Decided on January 15,2015

Suresh Gangaram Hole And Ors. Appellant


P.R. Chandrasekharan, Member (T) - (1.)THERE are three appeals directed against Order -in -original No. Commr/PMG/Adjn/01/2011 -12, dated July 22, 2011 passed by the Commissioner of Customs, Chhatrapati Shivaji International Airport, Mumbai. Vide the impugned order, the learned adjudicating authority has ordered absolute confiscation of foreign currency equivalent to Rs. 1,25,22,780 seized from Shri Suresh Ganagaram Hole while he was attempting to smuggle the said currency out of India on his way to Sharjah from Mumbai by Air Arabia flight No. G9 -1402 on January 8, 2006. The said currency was confiscated under the provisions of section 113(d) and 113(h) of the Customs Act, 1962. The learned adjudicating authority also imposed penalties of Rs. 50 lakhs on Shri Hole, Rs. 1.25 crore on Shri Rajendra G. Bhutada, who claims to be the owner of the said currency and Smt. Bharati Bhutada, wife of Shri Rajendra Bhutada, for their involvement in the alleged smuggling of the said foreign currency. Aggrieved of the same, the appellants are before us. The facts relevant to the case are as follows. Shri Suresh Gangaram Hole (Mr. Hole in short) was intercepted by the Air Customs Intelligence Unit at the Mumbai airport on January 8, 2006 while he was proceeding for security check after clearance by the immigration and customs authorities. Examination of his checked in baggage and personal research resulted in recovery of US dollars 2,35,000, UAE dirhams 1,89,000 and Qatar rial 2,000, equivalent to Rs. 1,25,2,780 Investigation conducted revealed that the said foreign currency was handed over to Shri Hole by Shri Rajendra G. Bhutada for smuggling out of India. Shri Hole further admitted that he had smuggled foreign currency twice on earlier occasions also and on one such occasion Smt. Bharati Bhutada had handed over packages of foreign currency to be handed over to Shri Rajendra Bhutada in Dubai. As part of the investigations, statements of all concerned were recorded wherein there are clear admissions by S/Shri Hole, Rajendra Bhutada and Smt. Bharati Bhutada of their attempt to smuggle out the foreign currency from India. Some of the statements have also been retracted. On conclusion of investigation, a show -cause notice dated December 11, 2006 was issued proposing confiscation of the foreign currency seized and for imposition of penalties on all the three persons concerned. The said notice was adjudicated by the impugned order wherein the proposals in the notice were confirmed by absolute confiscation of the seized currency and by imposing penalties on the three appellants. Hence the appeals before us.
(2.)AT the time of consideration of the stay petition, stay was granted and early hearing of the appear was allowed all the case was fixed for final hearing on April 17, 2014. Thereafter, the appeals were listed for final disposal on June 5, 2014, August 20, 2014, October 17, 2014, November 27, 014 and finally today, (i.e., December 12, 2014) due to the request for adjournment by the appellant or the Revenue. Though the counsel for the appellant Shri Suresh Gangaram Hole wanted one more adjournment, we declined this request in the absence of a valid reason for the adjournment and, therefore, directed the counsel to argue the matter, especially considering the fact this is a case where application for early hearing had been allowed and the case had been adjourned four times earlier. As per the provisions of the proviso to section 129B(1A) of the Customs Act, 1962, only three adjournments are required to be given and the said provision has been complied with by granting more than three adjournments.
The learned counsel for the appellant Shri Suresh Gangaram Hole made the following submissions :

"(1) The appellant was under detention and custody of the customs officers from 3.40 am on January 8, 2006 after he was intercepted with the foreign currency at the Mumbai airport and he was produced before the judicial magistrate only on January 9, 2006 in the post lunch session. Therefore, the detention was illegal and the statement recorded from the appellant during the illegal detention is not a valid evidence.

(2) The panchnama proceedings for seizure of currency was made in English and the appellant did not know English and knew only Marathi and Hindi. The panchnama was prepared first and the signature of the panchas obtained later. Hence, the same cannot be relied upon as an evidence for recovery of foreign currency from the appellant.

(3) The statement recorded from the appellant in English was retracted on January 9, 2006 and all the subsequent statements recorded on January 10, 16 and 17 and February 23, 2006 were in English (that is, in a language not known to the appellant) and the appellant had retracted all the statements vide affidavit dated February 23, 2006. The statements, though recorded in the jail, were not in the presence of jail officials. Therefore, these statement have no evidentiary value. All the subsequent statements are exculpatory.

(4) As per the statement dated January 8, 2006, it has been alleged that the appellant was acting as a carrier for Mr. Bhutada in the smuggling of foreign currency; in the statement dated January 10, 2006, it has been recorded that he was working as a salesman, with the company of Mr. Bhutada and there are a number of contradictions in the various statements recorded by the Department.

(5) The appellant bad sought cross -examination of seven witnesses but the same was allowed only in respect of two witnesses, which is a violation of the principles of natural justice.

(6) In his affidavit dated February 23, 2006, the appellant has stated that the seized foreign currency was sourced at Dubai at the behest of Mr. Rajendra Bhutada and belonged to M/s. Tycoon General Trading in Dubai and was meant for transfer to M/s. a3 holdings Ltd., Hong Kong and since the appellant could not do the job, he brought it to India on December 28, 2005 but did not declare the same to the customs. It was the company's money which he was taking it back to Dubai on January 8, 2006 when he was intercepted by the customs officers. Further, vide letter dated April 15, 2006 Shri Rajendra Bhutada has also confirmed these facts apart from the letter dated April 26, 2006 from his advocate. The Department has not conducted any enquiry about the source of funds nor have they contradicted the evidence led by Shri Bhutada in this regard.

(7) The absolute confiscation of the seized currency, is not warranted as it has been claimed by Shri Bhutada and, therefore, the same should be returned to Bhutada or his company.

(8) As regards the allegation that Mrs. Bharati Bhutada, had given him money on an earlier occasion to be smuggled out of India, there is no evidence adduced by the Department in this regard and the Department confronted both persons face to face and drew a confrontation panchnama which has not been relied upon in the proceedings.

(9) The penalty of Rs. 50 lakhs imposed on the appellant is quite harsh as the appellant has not acted dishonestly and, therefore, the same be set aside."

(3.)THE learned counsel appearing for Shri Rajendra Bhutada and his wife Smt. Bharati Bhutada made the following submissions :
"(a) As regards Smt. Bharati Bhutada, the allegation is that she handed over a package containing foreign currency to Shri Suresh Gangaram Hole on December 27, 2005 to be handed over to her husband in Dubai on December 28, 2005. In the show -cause notice issued, there is no proposal to confiscate the said currency allegedly handed over and, therefore, no penal action can be taken against the appellant. Since her husband was in India on December 28, 2005, this contention of the Department is clearly wrong. The present seizure pertains to an altogether different transaction and the appellant has nothing to do with the same. The confrontation panchnama between her and Mr. Hole drawn on September 1, 2006, was never relied upon and the investigating officer has also denied having drawn any such panchnama. Hence the entire charge against the appellant is on flimsy grounds without any basis. Accordingly, it is prayed that the penalty imposed on the appellant be set aside.

(b) As regards the charges against Mr. Rajendra Bhutada, the appellant has been implicated only on the basis of uncorroborated and retracted confessional statement of co -noticee and the same cannot constitute sufficient basis for penalising the appellant.

(c) The investigating agency has not conducted any enquiry to verify the genuineness of all documents submitted by the appellant regarding the ownership and source of procurement of seized foreign currency. In the absence of a proper investigation and rebuttal of the evidence produced by the appellant, the absolute confiscation of the seized currency is not warranted. Further, the show -cause notice in this case has been issued only on December 11, 2006 whereas the currency was seized on January 8, 1996, that is after a period of almost 11 months. Section 124 of the Customs Act mandates that show -cause notice shall be issued within a period of six months from the date of seizure. Therefore, the entire notice and the proceedings are vitiated.

(d) The appellant is the owner of the seized currency although he was not concerned or connected with the import or export thereof and he is a victim of an error committed by the employee of his overseas company who allegedly took out the funds from the appellant's overseas company and instead of making payments abroad, brought the said funds to India and was again taking back the said funds abroad without his knowledge. In these circumstances, the seized currency be released to him and the penalties imposed on the appellant be set aside. Reliance is placed on the decisions of the Tribunal in the case of Philip Fernandes : [2002] 146 ELT 180 (Trib. -Mum), Kishin Shewaram Loungani : [2002] 140 ELT 225 (Trib. -Mum) and Final Order Nos. A/1607 to 609/13/CSTB/C -L dated July 23, 2013 in the case of Arun Ramanlal Sura v. Commissioner of Customs, [2015] 31 GSTR 209 (Trib. -Mum)."


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