By TIOL News Service

MUMBAI, MAR 16, 2017: THE Commissioner of Customs, Airport, Mumbai, ordered absolute confiscation of 'foreign currency' consisting of USD and UAE Dirham equivalent to Rs.11,11,775/- for having been attempted to be illegally exported and imposed a personal penalty of Rs.1 lakh on the appellant, who was scheduled to depart by the Gulf Air flight on 25th December 2004 to Bahrain. Traveller's cheques in the possession of the appellant were released and the penalty imposed was ordered for recovery by encashment of traveller's cheques.

The adjudicating authority has held that the appellant had not declared that he was carrying foreign exchange; the appellant's claim of accumulation of foreign currency over the years was not acceptable in the absence any evidence to support it and that the purpose for which the currency was carried was not in accordance with law.

The Appellant is before the CESTAT and seeks the release of seized foreign currency as well as the setting aside of penalty on the ground that there was no admitted concealment;that amount was carried for travels and business purpose; that the foreign currency had been accumulated by him during various trips made by him to Dubai, Syria and Saudi Arabia and he was not aware of the requirement of surrender of unutilized foreign exchange.

The Bench observed -

"5. I find that there is no dispute that the appellant had indeed carried the said foreign currency. No evidence has been placed on record to show that declaration was necessary for carrying of foreign currency by a departing passenger or that his inability to explain the source of foreign currency would render it liable to confiscation under Customs Act, 1962. The finding in the impugned order of illegal purpose is not tenable as action in relation to illegal purpose, if any, is vested with the appropriate authority under the appropriate statutes other than Customs Act, 1962.

6. Customs Act, 1962 is concerned with the illegal importation into India and exportation out of the country. In the absence of any prescription requiring declaration of foreign currency taken out of the country I find no justification to sustain the impugned order."

The appeal was allowed.

In passing:

Export from & Import into India of Currency or Currency notes are governed by the Foreign Exchange Management (Export and Import of Currency) Regulations, 2000 which came into force w.e.f. 01.06.2000. Rule 6 is titled Import of foreign exchange into India & mentions about Currency Declaration Form (CDF) whereas Rule 7 pertains to Export of foreign exchange and currency notes. 

- Currency Declaration Counter: There is a specific customs counter for declaration of foreign exchange/currency in the arrival hall of CSI Airport. The Customs Officer issues a certificate in the form of Currency Declaration Form (CDF) in prescribed proforma after physically verifying the currency notes and travellers' cheques, etc.

(See 2017-TIOL-850-CESTAT-MUM)