Non-resident status and burden of proof in foreign currency cases require admissible evidence, not bare allegation.

Non-resident status under foreign exchange law is determined by the statutory definition of residence in India; once a person falls within any prescribed category of non-residence, further inquiry into intention to stay abroad is unnecessary. On the evidence of foreign employment, visa, and residence records, the appellant was treated as a person resident outside India. Where governing notifications permit carriage of foreign currency within the prescribed limit, lawful import may be accepted for shifting the burden, and the department must then prove unlawful acquisition by admissible evidence. Bare allegation of black market purchase was insufficient, so seizure, penalty, and confiscation were unsustainable.

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Issues: (i) Whether the appellant was a person resident outside India under the foreign exchange law. (ii) Whether the seized foreign currency was lawfully possessed and whether the penalty and confiscation were sustainable.

Issue (i): Whether the appellant was a person resident outside India under the foreign exchange law.

Analysis: The definition of a person resident outside India depends upon the negative formulation of a person resident in India, and if a person falls within any one of the categories specified for non-residence, further enquiry into intention to stay abroad is unnecessary. The appellant produced documentary material of foreign employment, including visa and residence-related records issued by foreign authorities. The finding that he continued to be resident in India was therefore unsupported on the approach adopted below.

Conclusion: The appellant was a person resident outside India at the relevant time.

Issue (ii): Whether the seized foreign currency was lawfully possessed and whether the penalty and confiscation were sustainable.

Analysis: Under the applicable notifications, a person arriving in India could bring foreign currency up to the prescribed limit without declaration, and a non-resident in India could take out foreign exchange not exceeding the amount brought in. Once the appellant's claim of lawful import was accepted for the purpose of shifting the burden under section 71(3), it was for the department to prove the allegation of black market purchase by admissible evidence. Mere assertion attributed to the appellant, without supporting proof of the essential allegation, was insufficient to sustain contravention or confiscation.

Conclusion: The seizure, penalty, and confiscation could not be sustained.

Final Conclusion: The impugned order was set aside and the seized foreign currency was directed to be returned to the appellant.

Ratio Decidendi: Where a person establishes non-resident status through reliable documentary evidence and the governing notifications permit carriage of foreign currency within the prescribed limit, the burden shifts to the department to prove unlawful acquisition by admissible evidence; bare allegation cannot establish contravention.

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