ORDER
Jyoti Balasundaram, Member (J)
1. The brief facts of the case are that on 28-3-1997 Air India Security Officers apprehended a passenger, Pankaj Mansukhlal Jagda (Appellant No. 2) bound for Dubai by Air India Flight No. AI-729 at Air India baggage screening machine at the Bombay Airport. He was handed over to the officers of the AIU along with his baggage. He was asked by the Customs officers whether he was carrying any foreign currency in his baggage or on his person to which he replied in the affirmative stating that he was carrying some foreign exchange in his black zipper suitcase, search of which resulted in recovery of five bundles of assorted foreign currency equivalent to Rs. 28,01,257.5, wrapped in black carbon paper.
2. The currency was seized in the reasonable belief that it was attempted to be smuggled out of India. Statement of Pankaj Jagda was recorded under Section 108 of the Customs Act, 1962 in which he stated that the currency had been given to him by one Kishin Shewaram Loungani (Appellant No. 2), whom he knew for the last seven months, that Kishin Loungani had purchased his air ticket, and that Kishin Loungani was to give him Rs. 30,000/- for carrying the currency to Dubai. He also stated that Kishin Loungani was to go to Dubai within a day or two after Jagda’s trip to Dubai. On 4-8-1997 Kishin Loungani’s statement was recorded. He stated that he was running a jewellery business, that he has purchased assorted foreign currency from the local market from Mumbai and intended to send to Dubai through some carrier, collect the currency and bring a demand draft to legalise the currency for the purpose of investing in business, that he handed over foreign currency seized on that day to Jagda in his own residence at about 11.15 a.m. Both the appellants were arrested under Section 104 of the Customs Act, 1962 on 24-8-1997 on which date they both submitted retraction statement which was rebutted by the department vide letters, dated 25-8-1997 and 27-8-1997.
3. A further statement of Pankaj Jagda was recorded on 29-9-1997 wherein he contradicted his earlier statement, dated 28-3-1997. On 15-9-1997 he filed an application before the Customs authorities stating that he does not know Kishin Loungani and that Kishin Loungani had not handed over the currency under seizure to him. The Department rebutted this application on 20-9-1997 stating that Jagda’s statement, dated 15-9-1997 was an afterthought. In his further statement, dated 22-9-1997 Pankaj Jagda reaffirmed his first statement, dated 28-3-1997, was voluntary. Again on 23-9-1997 Pankaj Jagda submitted another application stating that the currency seized from him was given to him by his sister in the month of June, 1997 as a gift for purchase of a flat in Mumbai; that statement dated 23-8-1997 was not voluntary. He, however, admitted the recovery of currency from his possession and requested for the release of the same on levy of fine and imposition of penalty. The Department replied to this by treating it as an afterthought.
4. Statement of Shri Mansukhlal Jagda, father of Pankaj Jagda was recorded on 12-11-1997 in which he clearly stated that he knew Kishin Loungani for the past 20 years since they were running jewellery business although separately. This statement was corroborated by Kishin Loungani and also by Pankaj Jagda in his statement recorded on 19-11-1997. In these circumstances the show cause notice proposing absolute confiscation of the foreign currency under Section 113(d) and (h) of the Customs Act, 1962 read with Foreign Exchange (Regulation) Act and proposing imposition of penalty under Section 114 of the Customs Act, 1962 was issued to both the appellants. The adjudicating authority ordered absolute confiscation of the currency and imposed personal penalty of Rs. 75,000/- on Pankaj Jagda and Rs. 3 lakhs on Kishin Shewaram Loungani. Hence these appeals.
5. We have heard Shri V.S. Nankani, learned Counsel for Shri Kishin Loungani, S.N. Kantawala, learned Counsel for Shri Pankaj Jagda and Shri J.M. George, learned DR for the Revenue.
6. The contention of Shri Nankani that there was no attempt on the part of Shri Nankani to export the currency since the seizure was at the baggage area which is not a Customs Notified Area is not acceptable. The baggage screening area at the airport is situated beyond the visitor’s barrier and Shri Jagda had proceeded as a passenger to get his baggage screened prior to going in for check-in and further security check. He had thus taken more than one step in the direction of attempting to export foreign currency and therefore the provisions of Section 113(d) are attracted. Explanation of Shri Jagda that the currency was a gift from his sister which he was intending to return is not tenable for the reason that no such claim was made when the currency was detected and seized. On the day of seizure Shri Jagda stated that he did not know the amount of foreign currency that was found with him, the panchnama search conducted on 23-8-1997 at the residence of Shri Jagda shows that his sister was present at the time of search and not in Dubai where Shri Jagda slated that he was going for returning the currency to his sister. Shri Jagda has reconfirmed his initial inculpatory statement, one month later and thus wipes out his retraction. The provisions of Section 113(h) are therefore attracted in these circumstances since the prohibited goods, i.e., the foreign currency in question were not included in the declaration made under Section 77 of the Customs Act, and the plea that Jagda had declared the contents of his baggage to the proper officer since he replied in the affirmative to the query of the customs officers as to whether he was carrying any foreign currency cannot be accepted for the reason that in terms of Section 77 the owner of the baggage has to make the declaration of its contents to the proper officer and such declaration would include the details of the exact amount of the currency which was never declared by Shri Jagda. Therefore, the confiscation of the currency is sustainable. However, in the light of the Tribunal’s order in the case of Felix Dores Fernandes v. CC – 2000 (118) E.L.T. 639 wherein undeclared foreign currency found with the appellant on his departure to Dubai was allowed to be redeemed on payment of fine, we permit Shri Jagda to redeem the currency on payment of fine of Rs. 8 lakhs. Penalty imposed on Shri Jagda does not call for any reduction and is hence upheld.
7. As far as Shri Loungani is concerned, although he has stated that currency seized from Shri Pankaj Jagda had been handed over by him to Shri Jagda at about 11.15 a.m. on 23-8-1997 this statement is belied by the fact that Shri Loungani’s presence at his father’s residence in Lamington Road. On 23-8-1997 at the bed side of his father, who was seriously ill and who expired at 11.00 a.m. on 23-8-1997 is borne out by affidavits of two neighbours of Shri Loungani’s father and it is not physically possible for Shri Loungani to have handed over the currency in question to Shri Jagda at his residence in Khar at 11.00 a.m. and return to his dying father’s bed side to be present at his father’s death at 11.00 a.m., having regard to the distance between Lamington Road and Khar. Viewed in this background we have to accept the retraction of Shri Loungani that he was not concerned with the foreign currency under seizure. We therefore set aside the penalty on Shri Kishin Loungani.
8. The appeals are disposed off as above.