Foreign currency smuggling justifies absolute confiscation, while penalty may be reduced on the facts.

An admitted attempt to smuggle foreign currency out of India justified absolute confiscation of the currencies recovered from the appellant's baggage and hotel flush tank. The recorded statements showed that the currency belonged to the appellant and was intended for export, making confiscation sustainable. The penalty was also upheld in principle, but it was found excessive on the facts and reduced to Rs. 5 lakhs. The appeal was therefore only partly allowed, with confiscation maintained and the penalty modified downward.

---

---

Issues: (i) whether the foreign currencies attempted to be taken out of India were liable to absolute confiscation; (ii) whether the penalty imposed required reduction.

Issue (i): whether the foreign currencies attempted to be taken out of India were liable to absolute confiscation.

Analysis: The statements on record established that the appellant had attempted to smuggle the foreign currencies out of India and had admitted that the currencies recovered from his baggage and the hotel flush tank belonged to him and were intended for export out of India.

Conclusion: Absolute confiscation was justified and sustainable.

Issue (ii): whether the penalty imposed required reduction.

Analysis: In view of the totality of the facts and circumstances, the penalty was found to be excessive, though penal liability was otherwise sustainable.

Conclusion: The penalty was reduced to Rs. 5 lakhs.

Final Conclusion: The confiscation was upheld, while the penalty was modified downward, resulting in a partial allowance of the appeal.

Ratio Decidendi: An admitted attempt to smuggle foreign currency out of India justifies absolute confiscation, but the quantum of penalty may be reduced having regard to the overall facts and circumstances.

---