Custom, Excise & Service Tax Tribunal
Harish Muljimal Gandhi vs Commissioner Of Customs, Acc, Mumbai on 22 February, 2012
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No. C/1077/08
(Arising out Order-in-Original No. CC/PMS/39/2008 ADJ.ACC dated 29.7.2008 passed by the Commissioner of Customs (Exports), ACC, Mumbai)
For approval and signature:
Honble Mr. Ashok Jindal, Member (Judicial)
Honble Mr. P.R. Chandrasekharan, Member (Technical)
1. Whether Press Reporters may be allowed to see No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the Yes CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy Yes
of the Order?
4. Whether Order is to be circulated to the Departmental Yes
authorities?
Harish Muljimal Gandhi
Appellant
Vs.
Commissioner of Customs, ACC, Mumbai
Respondent
Appearance:
Shri Harish M. Gandhi, Self for the appellant Shri Navneet, Addl. Comm (AR) for the respondent CORAM:
Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.R. Chandrasekharan, Member (Technical) Date of hearing : 22.02.2012 Date of decision : 22.02.2012 O R D E R No:..
Per: Mr. P.R. Chandrasekharan, Member (Technical) The appeal is directed against Order-in-Original No. CC/PMS/39/2008 ADJ.ACC dated 29.7.2008 passed by the Commissioner of Customs (Exports), ACC, Mumbai.
2. The facts arising for consideration in this case are briefly discussed below. Acting on intelligence, officers of the Special Intelligence and Investigation Branch (SIIB) of ACC, Sahar, Mumbai and Customs officers attached to Air port Sorting office (APSO), Mumbai detained 12 postal consignments intended for export to Dubai. Examination of the said consignments in the presence of intelligence witness revealed that the consignment contained Indian currency of denomination Rs.500 each and totally contained an amount of Rs.11,50,000/-. Different names of consignor and consignee were declared in the documents. As export of Indian currency is prohibited in terms of Section 11 and Section 82 of the Customs Act read with RBI Notification no. FEMA 6 RB-2000 dated 03.05.2000, the said currency was seized under a panchnama dated 29.8.2007. The newspaper pieces in which the currency was rapped indicated name and address of Mrs. Kanchan Gandhi, Flat no. 4, Wing A Bldg no. 17, Navjivan Society, M.G. Nagar, Chembur, Mumbai 74 and the said premises was searched by SIIB officers along with income tax officers and certain incriminating documents were recovered. On 30.8.2007, the customs officers again intercepted two more consignments intended for export to Dubai containing Indian currency valued at Rs.2 lakhs. Further on 31.8.2007 the officers again intercepted 11 more consignments at the APSO intended for export to Dubai containing Indian currency Rs.11.3 lakhs. These currencies were also seized under panchnama dated 30.8.2007 and 31.08.2007 respectively. Summons were issued to Shri Vinay Harish Gandhi, son of Shri Harish Muljimal Gandhi, who in his letter dated 10.09.2007, admitted that the names mentioned on the envelopes as consignees/addresses are close relatives of Shri Harish Muljimal Gandhi. On 10.09.2007, Shri Harish M. Gandhi reported to SIIB and a statement under Section 108 of the Customs Act was recorded. In the said statement Shri Harish M. Gandhi, interalia, admitted that the Indian currency amounting to Rs.24.8 lakhs belonged to him and had been packed and despatched by him through various post offices in Mumbai. Based on further investigation conducted in the matter, a show-cause notice dated 21.2.2008 was issued to Shri Harish M. Gandhi proposing to confiscate Rs.24.8 lakhs seized under the provisions of section 113(d) and (e) of the Customs Act, 1962 read with RBI Notification no. FEMA 6 RB-2000 dated 03.05.2000 issued under Section 6 read with Section 47 of the FEMA 1999. The show-cause notice also proposed to impose penalty on Shri Harish Gandhi under Section 114 (i) of the Customs Act, 1962. The case was adjudicated vide the impugned order and the Indian currency of Rs.24.8 lakhs was absolutely confiscated and a penalty of Rs.10 lakhs was imposed on Shri Harish Gandhi. Hence the appellant is before us against the said order.
3. Shri Harish Gandhi appeared personally for hearing and submitted that he had undertaken the above said exports and as the currency belonged to him, he prayed for release of the currency confiscated and also for leniency in the matter.
4. The ld. Addl. Commissioner (AR) for the revenue, on the other hand, reiterated the findings of the adjudicating authority and prayed for upholding of the order of the adjudicating authority. The ld. AR submitted that export of Indian currency in excess of Rs.5000/- is prohibited under the provisions of Section 3B of the Foreign Exchange Management Act, 1999 and the Reserve Bank of India has issued a Notification no. FEMA 6 RB-2000 dated 03.05.2000 wherein only Indian currency amounting to Rs.5000/- can be exported by a person going out of India. Any amount in excess thereof requires permission from the Reserve Bank of India and in the instant case the appellant has not obtained any such permission. The said Notification has been issued by the Reserve Bank of India in exercise of the powers confirmed by Clause (g) of sub-section (3) of Section 6 and sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999. Therefore, export of currency is prohibited. The Ld. AR points out that as per definition under Section 2(22) of the Customs Act, 1962 goods includes currency and negotiable instruments and as per Section 2(33), prohibited goods means any goods, the import or export of which is subject to any prohibition under this Act or any other law for which time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be export or imported have been complied with. The Ld. AR submits that in the instant case, the appellant has not obtained any permission from the Reserve Bank of India or any authority for export of foreign currency in excess of Rs.5000/- as required under the law. Therefore, in terms of Section 82 of the Customs Act read with Section 11 of the said Act, the goods under export are prohibited goods and accordingly, the goods are liable to confiscation under the provisions of Section 113(d) and (e) of the Customs Act, 1962. Inasmuch as the goods are prohibited, in terms of Section 125(1) of the Customs Act, the officer adjudicating the case can absolutely confiscate the prohibited goods and therefore, absolute confiscation ordered by the adjudicating authority is valid and correct in law. He also relies on the judgement of this Tribunal in the case of Salim M. Mamdani vs. CCE [2007 (270) ELT 94] and the judgement of the Hon'ble High Court of Madras in the case of S. Faizal Khan vs. Jt.Commr. of Cus reported in 2010 (259) ELT 541 in support of his above contentions. Accordingly, he pleads for upholding the order in toto.
5. We have carefully considered the rival submissions. As per the Reserve Bank of India Notification no. FEMA 6 RB-2000 dated 03.05.2000 cited supra any person resident in India cannot take outside India, Indian currency notes exceeding Rs.5000/- and the said Notification has been issued under Sections 6 and 47 of the FEMA. In the instant case it is seen that the appellant has tried to illegally export Indian currency exceeding Rs.5000/- through post. As per Section 2(22) read with 2(33) of the Customs Act, 1962, the goods under export in the instant case are prohibited goods and therefore, they have been rightly confiscated under provisions of 113(d) and 113(e) of the Customs Act. Further under Section 125(1) of the said Act, in respect of prohibited goods, the officer adjudicating the issue can absolutely confiscate the goods. In the S. Faizal Khan case cited supra, the Hon'ble High Court of Madras held that Indian currency which has been admitted to be exported illegally is liable for absolute confiscation. Similarly, in the case of Salim M.Mamdani case decided by this Tribunal, this Tribunal upheld the absolute confiscation of Indian currency admitted to be exported illegally under provisions of Section 113(d) of the Customs Act. The ratio of these decisions apply squarely to the facts of the present case and accordingly, we uphold the absolute confiscation of Indian currency amounting to Rs.24.8 lakhs under the provisions of 113(d) and (e) of the Customs Act adjudged in the impugned order. As regards the penalty imposed on the appellant Shri Harish M. Gandhi, in view of the fact that the currency which he tried to export illegally has been absolutely confiscated, the penalty of Rs.10 lakhs imposed on him would be harsh. Accordingly, we reduce the penalty on the appellant Shri Harish Gandhi from Rs.10 lakhs to Rs.1 lakh.
6. The appeal is disposed of in the above terms.
(Operative part pronounced in Court) (Ashok Jindal) (P.R. Chandrasekharan) Member (Judicial) Member (Technical) SR 7