Mens rea is essential for penalty in attempted foreign currency export cases; mere statement evidence was insufficient.

Penalty under Section 114(i) of the Customs Act required material showing that the appellant knew of, and intentionally associated himself with, the attempted unlawful export of foreign currency. The co-accused's statement did not establish the necessary mental element, and the fact that sale proceeds were returned in foreign currency was insufficient by itself to prove abetment. The record also did not show that the currency was intended for export in breach of foreign exchange requirements or that the appellant was aware of any such breach, so penalty was not warranted.

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Issues: Whether the appellant was liable to penalty under Section 114(i) of the Customs Act on the basis of the co-accused's statement alleging his participation in the attempted export of foreign currency.

Analysis: The statement relied upon by the Revenue did not contain material showing that the appellant knew that the foreign currencies were being exported illegally or that he had intentionally associated himself with the attempted unlawful export. The conclusion drawn from the mere fact that sale proceeds were returned in foreign currency was insufficient to establish the required mental element for abetment. The record also did not show that the foreign currency was intended to be exported in breach of the regulatory requirements under the Foreign Exchange Regulation Act, 1973, or that the appellant was aware of any such breach.

Conclusion: The appellant was not liable to penalty under Section 114(i) of the Customs Act.

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