Prohibited import of Indian currency led to confiscation, while waived redemption rights and unsupported penalty were separately treated.

Indian currency notes of the relevant denomination, brought from Nepal and seized within Indian territory, were held liable to confiscation under Customs law because the prohibited import attracted Section 111(d), and lack of knowledge did not affect confiscability. The owner's right to redemption was treated as waivable, and since no such relief was sought before the authorities or by cross-appeal, redemption was unavailable at the appellate stage. The personal penalty, however, was not independently sustained on the facts and was set aside, leaving confiscation intact but removing the penalty.

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Issues: (i) Whether Indian currency notes of Rs. 500 denomination brought from Nepal and seized within Indian territory were liable to confiscation under the Customs law. (ii) Whether the owner could claim redemption of the confiscated currency notes at the appellate stage despite not having sought such relief earlier. (iii) Whether the personal penalty imposed under the Customs law was sustainable.

Issue (i): Whether Indian currency notes of Rs. 500 denomination brought from Nepal and seized within Indian territory were liable to confiscation under the Customs law.

Analysis: The interception and seizure occurred within Indian territory and the currency notes had admittedly been brought from Nepal. The prohibition on importation of Indian currency notes of the relevant denomination was not disputed. In view of the statutory scheme then operating, the prohibited import attracted confiscation under the Customs law. Knowledge or ignorance of the prohibition did not affect liability to confiscation.

Conclusion: The currency notes were liable to confiscation under Section 111(d) of the Customs Act.

Issue (ii): Whether the owner could claim redemption of the confiscated currency notes at the appellate stage despite not having sought such relief earlier.

Analysis: A redemption opportunity under the Customs law is a statutory right that may be waived. The owner did not assert that right before the authorities or in appeal, and no cross-appeal was filed seeking such relief. Having waived the right by conduct, it could not be revived at a later stage.

Conclusion: No redemption relief was available at the appellate stage, and the absolute confiscation was sustained.

Issue (iii): Whether the personal penalty imposed under the Customs law was sustainable.

Analysis: The appellate challenge did not specifically sustain the penalty, and no sufficient basis was shown to support its continuance. The confiscation finding did not require retention of the penalty on the facts presented.

Conclusion: The penalty was set aside.

Final Conclusion: The confiscation of the currency notes was upheld, but the personal penalty was removed, resulting in partial success for the Revenue.

Ratio Decidendi: Prohibited import attracting confiscation under the Customs law remains liable to absolute confiscation where the right of redemption has been waived, while the penalty component may be severed if not independently sustained.

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