Foreign currency confiscation upheld where unexplained possession supported an inference of attempted unauthorised export and penalty remained reduced.

Foreign currency found in an appellant's possession was held liable to confiscation where the appellant failed to prove that it had been lawfully brought into India and was being taken back on departure. The surrounding circumstances, including the presence of currencies other than Saudi Riyals and the unrebutted explanation recorded in the statement, supported an inference of attempted unauthorised export. A later retraction was treated as not bona fide and did not displace the contemporaneous statement and evidence. The reduced penalty was also maintained because no mitigating ground justified further interference.

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Issues: (i) Whether the foreign currency recovered from the appellant was liable to confiscation on the ground of attempted unauthorised export outside India; (ii) Whether the penalty imposed on the appellant called for reduction.

Issue (i): Whether the foreign currency recovered from the appellant was liable to confiscation on the ground of attempted unauthorised export outside India.

Analysis: The appellant failed to substantiate the claim that the currency in question had been brought into India earlier and was being taken back on departure. The recovery included currencies other than Saudi Riyals, and no satisfactory explanation was offered for their possession. The statement recorded from the appellant, including the explanation regarding delivery to a person at Riyadh, was accepted as reliable, and the retraction was not found bona fide. On these facts, the authorities below were justified in holding that the appellant had attempted to export foreign currency unauthorisedly in contravention of the relevant provisions.

Conclusion: The confiscation of the foreign currency was upheld against the appellant.

Issue (ii): Whether the penalty imposed on the appellant called for reduction.

Analysis: The nature of the offence and the quantum of foreign currency sought to be taken out unauthorisedly did not justify any further interference with the penalty already reduced in appeal. No mitigating ground was made out for additional reduction.

Conclusion: The reduced penalty was maintained and no further relief was granted to the appellant.

Final Conclusion: The challenge to the confiscation and the penal action failed, and the appellate order was affirmed in substance.

Ratio Decidendi: Where an assessee fails to explain possession of foreign currency and the surrounding circumstances support an inference of attempted unauthorised export, confiscation and penalty under the Customs law are sustainable; a bare retraction without bona fide support does not displace the contemporaneous statement and surrounding evidence.

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