Foreign exchange contravention: non-resident plea failed, but penalty was reduced after pre-deposit was considered.

Section 8(1) of the Foreign Exchange Regulation Act, 1973 was treated as applicable to persons in India and residents in India, so the plea of non-resident status did not defeat liability. Contravention was upheld because foreign currency had been recovered, there was no reliable proof that it had been lawfully brought into India within permissible limits, and the defence failed to show due encashment or surrender under section 8(3). The unreversed customs confiscation order also weighed against the appellant, while the pre-deposit already made was considered in granting partial relief. The penalty was therefore reduced.

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Issues: Whether the appellant was liable for contravention of section 8(1) of the Foreign Exchange Regulation Act, 1973 despite the plea that he was a non-resident, and whether the penalty imposed required reduction.

Analysis: The appellant's objection based on section 2(p) was rejected on the footing that section 8(1) applied to any person in India and to persons resident in India. The order also proceeded on the admitted recovery of foreign currency, the absence of reliable evidence that it had been lawfully brought into India within permissible limits, and the failure of the defence to establish that the currency had been duly encashed or surrendered as required by section 8(3). The confiscation order passed by the customs authorities had not been shown to have been set aside, and the pre-deposit already made was taken into account while assessing relief.

Conclusion: The contravention finding was upheld, but the penalty was reduced from Rs. 50,000 to Rs. 25,000.

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