Appeal Denied: Currency Confiscation Upheld under Foreign Exchange Management Act

The appeal against the Appellate Tribunal's decision to confiscate seized foreign currency of US $20,000 was dismissed. The Tribunal's order was upheld as legal, justifying the confiscation due to the illegal possession of the currency and the lack of proof of a legitimate source of acquisition by the appellant. The Court ruled that the power to impose a penalty under Section 13(1) of the Foreign Exchange Management Act, 1999, does not preclude the authority from confiscating currency under Section 13(2).

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Issues:
1. Appeal against order by Appellate Tribunal for Foreign Exchange
2. Contravention of Section 3(a) of the Foreign Exchange Management Act, 1999
3. Penalty imposed under Section 13(1) of the Act
4. Confiscation of foreign currency
5. Interpretation of Section 13 of the Act
6. Adjudicating Authority's power to impose penalty and confiscate currency
7. Legality of Appellate Tribunal's decision to confiscate currency

Analysis:
1. The appeal was filed against the Appellate Tribunal's order, which set aside the Deputy Director's decision to release seized foreign currency and instead ordered confiscation. The appellant was found in possession of US $20,000, contravening Section 3(a) of the Act, leading to a penalty of Rs. 50,000 imposed by the Deputy Director.

2. The main contention was whether the Appellate Tribunal was justified in modifying the Deputy Director's order by directing confiscation of the foreign currency after adjusting the penalty. The appellant argued that once a penalty is imposed under Section 13, further confiscation is not permissible. The respondent supported the Tribunal's decision.

3. Section 13 of the Act deals with penalties for contraventions, allowing penalties up to thrice the amount involved or Rs. 2,00,000, with the power to confiscate currency or property in addition to the penalty. The Adjudicating Authority can impose penalties under sub-Section (1) and direct confiscation under sub-Section (2).

4. The Court held that the power to impose a penalty under Section 13(1) does not bar the authority from confiscating currency under Section 13(2). The Tribunal was justified in ordering confiscation as the possession of the foreign currency was illegal, and the appellant failed to prove a legitimate source of acquisition.

5. Therefore, the Appellate Tribunal's decision to confiscate the currency was legal, and the Deputy Director's order to release the currency was incorrect. The appeal was dismissed as devoid of merit, with no costs imposed. The judgment upheld the Tribunal's decision to confiscate the seized foreign currency of US $20,000.

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