Redemption of confiscated foreign currency may be allowed under customs law where circumstances justify discretion instead of absolute confiscation.

Foreign currency seized for violation of foreign exchange law may be released on redemption fine under Section 125 of the Customs Act, 1962, because that provision gives discretion to permit redemption instead of absolute confiscation where the circumstances justify it. The Tribunal relied on the retraction of the initial statement, the later statement, and contemporaneous letters to support redemption, and confirmed that the seized foreign currency could be released on payment of fine. The reduced penalty was not disturbed, as no sufficient reason was shown to interfere with the appellate authority's assessment on the facts.

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Issues: (i) whether foreign currency confiscated for violation of foreign exchange law could be released on payment of redemption fine under the Customs Act, 1962; and (ii) whether the penalty imposed on the appellant was liable to be interfered with.

Issue (i): Whether foreign currency confiscated for violation of foreign exchange law could be released on payment of redemption fine under the Customs Act, 1962.

Analysis: The confiscation was based mainly on the initial statement recorded at the time of seizure, but the statement had been retracted at the first available opportunity before the Chief Judicial Magistrate. The later statement and the contemporaneous letters from the appellant's brother were also relevant material. Although export of foreign currency without Reserve Bank permission involved a prohibition attracting Section 125 of the Customs Act, 1962, that provision confers discretion to offer redemption in lieu of confiscation. The Tribunal also noted the earlier decision allowing redemption of foreign currency on fine in similar circumstances.

Conclusion: Redemption of the seized US $ 6,000 was allowed on payment of redemption fine, and absolute confiscation was not sustained.

Issue (ii): Whether the penalty imposed on the appellant was liable to be interfered with.

Analysis: The penalty had already been reduced by the appellate authority, and the Tribunal found no reason to disturb the reduced amount on the facts of the case.

Conclusion: The penalty of Rs. 10,000 was confirmed.

Final Conclusion: The appeal succeeded only to the extent that the appellant was granted redemption of the seized foreign currency on payment of fine, while the reduced penalty was maintained.

Ratio Decidendi: Even where foreign currency is liable to confiscation for want of permission under foreign exchange law, Section 125 of the Customs Act, 1962 empowers the authority to permit redemption in lieu of confiscation where the circumstances justify the exercise of discretion.

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