Transit carriage of foreign exchange through India amounts to import and undeclared exit is prohibited export, attracting confiscation and penalty.

Foreign exchange carried by a transit passenger through India is treated as imported into India under the Foreign Exchange Regulation Act, 1973, even if kept on a conveyance and intended to be taken out. Taking that currency out of India without permission constitutes prohibited export under the Act. On that basis, the attempted export attracts customs consequences, including confiscation under section 113(d) of the Customs Act, 1962, and the imposition of penalty. The stated legal position is that transit movement does not avoid the statutory prohibition on undeclared foreign exchange movement through India.

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Issues: Whether foreign exchange carried by a transit passenger through India and taken out of India without declaration was prohibited under section 13 of the Foreign Exchange Regulation Act, 1973, and whether its confiscation and penalty under the Customs Act, 1962 were valid.

Analysis: Section 13 of the Foreign Exchange Regulation Act, 1973 prohibited both import and export of foreign exchange without permission. The explanation to sub-section (1) treated foreign exchange brought into India, even when kept on a conveyance and intended to be taken out, as a bringing into India. On that footing, the currency in the petitioner's possession was treated as imported into India. If the same currency was then taken out while the petitioner was in transit, that act amounted to export within sub-section (2). The attempt to export the foreign exchange therefore attracted the customs consequences flowing from the illegal export, including liability to confiscation under section 113(d) of the Customs Act, 1962. The penalty imposed was also found justified.

Conclusion: The prohibition applied to the transit movement of the foreign exchange, and the confiscation and penalty were upheld.

Ratio Decidendi: Foreign exchange brought into India by a transit passenger is treated as imported for the purposes of section 13 of the Foreign Exchange Regulation Act, 1973, and its taking out of India without permission constitutes prohibited export, rendering it liable to confiscation and penalty under the Customs Act, 1962.

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