Confiscation of foreign currency requires proof of prohibited import; mere possession is not enough where declaration rules apply.

Foreign currency seized from a passenger was examined for confiscation under Section 111(d) of the Customs Act, 1962. The text states that confiscation required proof that the currency itself had been imported by the person concerned in contravention of a legal prohibition. A show cause basis founded on Section 13 of the Foreign Exchange Regulation Act was treated as a new ground and could not be introduced at the appellate stage. Because the governing notification permitted free import of foreign exchange and foreign currency subject to passenger declaration, and the record did not establish prohibited import, mere possession was held insufficient for confiscation.

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Issues: Whether foreign currency seized from the respondent was liable to confiscation under Section 111(d) of the Customs Act, 1962 on the footing that its import was prohibited by law.

Analysis: The show cause notice proceeded on an alleged contravention of Section 13 of the Foreign Exchange Regulation Act, but that basis was treated as a new ground and could not be introduced at the appeal stage. On the merits, the governing notification permitted free import of foreign exchange and foreign currency into India, subject only to declaration by a passenger. The record did not establish that the currency was imported by the respondent in breach of any legal prohibition. The department's case rested on possession of the currency, but confiscation under Section 111(d) required proof that the currency itself had been imported by the respondent contrary to law, which was not shown.

Conclusion: The currency was not liable to confiscation under Section 111(d) of the Customs Act, 1962, and the appeal failed.

Ratio Decidendi: Confiscation under Section 111(d) of the Customs Act, 1962 requires proof of import by the person concerned in contravention of a legal prohibition; mere possession of foreign currency, when its import is otherwise permitted subject to declaration, is insufficient.

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