COMMISSIONER OF CUSTOMS Vs. VEERACHI VITHAYAPHALERT AND CUSTOMS

JUDGEMENT

(1.) THIS appeal by the Revenue, is directed against the Final Order No. 681 of 2005, dated 28.04.2005, passed by the CESTAT. The first respondent is a foreign national, holding a Thailand passport and he was a passenger bound for Singapore by Singapore Airlines Flight on 14.03.2001 from Chennai. The officers of the DRI, Chennai Zonal Unit questioned the first respondent about the possession of foreign currency. The first respondent replied that he was having approximately US $ 20,000 in his hand baggage and he had not declared the same to the Customs Authorities. The first respondent further informed that he was having US $ 3310 in the form of Traveller's Cheque for which the endorsement has been made in his passport. On an examination of his baggage in the presence of the witnesses, it was found that the first respondent was carrying assorted foreign currencies approximately Rs. 13.95 lakhs and the same was recovered. A query was made to the first respondent about the carrying of foreign currencies, he appears to have stated that he brought the same for the purpose of his nephew's educational expenditure and for his miscellaneous expenditure in India and he does not possess any currency declaration form for the said currencies. Since the first respondent did not possess any valid documents for the illicit exportation of the foreign currencies, the same were seized under the provisions of the Customs Act. The Traveller's Cheques having been endorsed in the passport, were returned to the first respondent. In the statement given by the first respondent under Section 108 of the Customs Act, the first respondent accepted the offence pleaded for leniency and the matter may be finalised at the earliest by waiving the issuance of show cause notice and affording personal hearing. Further, the first respondent stated that he had not declared foreign currency at the time of arrival in Chennai Airport due to his carelessness and that the currency brought by him for the purpose of his nephew's school admission and to meet small expenses at various Airports during his business trips and he was working as General Manager of processing business in export of frozen shrimp from India to all over the world. The adjudicating authority, after considering the submissions made, ordered for absolute confiscation of currency under Section 113(d) and (h) of the Customs Act 1962, read with Section 6(3) of the Foreign Exchange Management Act, 1999, (hereinafter referred to as "FEMA"). Challenging the said order, the first respondent preferred appeal to the CESTAT.

(2.) THE Tribunal allowed the appeal by order dated 28.04.2005, by observing that as per law, there was no requirement to make a declaration at the time of leaving India about the possession of currency, and that the currency in possession of the first respondent was also within the limit permitted by Reserve Bank of India. Challenging the said order, the Revenue has filed the present appeal, which has been admitted on the following substantial question of law: -

(3.) THE learned counsel for the first respondent submitted that there is no power for the Customs authorities to invoke Section 113(d) and (h) of the Customs Act and the absolute confiscation is wholly illegal. It is further stated that there is no restriction provided for the purpose of taking out foreign currency and if at all proceedings could have been initiated under the provisions of the FEMA 1999, there is no power to absolutely confiscate the currency under the provisions of the Customs Act.