Prohibited import of Indian currency can justify confiscation, but penalty needs proof of personal involvement in the contravention.

Indian currency notes of denomination above the prescribed limit, brought from Nepal into India in breach of the foreign exchange prohibition, were treated as liable to confiscation under Customs law. The stated rationale is that violation of the notification issued under the Foreign Exchange Regulation Act, 1973 made the currency prohibited goods for customs purposes, so confiscation was upheld. Penalty against Shri Ramji Singh was not sustained because the record contained no material linking him to the prohibited import or showing his participation in the contravention, and that penalty was set aside.

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Issues: (i) Whether Indian currency notes of denomination above Rs. 100 brought from Nepal into India in breach of the foreign exchange notification were liable to confiscation under the Customs law; (ii) Whether the penalty imposed on Shri Ramji Singh was sustainable in the absence of material showing his involvement in the prohibited import.

Issue (i): Whether Indian currency notes of denomination above Rs. 100 brought from Nepal into India in breach of the foreign exchange notification were liable to confiscation under the Customs law.

Analysis: The prohibition on bringing Indian currency notes above the prescribed denomination from Nepal into India was treated as operative under the notification issued under the Foreign Exchange Regulation Act, 1973. Since the currency was admittedly brought in violation of that prohibition, the goods were regarded as liable to confiscation under the Customs law.

Conclusion: The confiscation of the Indian currency was upheld.

Issue (ii): Whether the penalty imposed on Shri Ramji Singh was sustainable in the absence of material showing his involvement in the prohibited import.

Analysis: The record did not show any material establishing Shri Ramji Singh's complicity in bringing the prohibited currency into India. In the absence of evidence linking him to the contravention, penalty could not be sustained against him.

Conclusion: The penalty imposed on Shri Ramji Singh was set aside.

Final Conclusion: The order sustained confiscation of the prohibited currency and the penalty on the person who carried it, but deleted the penalty imposed on Shri Ramji Singh for want of proof of his involvement.

Ratio Decidendi: Currency imported in violation of a prohibition under the Foreign Exchange Regulation Act is liable to confiscation under the Customs law, but penalty cannot be sustained against a person unless his participation in the contravention is established by material evidence.

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