Salt Experience & Management Private Limited vs. Commissioner Of Customs (NS-V), New Delhi [Writ Petition No. 51745 Of 2025] Dated 21.01.2026

BRIEF FACTS OF THE CASE

• The Petitioner is engaged as a third-party service provider to M/s Hero MotoCorp Ltd for arranging travel, events and business programs outside India under an all-inclusive billing arrangement. The Petitioner's responsibilities included the procurement of foreign currency and other permitted instruments for meeting business expenditure abroad. The business model involved employees to accompany the client's representatives with sufficient access to funds for disbursement.
• Security operatives at IGI Airport, New Delhi, intercepted foreign currency valued at Rs. 81,01,421 from Shri Amit Bali, an employee of the Petitioner, while he was travelling with Shri Pawan Kant Munjal [Director of M/s Hero MotoCorp Ltd.]
• The Department expanded the investigation to review foreign currency totaling INR 27,89,23,327 allegedly carried by seven employees of the Petitioner between 2014-15 to 2018-19, a travel card worth INR 21,35,25,172 carried by Shri Amit Bali, though issued to other employees and expenditure of INR 3,72,64,700 found recorded in a pen-drive recovered from the Petitioner's office.
• A show-cause notice was issued to the Petitioner, Shri Amit Bali, Shri Hemant Dahiya (Director), Shri Kumar Rajesh Raman (Chief Finance Officer), and Shri Pawan Kant Munjal, proposing the confiscation of seized currency and travel cards for alleged contravention of Reserve Bank of India [RBI] instructions.
• The adjudicating authority confiscated the seized currency of INR 81,01,421, held past exports liable to confiscation and imposed fines. Proceedings against Shri Pawan Kant Munjal were dropped but later reversed on appeal by the Department.
• In the Order 26.08.2025, the Commissioner of Customs (Appeals) set aside confiscation of INR 27,89,23,327 and INR 3,72,64,700 but affirmed confiscation of INR 21,35,25,172 relating to travel cards, citing violations of FEMA Regulations. Some relief was granted on penalties.
• After the first appellate order, the remaining detriments were: (a) absolute confiscation of foreign currency equivalent of INR 81,01,421; and (b) penalties of INR 21,00,000 and INR 3,20,00,000 each on Shri Hemant Dahiya, Shri Kumar Rajesh Raman and Shri Amit Bali under Section 114.
• The Petitioner filed an appeal before the Hon'ble CESTAT, New Delhi. The issue before the Tribunal was whether the Customs Authorities had the jurisdiction to confiscate the foreign currency and impose penalties under the Customs Act, 1962, or whether the proceedings should have been initiated under the Foreign Exchange Management Act (FEMA), 1999.

KEY OBSERVATIONS OF THE HON'BLE TRINUBAL

• The Hon'ble CESTAT held that the Customs Authorities lacked jurisdiction to confiscate foreign currency and impose penalties under the Customs Act, 1962, for contraventions of FEMA regulations emanating from FEMA 1999. The proceedings should have been initiated under FEMA 1999.
• Under the erstwhile Foreign Exchange Regulation Act, 1973 (FERA), a deeming provision [section 23A and Section 67] treated FERA restrictions as prohibitions under the Customs law [section 11 of the Customs Act, 1962], enabling Customs proceedings. However, FEMA deliberately omitted any such deeming provision, indicating the legislative intent to end the 'dual machinery' of Customs and Enforcement Directorate for foreign exchange matters. There was no notification under Section 11 of the Customs Act prohibiting the export of foreign currency. Thus, the Tribunal held that without such a deeming provision, there was no authority for Customs authorities to proceed and contraventions of FEMA regulations would fall under the sole and exclusive empowerment of the authorities defined and appointed under FEMA, 1999.
• The Tribunal held that any delegation to Customs officers under FEMA Standing Orders was for the exercise of powers under FEMA itself, not for the invocation of Customs Act provisions. The deliberate abandonment of delegated authority under FEMA constituted a perverse defiance of the law. The Tribunal noted that the foreign currency was lawfully sourced from authorised dealers for legitimate business expenditure on behalf of M/s Hero MotoCorp Ltd. The proceedings invoked Section 113(d) of the Customs Act, read with FEMA, which was inconsistent with the scope of empowerment under Section 113(d), as the provision requires a prohibition imposed by or under the Customs Act or any other law, whereas no such prohibition existed under the Customs Act.
• Consequently, the Tribunal held that the confiscation of INR 81,01,421 and penalties of INR 21,00,000 and INR 3,20,00,000 each on Shri Hemant Dahiya, Shri Kumar Rajesh Raman and Shri Amit Bali under Sections 113(d) and 114 of the Customs Act were extra-legal and egregious exercises of power and deserved to be set aside. The appeals were allowed.
• The Tribunal has highlighted that the legislative framework under FEMA fundamentally differs from that under its predecessor, FERA. Unlike FERA, which expressly deemed certain foreign exchange violations to be prohibitions under the Sea Customs Act/ Customs Act, FEMA contains no such deeming provision, nor any statutory link that extends Customs jurisdiction into the FEMA domain. The Tribunal has underscored that FEMA is intended to be a self contained, standalone statute. Its enforcement cannot be imported into the Customs Act by implication, administrative convenience, or expansive interpretation.
• The Salt Experiences ruling directly contradicts earlier CESTAT decisions such as Mr. Pankaj Mittal v. Commissioner of Customs (Airport & Administration) Kolkata¹ and Mr. Rajesh Kumar Ishwar Parikh v. C.C.-Ahmedabad² , which had firmly established Customs' jurisdiction over foreign currency cases by treating currency as "goods" under Section 2(22) of the Customs Act and by holding that Section 113(d) independently empowers Customs to confiscate goods attempted to be exported contrary to prohibitions under "any other law," including FEMA, without requiring any deeming provision. The conflict arises because Salt Experiences treats the absence of a FERA-style deeming clause as fatal to Customs' jurisdiction, effectively reading Section 113(d)'s explicit reference to prohibitions under "any other law for the time being in force" as insufficient to incorporate FEMA violations, even though the plain statutory language of Section 113(d) expressly authorizes confiscation of goods attempted to be exported contrary to prohibitions under the Customs Act or any other law, a phrase broad enough to encompass FEMA. The earlier decisions in Pankaj Mittal and Rajesh Kumar Ishwar Parikh relied on precisely this textual interpretation in holding that Section 113(d) itself provides direct statutory authority for Customs to act against FEMA violations, making the reasoning in Salt Experiences difficult to reconcile with the statute's clear wording and creating a jurisdictional inconsistency that may ultimately require higher judicial clarification.

Footnotes

1. [2022 (8) TMI 556]

2. [2020 (12) TMI 428]

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