SH. T. SOUNDRARAJAN Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) ON 22.11.2005, Shri T. Soundararajan, a passenger bound for Singapore by Indian Airlines Flight No. IC -555 had been intercepted at the International Airport, Chennai by the officers of Customs. The passenger, on enquiry as to whether he possessed any foreign currency in his baggage, had replied in the negative. On the examination of the baggage of the passenger, the officers recovered foreign currency of value Rs. 24,54,580/ -and Indian currency value of Rs. 32,500/ -. These were seized as the passenger had not declared them and had concealed them in his baggage. In the statement recorded from him immediately after seizure, Shri T. Soundararajan deposed that he had made three visits to Vietnam in 2004 and 2005 and had not brought back any foreign currency. He had bought 53,000 US from various persons in and around his native town and had decided to carry the currency to partfinance purchase of used excavators with unaccounted money as desired by their foreign suppliers. He had raised the required funds to buy foreign currency by taking loan from M/s. Jayapria Financiers, Neyveli. He did not have any documents to prove the licit acquisition of foreign and Indian currencies. The appellant was arrested. An Advocate representing the appellant wrote to the Commissioner retracting the above deposition by Shri T. Soundararajan and stated that the currencies had been obtained through legal channels; that they were unspent foreign currencies he (Soundararjan) had acquired during his visits abroad for services rendered there. He also stated that his client was entitled to carry upto US35,000 and as a business man on his journey abroad. Shri T. Soundararajan did not have any bad antecedents and initial statement given was not voluntary. Article 7(2) of Foreign Exchange Management (Export and Import of Currency) Regulations, 2000 did not prescribe a maximum amount to be exported by a person resident in India. There was no limit provided for export of foreign currencies. The Commissioner replied to the Advocate citing the details from the voluntary deposition obtained from Shri T. Soundararajan confessing that he had been trying to smuggle out currency for purchase of impending imports of used excavators. On 13.2.06 Shri T. Soundararajan appeared before the Superintendent of Customs and gave further statement wherein he reiterated his initial deposition. In reply to the Show Cause Notice the version given by the appellant's the Advocate Shri A. Ganesh was reiterated. Adjudicating the Show Cause Notice issued in the wake of seizure of Indian/foreign currencies which had been kept concealed in the baggage of Shri T. Soundararjan and not declared to the customs authorities, the Commissioner found that Shri T. Soundararajan had attempted to smuggle out Indian currency and foreign currencies concealing the same in his baggage in contravention of Sections 77 and 79 of the Customs Act and provisions of Foreign Trade Policy 2004 - 09, Foreign Trade (Development and Regulations) Act, 1992 and Foreign Exchange Management Act, 1990. Shri T. Soundararajan had acquired foreign currencies illegally. Following the above findings the Commissioner ordered absolute confiscation of foreign currency of US 53,500 equivalent to of Rs. 24,54,580/ - and Indian currency of Rs. 32,500/ - under Section 113(d), (h) and (i) of the Customs Act, 1962 and confiscated the articles found to have been used to conceal the currencies under Section 119 of the Custom Act. He also imposed a penalty of Rs. 2,50,000/ - on Shri T. Soundararajan under Section 114 of the Act.

(2.) IN this appeal, the appellant Shri T. Soundararajan has challenged the above order of confiscation of foreign currency and Indian currency and the penalty of Rs. 2,50,000/ - imposed on him. In the appeal the appellant has endeavoured to explain that export of foreign exchange is permissible and not prohibited as per Regulations 7(2) and 7(3) of Foreign Exchange Management (Import and Export of Currency) Regulations, 2000. As per Regulations 7(2) (supra) there was no limit for export of foreign currency. Circular A.P. (F.L. Series) Circular No. 1 dated June 1, 2000 permitted authorized agents to release foreign exchange not exceeding US 5000 or its equivalent per person, in one calendar year for one or more private visits and not exceeding US 25,000/ - or its equivalent for business travel to countries other than Nepal and Bhutan. As per the said Circular it was not mandatory for authorized persons to endorse the amount of foreign exchange sold for the purpose on the passport of the passenger. Absence of any endorsement on the appellant's passport did not mean that he had not obtained foreign currency from an authorized dealer. The appellant was on his way to a foreign country for business purpose i.e. purchase of earthmovers. The lower authority ought not have confiscated the currencies absolutely for non -declaration, as foreign currencies were not prohibited goods. It was also submitted that the currencies were not concealed and that the confiscated currencies should have been allowed to be redeemed. Several case laws were cited in support of his plea that it was mandatory for the adjudicating authority to allow the impugned goods to be redeemed on payment of fine.

(3.) HEARD both sides. We have considered grounds raised in the appeal against the impugned order and the oral submissions made by both sides. In the statement recorded immediately after seizure of the impugned currencies, the appellant had admitted that the currencies had not been acquired through legal means; that he had intended to pay the same to the supplier of excavators he intended to purchase without showing part of the value in the invoice. This account was repeated in the subsequent statement recorded from him by the officers. These statements recorded under Section 108 of the Customs Act have evidentiary value. The fact of seizure of currencies from the baggage is not disputed. The mahazar shows that the currencies had been concealed. Therefore, the finding of the Commissioner that the impugned currencies are liable for confiscation under Section 113(d), (h) and (i) of the Customs Act deserve to be sustained.