By TIOL News Service

MUNBAI, JULY 20, 2016: THE appellant, a passenger departing from the country, was found to be carrying Indian currency amounting to Rs 34,50,000/- concealed in packs in hand-baggage.

At the initial stage of investigation, the appellant had claimed to be a carrier on behalf of another individual but controverted this assertion in later statements as well as in submissions before adjudicating authority.

The currency was confiscated u/s 113 and penalty was imposed u/s 114(1) of the Customs Act, 1962. However, no option was given to redeem the currency.

Before the CESTAT, the appellant submitted that, although in accordance with section 125 of the Customs Act, 1962 which deals with the confiscated goods, discretion is vested in the adjudicating authority in relation to prohibited goods which, admittedly, the export of Indian currency is, the non-exercise of such discretion should necessarily be justified in the adjudication order. Reliance is placed on the decision in Peringatil Hamza - 2014-TIOL-1434-CESTAT-MUM.

The AR cited the following decisions in support of the recourse to absolute confiscation by the original authority viz. Harish Muljimal Gandhi - 2012-TIOL-2050-CESTAT-MUM; Siddhick Vayalilakath @ Siddique - 2007-TIOL-482-CESTAT-MAD.

The Bench, while distinguishing the decisions cited, observed -

++ it is seen that the original authority has discussed at length about the ambivalence of the passenger in relation to ownership of the confiscated Indian currency. Moreover, it is also seen that the impugned order has considered it necessary to examine the implication of the allegation against the appellant.

++ it cannot, therefore, be concluded that lack of ownership was the sole ground for non-exercise of the discretion to allow redemption on payment of fine. Section 125 of the Customs Act, 1962,is, in fact, unambiguously clear in granting discretion to the confiscating authority to allow redemption on payment of fine if the goods are prohibited. Undoubtedly, the export of Indian currency is prohibited. Notwithstanding the veracity of the claim of the appellant to be the owner of the currency, there is no valid legal ground for an individual to carry Indian currency out of the country. These are not accepted for transactions anywhere in the world. The purpose of taking out such currency could be for manifold reasons with none of them skirting the fringes of legality. This point is clearly alluded to in the impugned order.

Holding that the exercise of discretion by the original authority cannot be faulted on legal, procedural or logical grounds, the impugned order of absolute confiscation was upheld and the appeal was dismissed.

(See 2016-TIOL-1792-CESTAT-MUM)