwala (ii) A penalty of ₹ 15,00,000/- (Rs. Fifteen Lacs only) on Shri Satish Chaudhary. (iii) A penalty of ₹ 15,00,000/- (Rs. Fifteen Lacs only) on Shri 0m Prakash Jhunjhunwala. (v) I order confiscation of the dark blue coloured Strolley bag under Section 118 (b) and the wrappings of news paper and the polythene bag from which the bundles of foreign currencies were recovered in concealed from should not be confiscated and 119 of the Customs Act, 1962. (vi) I order release of the foreign currency i.e. 300 Euros, 770 UK Pounds, 2230 HR Dollars, 10 Kuwaiti Dinars, 10 US Dollars and 12,000 Irani Rials sized from M/s Monalisa Forex Services P Ltd. The same shall be adjusted against the penalties imposed against Shri Satish Chaudhary and Om Prakash Jhunjhunwala. (vii) I order release of the foreign currency i.e. 75 UAE Dirhams and 100 Baisa of Central Bank Oman seized from the residence of Shri Pankaj Jhunjhunwala. The same shall be adjusted against the penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by asking why penalty should not be imposed against Shri PKJ. The show-cause notice was also issued to Shri Satish Choudhary and Shri Om Prakash Jhunjhunwala ( Shri OPJ in short) both co-accused. The show-cause notice was adjudicated and impugned order was passed. Aggrieved with the impugned order, the appellants are before us. 3. Heard both sides. 4. Shri A.M. Sachwani, Advocate, learned Counsel appearing on behalf of Shri PKJ submitted that the appellant is a non-resident Indian National working in Dubai with M/s. Mohammed Essa Al Marri Trading LLC, Dubai. His employer is in the business of importing readymade garments from India. Accordingly, the appellant had come to India on 08.09.2003 for the purchase of the garments. When the appellant landed in India he declared the said 70000 US $ in the CDF bearing No.18155 dated 08.09.2003 as per the provisions of FEMA, 1999. The appellant made inquiries in the local market and found the goods are not as per their requirement, therefore, he left India leaving behind these 70000 US $ in India but took away the CDF with him. The said 70000 US$ were being carried by the appellant on 22.02.2004 which were seized by the Customs autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement cannot be relied upon. Hence, the impugned order is in violation of principles of natural justice, so the same is liable to be set aside. 4.1. He further relied on the decision in the case of Vashdev Gobindram Adnani vide order No.A/185/08/WZB/CSTB/C-II dated 01.11.2007 wherein also the case of carrying of foreign currency which was denied by the appellant and on search it was observed that the appellant was having foreign currencies and having CDF issued by the Customs and in similar set of facts, the order of confiscation of foreign currencies and imposition of penalty was set aside. He also relied upon the decision in the case of Union of India Vs. Zohan Taherali Dalal - 2010 (257) ELT 209 (Bom.). 4.2. Shri S Agarwal, learned Advocate appearing on behalf of Shri Satish Chaudhary, co-accused and M/s. Monalisa Forex Services Pvt. Ltd. submitted that the show-cause notice has been issued to the appellant on the basis of allegation that the appellant Shri Satish Chaudhary, was having nexus improper exporting of the foreign currency through Shri PKJ. He further submitted that the appellant has categorically and consistently denied the allegation against him regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er was admittedly Shri Pankaj K Jhunjhunwala who claims that he has not taken back to abroad, the currency declared in CDF on any earlier occasion. No-where in the law it is required that the foreign currency brought under CDF, if not encashed, shall necessarily be carried back on the very first departure from the country. It is also not shown as to how the amounts confiscated or held as liable for confiscation were in any manner connected with the advance payment in respect of Shri JBS Bakshi of M/s. Taj Exim International. He further submitted that no cogent evidence is on record to prove the smuggling of US Dollar 3,50,000 on earlier trips prior to the date of seizure. There is no cogent evidence connecting the appellant for confiscation of the foreign currency. The observation of the adjudicating authority has no where proved was de facto owner of M/s. Mohammed Essa Al Marri Trading LLC, Dubai and with active connivance or aiding and/or abetting to sustain any penalty on the appellant. 4.3 There is no finding in the impugned order except retracted statement of Shri PKJ. There was no cogent evidence brought on record to show the involvement of the appellant in any manner in g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri V.K. Singh, learned A.R appeared on of the Revenue and strongly opposed the contentions raised by the learned Advocates and supported the impugned order. The learned A.R. further submitted that in this case the currency was seized from the checked-in baggage of Shri PKJ at the time when he was about to board the flight. The CDF was also in the checked-in baggage. Therefore, the intention to smuggling the foreign currency is very much clear from the act of Shri PKJ and when the statement was recorded Shri PKJ stated the truth before the Panchas and he named Shri Satish Choudhary (who delivered this foreign currency) to Shri PKJ to be delivered at Dubai to the employer of Shri PKJ who is not other than the relative to Shri Satish Choudhary. Moreover, during the investigation it has been admitted by Shri PKJ that on earlier occasions also, he used to carry the currency of USD 70,000/- without producing the CDF before the Customs authorities. 5.1 The learned A.R further submitted that Shri PKJ admitted his guilt in the subsequent statement recorded on 5 th March 2004 and 18 th March 2004. He also submitted that in the case of Shri Krishnaswamy Govindan Vs Commissioner of Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lier occasions also, he had smuggled foreign currency of 70000 USD each time and the said currency is liable for confiscation. In fact, the said currency is not available at all. Therefore, confiscation of the same does not arise on the basis of probability. Accordingly, the order of confiscation of 3,50,000 USD is set aside. Shri PKJ is a Non-Resident Indian national and eligible to carry foreign currency with him and, therefore, absolute confiscation is not required. As it has been held that foreign currency of USD 70000 is held liable for confiscation, the same may be redeemed on payment of redemption fine for the violation of provision of Section 113(d) of the Customs Act and could be redeemed on payment of redemption fine of ₹ 5,00,000/-. As the foreign currency was held liable for confiscation, therefore he is liable for the penalty under Section 114(i) of Customs Act, 1962. Accordingly the penalty of ₹ 4,00,000/- is confirmed on Shri PKJ. (c) As discussed above there is no cogent evidence for confiscation of US$ 3,50,000 as the same has been held on the basis of preponderance of probabilities and no cogent evidence is available, therefore penalty of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the basis of his statement. In the statement he has stated that advance payment were received only through banks and the cash brought by Shri PKJ was for some other purpose, nature of which could be given by Shri Satish Choudhary only. As the findings are on the basis of statement of other and in the case of D. Bhoormal (supra) the hon ble apex has held that in case of penalty, the department has to prove that the person proceeded against was concerned with the smuggling or not. As the department has failed to establish that Shri OPJ was connected with the alleged smuggling of foreign currency, therefore no penalty is imposable on Shri CPJ. Therefore, the penalty on Shri OPJ is dropped. 7.3 M/s. Monalisa Forex Services P. Ltd. As the adjudicating authority has held that the foreign currency seized from Monalisa Forex Services Pvt. Ltd. is not liable for confiscation. However, M/s. Monalisa Forex Services Pvt. Ltd. is no where connected with Shri PKJ. Therefore, the foreign currency seized from Monalisa Forex Services Pvt. Ltd. cannot be adjusted against dues of other co-appellants. Accordingly, the adjustment of the foreign currency seized from M/s. Monalisa Forex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rised person may send out of India foreign currency acquired in normal course of business. (2) any person may take or send out of India, (i) Chegues on currency account maintained in accordance Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2000; (ii) foreign exchange obtained by him by drawl from an authorised person in accordance with the provisions of the Act or the rules or regulations or directions made or Issued thereunder; (iii) currency in the safes of vessels or aircrafts which has been brought into India or which has been taken on board a vessel or aircraft with the permission of the Reserve Bank; (3) any person may take out of India,- (i) foreign exchange possessed by him in accordance with the Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2000; (ii) unspent foreign exchange brought back by him to India while returning from travel abroad and retained in accordance with the Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2000: (4) any person resident outside India may take out of India unspent foreig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al in the case of Salim M, Mamdani Vs. Commissioner of Customs (Airport), Mumbai - 2007 (217) ELT 94 (Tri. - Mumbai) upheld the absolute confiscation of foreign currency attempted to be smuggled into/out of India and held that such absolute confiscation is justified. Following these decisions, I am of the view that absolute confiscation or the foreign currency of US $ 70000 in this case is justified. 11. The second issued relates to exoneration of Shri Satish Choudhary from all penal consequences. This exoneration has been done on the ground that there is no confessional statement by Shri Satish Choudhary recorded under Section 108 of the Customs Act and imposition of penalty has been done by the adjudicating authority only on presumption that Shri Satish Choudhary was involved in the act of smuggling of foreign currency along with Shri Pankaj Kishore Jhunjhunwala, without any avidence. 11.1 I beg to differ with this view taken by the learned Member (Judicial). 11.2 In the statement dated 21.03.2004, Shri Satish Choudhary has clearly admitted that he was running the business of travel agency and foreign exchange dealer in the name of M/s Awin Exim Co. Ltd., and M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Satish Choudhary's residence along with Customs Declaration Form. Further, Shri Om Prakash Jhunjhunwala, business partner of Shri Satish Choudhary, in his statement recorded on 15.4.2004, had stated, when a query was put to him as to who gave the foreign currency to Shri Pankaj K. Jhunjhunwala on 22.2.2003, that Shri Satish Choudhary could answer this. All these corroborative evidences available on record clearly indicates the involvement of Shri Satish Choudhary in the illegal export of foreign currency and, therefore, it is incorrect to say there is no corroborative evidences against Shri Satish Choudhary. 11.3 The Hon'ble Apex Court in the case of Naresh J. Sukhawani Vs. Union of India - 1996 (83) ELT 258 (SC.) held that statement of co-accused can be used as a substantive evidence connecting the accused with contravention of illegal export of foreign exchange. A similar view was taken by the Hon ble High Court of Bombay in the case of Sunil Pandey Vs. Customs - 2007 (218) ELT 512 (Del.) wherein it was held there is no absolute bar about the use of confessions of a co-accused in proceedings relating to offences under the Customs Act, 1962. Again, this Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued to Shri Pankaj Jhunjhunwala, Shri Om Jhunjhunwala and Shri Satish Choudhary, proposing inter alia confiscation of foreign currency of- (i) USD 70,000 (INR 31,11,500/-) seized from Shri Pankaj Jhunjhunwala, under section 113(d), (e) (h) of the Customs Act, 1962, read with section 6(3)(g) of FEMA, 1999 and the Regulations made there under, (ii) US $ 3,50,000 equivalent to approximately ₹ 1,57,50,000/- allegedly smuggled out during past 5 visits, though physically not available, u/s 113(d), (e) and (h) ibid. (iii) foreign currency i.e. 30 Euros, 770 UK Pounds, 2230 HK dollars, 10 Kuwaiti Dinars, 10 US dollars and 12000 Irani Rials fake US $400 seized from the premises of M/s. Monalisa Forex Services Pvt. Ltd., u/s 111 (d) ibid, (iv) Foreign currency i.e. 75 UAE Dirhams. and 100 Baisa of Central Bank Oman seized from the residence of Shri Pankaj Jhunjhunwala, u/s 111(d) ibid, 2. In Adjudication, vide the impugned Order, the adjudicating inter alia directed - (a) absolutely confiscating of the foreign currency amounting to US $ 70000 seized from the possession of Shri Pankaj Jhunjhunwala under Section 113(d), (e) (h) of the Customs Act, 1962 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to absolute confiscation or not? (b) Whether in the facts and circumstances of the case, US $ 70000 seized from Shri Pankaj Kumar Jhunjhunwala is liable for confiscation and can be released on payment of redemption fine or not? (c) Whether in the facts and circumstances of the case penalty can be imposed on Shri Satish Choudhary or not? The first two issues are interlinked. Member (J) has held the foreign currency amounting to US $ 70000 seized from the possession of Shri Pankaj Jhunjhunwala is liable for confiscation, but has permitted redemption thereof on payment of redemption fine of ₹ 50,000/-. The Member (T) however has maintained absolute confiscation of the said seized foreign currency. Thus, so far as the confiscation of this foreign currency amounting to US $ 70000 seized from the possession of Shri Pankaj Jhunjhunwala is concerned, both the Members found the same as liable to confiscation. The real issue is only whether the same shall be absolutely confiscated as held by Member (T) or can be permitted to be redeemed on payment of redemption fine as held by Member (J). 8. On the third issue, Member (J) exonerated Shri Satish Choudhary on find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dents the issue whether in the context of Section 125, the definition of 'prohibited goods' under Section 2(33) is applicable or not, was not the question. Hon'ble Andhra Pradesh High Court in Shaikh Jamal Basha Vs. GOI, 1997 (91) ELT 277 (AP), after considering both Section 111 as well as scheme of section 125 in a case of concealment was pleased to hold that attempt to import gold un-authorisedly will 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 whose import is prohibited but no such option is available in respect of goods which can be imported, but because of the method of importation adopted, become liable for confiscation. Hon'ble Madras High Court in T Elavarasan, 2011 (266) ELT 167 (MAD HC) = 2011-TIOL-762-HC-MAD-CUS , was pleased to rely on the said judgment of Hon'ble Andhra Pradesh High Court and held that an option has to be given to the petitioner to pay the applicable customs duty and the redemption fine and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ohibited' is construed as to apply in respect of every violation of any regulation or restriction or statutory procedural requirement, the word 'shall' in said section would be rendered redundant and meaningless. In the context of the statutory provisions of section 125, so as to give a meaningful application to both words 'may' and 'shall C used in the said section, the definition of 'prohibited goods is inapplicable by application of settled principles of statutory interpretation as held in Ramesh Mehta Vs Sanwal Chand Singhvi, (2004) 5 SCC 409 . Under section 125 of the Customs Act, unless the importation or exportation of goods is expressly prohibited , the Adjudication Authority is obliged to offer to the Owner the goods an option to pay fine in lieu of confiscation. Since the import of 'cut and polished diamonds' is not expressly prohibited under Section 11 of the Customs Act, 1962 or by any other statutory notification, we find merit in the ground that an option to redeem them on payment of fine in lieu of confiscation was mandatory . . 12. The aforesaid view taken by the Tribunal was not challenged by the Revenue. Moreover, the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 997 (91) ELT 277 (AP), wherein after considering both Section 111 as well as scheme of Section 125 in a case of concealment the High Court was pleased to hold that attempt to import gold un-authorisedly will 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 whose import is 'prohibited' but no such option is available in respect of goods which can be imported, but because of the method of importation adopted, become liable for confiscation. Hon'ble Madras High Court in T Elavarasan, 2011 (266) ELT 167 (MAD HC) = 2011- TIOL-762-HC-MAD-CUS was pleased to rely on the said judgment of Hon'ble Andhra Pradesh High Court and held that an option has to be given to the petitioner to pay the applicable customs duty and the redemption fine and to get the gold jewellery released, as per Section 225 of the Customs Act, 1962. In the context of Section 125 if the word prohibited is construed as to apply in respect of every violation of any regul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the third issue is concerned, I concur with the view taken by the Member (J) for the following reasons- (i) It is admitted position that Shri Pankaj Jhunjhunwala, who in his first statement alleged that the foreign currency was given by Shri Satish Choudhary, retracted his statement on the first available opportunity. (ii) His retracted statement was at variance with his submissions made in judicial proceedings such as his Writ Petition No.834 of 2004 filed before Hon ble Bombay High Court, retraction filed before Ld. Addl. Chief Metropolitan Magistrate, Esplanade, Mumbai, and even with his subsequent statement u/s 108. He was in fact claiming seized foreign currency even in reply to the Show Cause Notice. (iii) In submissions dated 28.9.2007, his cross-examination was sought by Shri Satish Choudhary with brief reasons for the same, which was denied. (iv) Such retracted oral statement not subjected to cross examination cannot be accepted as gospel truth when contrary versions are also available on record in light of the ratio laid down by the Hon'ble Supreme Court in Shalimar Rubber Industries, 2002 (146) ELT 248 (SC). (v) Shri Satish Choudhary in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s such. 38. In Mohtesham Mohd. Ismail v. Spl. Director, Enforcement Directorate Anr. [(2007) 8 SCC 254], this Court held : 15. Apart therefrom the High Court was bound to take into consideration the factum of retraction of the confession by the appellant. It is now a well-settled principle of law that a confession of a co-accused person cannot be treated as substantive evidence and can be pressed into service only when the court is inclined to accept other evidence and feels the necessity of seeking for an assurance in support of the conclusion deducible therefrom. [See Haricharan Kurmi etc. v. State of Bihar AIR 1964 SC 1184; Haroom Haji Abdulla v. State of Maharashtra AIR 1968 SCC 832; and Prakash Kumar v. State of Gujarat (2007) 4 SCC 266]. 16. We may, however, notice that recently in Francis Stanly @ Stalin v. Intelligence Officer, Narcotic Control Bureau, Thiruvanthapuram (2006) 13 SCC 210, this Court has emphasized that confession only if found to be voluntary and free from pressure, can be accepted. A confession purported to have been made before an authority would require a closure scrutiny. It is furthermore now well-settled that the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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