Philip Fernandes Vs. Commissioner of Cus. - Court Judgment

Excerpt:
2. in the impugned order, the commissioner has ordered confiscation under section 113 of foreign currency equivalent to rs. 86.44 lakhs, which was seized from the possession of the appellant when he was returning to dubai from mumbai on 15-3-1998. the commissioner accepts that the appellant had brought this currency with him when he came to mumbai from dubai on 11-2-1998. he accepts the explanation and evidence tendered to him in support that the appellant obtained the majority part of the currency in exchange for uae dirham from thomas cook al rostamani at dubai, and also agrees that the remaining amount was legitimately obtained by him at dubai. he has however found the currency liable to confiscation as it was not declared when it was brought into india and "his taking lenient view" permitted redemption of the currency on payment of rs. 10 lakhs subject to this credited to his nre account and imposed penalty of rs. 5 lakhs.3. in our view, once the commissioner accepts that the appellant brought in the currency into india, the penalty and fine are excessive.there was no liability of these goods to payment of duty. their import was not prohibited subject to restriction. the only lapse on the appellant's part was the failure to declare in the currency declaration form, a measure that is intended to prevention and detection of smuggling of foreign exchange. the appellant took out the currency that he brought in.4. on these facts therefore, we set aside the penalty imposed on the appellant and reduce the redemption fine from rs. 10 lakhs to rs. 1 lakh.

Judgment:
2. In the impugned order, the Commissioner has ordered confiscation under Section 113 of foreign currency equivalent to Rs. 86.44 lakhs, which was seized from the possession of the appellant when he was returning to Dubai from Mumbai on 15-3-1998. The Commissioner accepts that the appellant had brought this currency with him when he came to Mumbai from Dubai on 11-2-1998. He accepts the explanation and evidence tendered to him in support that the appellant obtained the majority part of the currency in exchange for UAE Dirham from Thomas Cook Al Rostamani at Dubai, and also agrees that the remaining amount was legitimately obtained by him at Dubai. He has however found the currency liable to confiscation as it was not declared when it was brought into India and "his taking lenient view" permitted redemption of the currency on payment of Rs. 10 lakhs subject to this credited to his NRE account and imposed penalty of Rs. 5 lakhs.

3. In our view, once the Commissioner accepts that the appellant brought in the currency into India, the penalty and fine are excessive.

There was no liability of these goods to payment of duty. Their import was not prohibited subject to restriction. The only lapse on the appellant's part was the failure to declare in the currency declaration form, a measure that is intended to prevention and detection of smuggling of foreign exchange. The appellant took out the currency that he brought in.

4. On these facts therefore, we set aside the penalty imposed on the appellant and reduce the redemption fine from Rs. 10 lakhs to Rs. 1 lakh.