Custom, Excise & Service Tax Tribunal
Shri Fayaz Gulam Godil vs Commissioner Of Customs (C.S.I ... on 3 September, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI COURT No. II APPEAL No.C/329 & 330/11 (Arising out of Order-in-Original No.Commr./PMG/ADJN/12/ 2010-11 dated 28/03/2011 passed by Commissioner of Customs, C.S.I Airport, Mumbai) For approval and signature: Honble Mr. P.R. Chandrasekharan, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial) 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 :Seen of the Order? 4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================
Shri Fayaz Gulam Godil Shri Mustafa Kanthawala Appellants Vs. Commissioner of Customs (C.S.I Airport) Respondent Mumbai Appearance:
Shri.S.N.Kanthawala, Advocate for appellant Shri.S.Nathan, Dy. Comm. (AR) SDR, for respondent CORAM:
Honble Mr. P.R.Chandrasekharan, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial) Date of Hearing : 03/09/2014 Date of Decision : /09/2014 ORDER NO Per: P.R.Chandrasekharan
1. The appeals arise from Order-in-Original No.Commr./PMG/ADJN/12/ 2010-11 dated 28/03/2011 passed by Commissioner of Customs, C.S.I Airport, Mumbai. Vide the impugned order, the adjudicating authority has absolutely confiscated US $ 1,24,100 equivalent to Indian Rs.56,65,165/- from the baggage of Shri Gayaz Gulam Godil on 25/05/2010 at CSI Airport, Mumbai and also imposed a penalty of Rs.10.00 lakhs on Shri Mustafa Kantawala @ Kathawala for abetting the illegal export of foreign currency. Aggrieved of the same, the appellants are before us.
2. The Directorate of Revenue Intelligence had intelligence that three persons, namely S/Shri Fayaz Gulam Godil, Mukhtar Gulam Godil and Farhan Shekhani had smuggled to Hong Kong foreign currency concealed in their baggage . On 24/05/2010 these three persons were being deported back from Hong Kong. The said persons were intercepted by the DRI after crossing the Green Channel on their arrival from Hong Kong by Flight No.9W-76 on 25/05/2010. On examination, it was found that 1150 Nos. of US $ 100 denomination were concealed in shirts of Fayaz Gulam Godil. On personal search Shri Fayaz Gulam Godil he was found carrying US $ 3100 and the other two persons were found to carry US $ 3000 each. Therefore, the currency amounting to US $ 1,24,100 and the packages/articles used for concealing the currency were seized by the DRI under Panchnama proceedings. In the statements recorded from Shri Fayaz Gulam Godil, he submitted that the foreign currency were given to him as per the instructions of Shri Mustafa Kantawala @ Kathawala. He had gone to Hong Kong on 22/05/2010 but did not declare the foreign currency before the Customs authorities. The foreign currency of US $ 3000 each recovered from other two passengers, namely, Shri Mukhtar Gulam Godil and Farhan Shekhani were also given to Shri Fayaz Gulam Godil by one person on 22/05/2010 with the instructions that these currency should be handed over to one Shri Rauf on reaching Hong Kong. These persons were denied entry into Hong Kong and were deported back and on return they were intercepted after these three persons passed through Green Channel without declaration of any foreign currency. In his statement dated 25/05/2010 and 24/06/2010 Shri Fayaz Gulam Godil had admitted that he was working in Planet Telecom, 105, Shopper Plaza, Crawford Market, Mumbai, whose owner is Shri Mustafa Kantawala @ Kathawala and the said Shri Mustafa Kantawala @ Kathawala had instructed him to visit Hong Kong to deliver one parcel to Shri Rauf at Hong Kong. Shri Mustafa Kantawala @ Kathawala also asked him to take one or two of his relatives along with him so that he could carry memory cards while returning to India. Accordingly, he took Shri Mukhtar Gulam Godil and Shri Farhan Shekhani, who were his cousins/brothers and took the tickets for going to Hong Kong carrying the foreign currency to hand over to Shri Rauf. They were not allowed entry into Hong Kong and they were deported by Jet Airways Flight No.9W-0075 from Hong Kong to Mumbai. They were neither allowed to meet anyone nor were they allowed to go outside the immigration room and during the stay at Hong Kong Airport, their baggages were in their possession only. On arrival, they passed through the Green Channel; thereafter they were intercepted by the DRI officers who recovered the currency. From the mobile number of Shri Farhan Shekhani an SMS message was retrieved which read as Rauf coming at airport, give hand luggage to him and Shri Farhan Shekhani confirmed that the message was received by him from Shri Mustafa Kantawala @ Kathawala. Thereafter, Shri Fayaz Gulam Godil was arrested and produced before the Additional Chief Metropolitan Magistrate. Before the Court he retracted the statement given by him and he was placed under judicial custody and later, on 10/06/2010 he was granted bail. Thereafter his statement was once again recorded on 24/06/2010 wherein he reconfirmed his earlier statement recorded on 25/05/2010. He again retracted his statement for which rebuttal was sent. Based on the investigations conducted a show-cause notice dated 19/11/2010 was issued proposing to confiscate US $ 1,24,100 under the provisions of Section 113 (d), 113 (e) and 113 (h) of the Customs Act and for imposition of penalties on Shri Fayaz Gulam Godil, Shri. Mukhtar Gulam Godil, Shri Farhan Shekhani and Shri Mustafa Kantawala @ Kathawala. The said notice was adjudicated by the impugned order wherein the foreign currency was absolutely confiscated and a penalty of Rs.5 lakhs was imposed on Shri Fayaz Gulam Godil and a penalty of Rs.10 lakhs was imposed on Shri Mustafa Kantawala @ Kathawala.
3. The learned Counsel for the appellants submit that the currency was recovered when the passengers were returning from Hong Kong and therefore, the invocation of provisions of Section 113 of the Customs Act, 1962 would not arise at all as it is a case of import of currency and not export of currency and therefore, the impugned order is defective. Secondly, he argues that the statement relied upon by the Revenue with regard to the alleged act of smuggling has been retracted by Shri Fayaz Gulam Godil before the Magistrate on the first available opportunity and therefore, no reliance can be placed on the said statement and the evidentiary value of the said statement is non-existent. The amount of US $ 1,24,100 was actually received by Shri Fayaz Gulam Godil in Hong Kong in the Airport area and he intended to declare the said foreign currency at the time of arrival in India, but due to the nightmare of being deported back, he failed to declare the currency before the Customs authorities. Reliance is placed on the decision of the Honble Bombay High Court in the case of Rostam Parvaresh Vs. UOI 2010 (259) ELT 342 (Bom.) and Dhanak Madhusudan Ramji Vs. CC (Airport), Mumbai 2009 (237) ELT 280 (Tri-Mum) and Kishin Shewaram Loungani Vs. CC, ACC, Mumbai 2002 (140) ELT 225 (Tri-Mumbai) wherein it has been held that even if attempt to smuggle foreign currency is established, absolute confiscation is not warranted especially when the violations are technical in nature such as non-declaration of jewellery and foreign currency. It is also submitted that the adjudicating authority has not considered the various submissions made by the appellants and therefore, the impugned order is not sustainable in law.
4. The learned Deputy Commissioner (AR) appearing for the Revenue on the other hand strongly refutes the contention of the learned Counsel for the appellant. He submits that the Honble High Court of Madras in the case of S. Faisal Khan Vs. Jt. CC (Airport) Chennai 2010 (259) ELT 541 (Mad.) has upheld the absolute confiscation of foreign currency when the same was attempted to be smuggled out of country. The same view was followed by this Tribunal in the case of Harish Muljimal Gandhi Vs. CC, ACC, Mumbai 2013 (294) ELT 470 (Tri-Mumbai) wherein also absolute confiscation of Indian Currency sought to be taken out of India illegally was upheld. Similarly, in the case of CC (Air) Chennai Vs. Samynathan Murugesan 2009 (247) ELT 21 (Mad), the Honble Madras High Court upheld the absolute confiscation of gold ornaments attempted to be smuggled into India in violation of Import Control Order, 1955 and the Honble Apex Court in appeal upheld the absolute confiscation. A larger Bench of this Tribunal in the case of Peringatil Hamza, vide order No.M/1280/14/CSTB/C-I dated 23/06/2014, held that if the goods are prohibited they can be absolutely confiscated and it is the discretion of the proper officer to allow redemption, in case the circumstances warrant. In the present case the appellant had concealed the currency and they were passing through the Green Channel without any declaration before the Customs and therefore, the absolute confiscation is justified in the facts and circumstances of the case. Accordingly, he pleads for upholding the impugned order.
5. We have carefully considered the rival submissions.
5.1 As regards the submission that the provisions of Section 113 are not attracted inasmuch as the persons were intercepted and currency recovered when the passengers were returning from Hon Kong and therefore, it is an import transaction and hence, the impugned order is bad in law, this issue needs careful consideration. The facts of the case are not in dispute. Three passengers, namely, S/Shri Fayaz Gulam Godil, Mukhtar Gulam, Farhan Shekhani, proceeded to Hong Kong on 22/05/2010 carrying foreign currency amounting to US $ 1,24,100 without declaring the same before Customs authorities. However, they were not allowed entry into Hong Kong and were deported back and they arrived in India on 24/05/2010; therefore, it was not a case of successful export of foreign currency but an attempt to take out the foreign currency from India, which failed. It is also on record that the currency was concealed and was never declared to the Customs authorities. As per the provisions of Foreign Exchange Management Act, 1999 read with Foreign Exchange Management (Current Account Transaction) Rules, 2000, no person shall draw foreign exchange (a) exceeding US $ 10,000 or its equivalent in one calendar year for one or more private visits to any country (Except Nepal and Bhutan) (b) exceeding US $ 25,000 for business travel. Currency seized is in excess of these limits and therefore, the foreign currency seized are prohibited goods in terms of Section 2 (33) of the Customs Act which define prohibited goods as any goods, the import or export of which is subject to any prohibition under this Act or any other law. In the case of prohibited goods, as per Section 125, it is the discretion of the adjudicating authority to allow redemption or to resort to absolute confiscation. Therefore, there is no right of redemption provided in respect of prohibited goods. A larger Bench of this Tribunal had examined the issue at length in Peringatil Hamza case (supra) and after examining the various provisions of the Foreign Management Act and Rules made thereunder and the decisions of the Honble apex Court in the case of Sheikh Mohd. Omer Vs. CC, Calcutta & Others 1983 (13) ELT 1439 (SC) came to the conclusion that in the case of prohibited goods, the same can be absolutely confiscated and it is the discretion of the proper officer to allow redemption on payment of fine. It is an admitted position that the currency was illegally exported from India by concealing it in the baggage and considering the substantial quantum of currency seized, the adjudicating authority has come to the conclusion that this is not a case where discretion has to be exercised by allowing redemption of confiscated currency. This decision of the adjudicating authority does not call for any interference, especially when we consider the decision of the Honble Madras High Court in the case of Samynathan Murugesan (cited supra) affirmed by the Honble Apex Court and the decision in the case of S. Faisal Khan (supra). Therefore, the absolute confiscation of foreign currency cannot be found fault with. In these circumstances, the penalty of Rs.5 lakhs imposed on Shri Fayas Gulam Godil under Section 114 is justified. As regards the imposition of penalty on Shri Mustafa Kantawala, from the statements of Shri Fayaz Gulam Godil and the SMS message received by Shri Farhan Shekhani, it is clear that he had directed Shri Fayaz Gulam Godil to smuggle out the currency from India. Therefore, his abetment in smuggling out of foreign currency is clearly established. Therefore, imposition of penalty on him under Section 114 is justified. The penalty imposed of Rs.10 lakhs cannot be said to be excessive when the total value of the currency sought to be illegally exported is of the order of Rs.56 lakhs and the penalty imposed is less than 20% of the value of the currency.
6. In view of the above analysis, we do not find any infirmity in the impugned order. Accordingly, we reject the appeals as devoid of merits.
(Pronounced in Court on ) (Ramesh Nair) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) pj 1 10