Ram Kumar v. Commissioner of Customs

2. Learned counsel for the applicant relied upon Section 125 of the Customs Act, 1962 (Act, for short), which reads as under:- “SECTION 125. Option to pay fine in lieu of confiscation. – (1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit: Provided that, without prejudice to the provisions of the proviso to sub-section (2) of section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon. (2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1), the owner of such goods or the person referred to in sub-section (1), shall, in addition, be liable to any duty and charges payable in respect of such goods.”

3. It is highlighted that by amendment inserted by way of Act No. 80 of 1985, the Legislature had incorporated the words “or, where such owner is not known, the person from whose possession or custody such goods have been seized” would have an option to pay fine in lieu of confiscation of such goods. Another submission raised by the petitioner is that he is the owner of the foreign currency, i.e. 21,900/- UAE Dirham (about Rs.3.67 lacs as per present exchange rate) and Rs.19,80,000/- in cash, which were recovered and seized from his wallet and his baggage, respectively, by the Customs‟ authority at the Indira Gandhi International Airport, Delhi, while going to Dubai. The applicant had boarded the flight from Jaipur.

4. In order to appreciate the contention, we would like to reproduce in brief the relevant facts and the findings recorded by the Revisionary Authority. (a) The applicant had boarded the Indian Airlines flight from Jaipur to Dubai via Delhi but was asked to de-board at Delhi and his baggage was unloaded. Upon search, Indian currency of Rs.19,80,000/- and 21900/- UAE Dirham were recovered. (b) On 3rd November, 2009, the applicant was arrested and his statement under Section 108 of the Act was recorded. He admitted that Vinod Kumar Saini and Tulsi Ram had given him the said currency with the direction to deliver the aforesaid amount to one Rakesh, who would collect the money from him at Dubai.

(c) A show cause notice under Section 124 of the Act, dated 21st April,

2010 was issued to the applicant, proposing confiscation of the goods under Sections 113(b) and 113(h) and for imposition of penalty under Section 114 of the Act.

(d) The petitioner then claimed that he is a semi-literate person, who had been working in Dubai for last 18 years and had brought his earnings to India. On 2nd November, 2009, he had decided to take his life savings back to Dubai with a view to start a new business. (e) He did not realise and know that for taking foreign currency and Indian currency out of India, prior permission from the Reserve Bank of India was needed and mandated.

5. The applicant contested the proceedings resulting in order-inoriginal dated 29th October, 2010 to be passed by the Additional Commissioner of Customs, Indira Gandhi International Airport, Delhi. The order-in-original directed confiscation of the currency under Sections 113(d) and 113(h) of the Act read with Foreign Exchange Management Act, 1999 and the Rules made thereunder. However, in exercise of power conferred under Section 125 of the Act, the adjudicatory authority gave an option to the applicant to redeem the currency seized on payment of fine of Rs.1,50,000/-. Penalty of Rs.2,00,000/- under Section 114 of the Act was imposed.

6. Revenue preferred an appeal before the Commissioner (Appeals), but it appears that the first appellate authority upheld the direction regarding the redemption of the currency on payment of fine of Rs.1,50,000/-. Copy of the grounds of appeal and the order passed by the Commissioner (Appeals) are not on record and were not filed with the writ petition.

6. Aggrieved, Revenue preferred a Revision petition before the Government of India under Section 129DD of the Act. The applicant also filed a Revision Petition. The Revision petition filed by the Revenue stands allowed vide order dated 9th October, 2011, holding inter alia, that the authorities had erred in allowing redemption of the currency as the applicant was a mere carrier of goods and the currencies did not belong to him.

7. Learned counsel for the applicant is right that in paragraph No.9 of the impugned order, the Joint Secretary to the Government of India has observed that the currencies did not belong to the applicant and the same were liable to be confiscated absolutely as there was no original owner of the goods. It is accordingly submitted, that amendment made to Section 125 of the Act would be applicable. However, if we read the entire reasoning given by the Joint Secretary to the Government of India, objectively and holistically, the position becomes clear. For the sake of clarity, we would like to reproduce paragraph Nos.[7] and 8 of the said order, which read:-

8. It is clear from reading of the aforesaid two paragraphs that the applicant had initially in his statement under Section 108 of the Act, admitted that the currency was given to him by Vinod Kumar Saini, resident of Jhunjhunu, Rajasthan for handing over to one Rakesh, who was to collect the same from Dubai. He had also given the mobile number of Rakesh and Vinod Kumar Saini. The applicant had also named Tulsi Ram, the owner of the vehicle and that he along with Vinod Kumar Saini had dropped him at the Jaipur Airport. Statement of Vinod Kumar Saini was recorded wherein he admitted that he had gone to the airport at Jaipur to see off the applicant. Vinod Kumar Saini accepted that incoming and outgoing calls were exchanged between him and Rakesh. Similar calls have been also received by Tulsi Ram, his relative. The Revisionary Authority thereafter in paragraphs 8.[1] and 8.[6] recorded as under:- “8.[1] As per above said statement of Shri Ram Kumar passenger, he was carrier of said currency and the currency was brought in concealed manner for monetary considerations. The passenger was driver by profession. During earlier proceedings, the passenger did not claim currencies. Rather he argued that said currencies belong to somebody else. He has not claimed the currencies even in revision application. So claiming the ownership of said currency during hearing held on 13-08-2012 is not acceptable. The investigation conducted by customs and statement of passenger Shri Ram Kumar categorically reveal that said currencies did not belong to Shri Ram Kumar and he acted as carrier on behalf of somebody else. Hon‟ble Supreme Court has held in the case of Surjeet Singh Chabra Vs. UOI 1997 (84) ELT (646) SC has observed that statement made before Customs Officer though retracted within 6 days, is an admission and binding since Customs Officers are not police officers. As such, the statement tendered before Customs is a valid evidence under law. xxx 8.[6] Government notes that in view of principles laid down in the above said judgments, the goods attempted to be imported/exported is a concealed manner in violation to relevant statutory provisions are to be absolutely confiscated.”

9. In the aforesaid paragraphs, the Revisionary Authority held that the applicant was merely a carrier of the said currency, which the applicant wanted to take out of India for monetary considerations. The Indian currency was concealed to avoid being detected. It is clear from the aforesaid finding that the applicant was not treated as the owner of the said currency and as far as ownership is concerned, it was clearly implied that the ownership belonged to Vinod Kumar Saini, who had given the said currency to the applicant for being taken to Dubai. It was meant to be delivered to Rakesh.