Jatin C Jhaveri Vs. Union of India, on 13th May 2016, Supreme Court of India: Case Biref – Read Judgement

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Court says “acquisition” of foreign exchange should be with ‘general’ or ‘special permission’ of the Reserve Bank of India, under FERA.
Civil Appeal No. 11127 of 2011
Bench: Chief Justice of India T. S. Thakur; Justice Uday Umesh Lalit

Case Brief: Here, the present appeals were arising out of the common judgment and order passed by the High Court in FERA Appeal and Writ Petition. The High Court dismissed the writ petition filed by Jatin Jhaveri. In the facts of the case, one Ajit Dodia was boarding the flight to Hongkong from Mumbai, and he had checked in a grey suitcase and a black briefcase, when Custom Officers searched the same, they found the suitcase containing 289,250 US dollars while brief case containing 114,300 US dollars. Such currency was seized and when Ajit was questioned he disclosed that he was to accompany- Jatin Jhaveri- a diamond trader, that his brother- Jitendra Dodia was working with Jatin as a sorter. Thereafter, proceedings under Section 113 (d),(e) and (i) of the Customs Act, 1962 was initiated with the proposal to penalty and confiscation of the currency. Then, the Commissioner of Customs ordered confiscation of foreign currency and imposed penalty of 10 lakh rupees on Jatin and 3 lakh rupees on Ajit and 2 lakh rupees on Jitendra. These defendants preferred appeal before the Customs Excise and Gold Control Appellate Tribunal, which has held confiscation and reduced the penalty in connection with 289,250 US dollars and for other confiscation was confirmed and personal liability was reduced. The decision was brought to finality, as not challenged. Moreover, the Special Director imposed penalty of Rs. 30 lakh on each on Jatin and Ajit and Rs. 7.5 lakhs on Jitendra and confiscation was ordered. In appeal, the Appellate Tribunal ordered by allowing the appeal of Jitendra and appeals of Jatin and Ajit the confiscation of 114,300 was affirmed but penalty reduced. Thus, confiscation of 289, 250 US dollars was quashed. Appeals by Union of India represented by Enforcement Directorate was dismissed by high Court and allowed the writ petition to the extent to entitle the Jatin Javeri to the 289,250 US dollars but with no interest.

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This bench observed that the said Jatin himself declared in his first statement that he disowned the currency in question, the said statement by him was more than two months after the seizer of the said currency. The bench also found that for the purpose of Section 8(1) of the Foreign Exchange Regulation Act, 1973 “acquisition” of foreign exchange must be with general or special permission of the Reserve Bank of India. Even if the matter of ‘bringing into India’ of the currency in question, it is taken to have been established, though that part of the matter itself is not free from doubt, the question regarding ‘acquisition’ of currency must be independently established in the light of requirements under said Section 8(1). As such the bench found the assessment by Appellate Authority under Act of 1973 and high court in that behalf as completely incorrect. Thus, the appeal of Jatin was decided as fail and dismissed and the amount which was refunded to him was asked to refund the same with interest. And this bench confirms the decision of Special Director of Enforcement.

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Read the Judgement: Jatin C Jhaveri Vs. Union of India

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