Seizure of Currency at International airports by the Customs is a routine incident. While preparing seizure Panchanama, issuance of SCN or even preparing brief facts for adjudication in the matters related to the seizure of Currency/Foreign Exchange certain sections of the Customs Act, 1962 and allied Acts and Regulations come in handy to make your draft substantiated. Allied Acts and regulations includes: Foreign Exchange Management Act, 1999, Foreign Trade (Development and Regulation) Act, 1992, Foreign Exchange Management (Export and import of currency) Regulations, 2015, Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2015. Here are some hand picked sections/ rules/ regulations you would invariably need quoting as the circumstances demand, once you seize currency/ foreign exchange from possession of someone departing from the country:
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i)In terms of section 2(18) of the Customs Act 1962 “export” with its grammatical variation and cognate expression means taking out of India to a place outside India.
ii)In terms of section 2(19) of the Customs Act 1962 “export goods means any goods which are to be taken out of India to a place outside India.
iii)As per Section 2(20) of the Customs Act, 1992, ‘exporter’ in relation to any goods at any time between their entry for export and the time when they are exported, includes any owner or any person holding himself out to be the exporter.
iv) In terms of section 2(33) of the Customs Act 1962 “prohibited goods” means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with;
v) As per Section 2 (39) of the Customs Act, 1962, “Smuggling” in relation to any goods, means any act or omission which will render such goods liable to confiscation under Section 111 or 113 of the Customs Act, 1962.
vi) As per Section 77 of the Customs Act, 1962; the owner of any baggage shall, for the purpose of clearing it, make a declaration of its contents to the proper officer.
vii) In terms of provisions of Section 7 of the Foreign Trade (Development and Regulation) Act, 1992, no import or export can take place without a valid Import Export Code Number unless otherwise exempted.
viii) In terms of Section 113(d) any goods which are exported or brought within the limits of any Customs area for the purpose of being exported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force is liable for confiscation.
ix) In terms of Section 113 (e) of Customs Act, 1962, any goods which are found concealed in a package which is brought within the limits of a Customs area for the purpose of exportation is liable for confiscation.
x) In terms of Section 113 (h) any goods which are not included or are in excess of those included in the entry made under this Act, or in the case of baggage in the declaration made under Section 77 is liable for confiscation
xi) In terms of Section 11 of the Foreign Trade (Development and Regulations) Act, 1992, no export or import shall be made by any person except in accordance with the provisions of the said Act, rules and orders made there under and the existing Foreign Trade policy for the time being in force.
xii) Export from & Import into India of Currency or Currency notes are governed by the Foreign Exchange Management (Export & Import of Currency) Regulations, 2015
xiii) In terms of Section 114 of the Customs Act, 1962, Any person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 113, or abets the doing or omission of such an act, shall be liable to penalty.
(xiv) The Foreign Exchange Management Act, 1999 (herein after for brevity referred to as FEMA) was enacted with the objective of facilitating external trade and payments and for promoting orderly development and maintenance of foreign exchange market in India. Section 3 of FEMA provides that except as provided in FEMA or Rules and regulations made thereunder or with the general or special permission of the Reserve Bank of India no person shall receive from or make payment of foreign exchange to any person other than the authorized person. Section 4 of FEMA provides that except as provided under FEMA, no person resident in India shall acquire, hold, own, possess or transfer any foreign exchange. For Import and Export of Foreign and Indian Currency, the RBI has formulated Foreign Exchange Management (Export & Import of Currency) Regulation, 2015.
xv)In terms of the Regulation 7(1) of Foreign Exchange Management (Export & Import of currency) Regulation 2015, an authorized person may send out of India, foreign currency acquired in normal course of business.
(xvi) Regulation 5 of Foreign Exchange Management (Export and Import of Currency) Regulations, 2015 provides that except as otherwise provided in the regulations no persons shall without a general or special permission of RBI export or import into India any foreign currency.
xvii) In terms of Regulation 7(2)(b) of Foreign Exchange Management (Export & Import of currency) Regulation 2015, foreign exchange obtained by him by drawal from an authoriszd person in accordance with the provisions of the Act or the rules or regulations or directions made or issued thereunder;
(xviii) In terms of Regulation 7(3) of Foreign Exchange Management (Export & Import of currency) Regulation 2015, any person may take out of India;
(a)foreign exchange possessed by him in accordance with the Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2015;
(b)unspent foreign exchange brought back by him to India while returning from travel abroad and retained in accordance with the Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2015;
(xix) In terms of sub-regulation 7(4) of Foreign Exchange Management (Export & Import of currency) Regulation 2015, any person resident outside India may take out of India unspent foreign exchange not exceeding the amount brought in by him and declared on his arrival in India.
(xx) Essentially, Regulation 7 of Foreign Exchange Management (Export and Import of Currency) Regulations, 2015 allows any person to take out of India any foreign exchange possessed by him in accordance with the provisions of Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulation, 2015 and the foreign currency as obtained by him on drawal from authorized person in accordance with the provisions made in this regard. Accordingly, it stipulates on quantum of possession and the source to obtain.
(xxi) Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulation, 2015 provides under Regulation 3 (iii) does allow any person to retain foreign currency equivalent in value in excess of US $2000 provided such foreign exchange was acquired by him on his visit abroad by way of payment or services not arising from any business in or anything done in India; or was acquired by him, from any person not resident in India and who is on a visit to India, as honorarium or gift or for services rendered or in settlement of any lawful obligation; or was acquired by him by way of honorarium or gift while on a visit to any place outside India; or represents unspent amount of foreign exchange acquired by him from an authorized person for travel abroad.
Also, Check:
Baggage Rules 2016 Explained- Guide for Officers & Travellers
Application of Customs Act and Allied Acts in Seizure of Gold (Import)
References:
3. Foreign Trade (Development and Regulation) Act, 1992
4. Foreign Exchange Management Act, 1999
5. Foreign Exchange Management (Export and import of currency) Regulations, 2015
6. Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2015