Foreign exchange confiscation requires recorded reasons and supporting material; penalty may be reduced where wilful conduct is absent.

Contravention of foreign exchange law was upheld where the appellant maintained foreign currency accounts abroad without complying with prescribed requirements, but the absence of wilful conduct and the bona fides shown justified reduction of penalty rather than complete exoneration. Confiscation of foreign exchange was found unwarranted because that power is discretionary and must be supported by recorded reasons and material showing why forfeiture is justified; where the source of the funds was not shown to be tainted or unlawfully acquired, confiscation could not stand. The appeal succeeded only in part: the contravention remained established, the penalty was reduced, and the confiscation order was annulled.

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Issues: (i) Whether the appellant had contravened the foreign exchange law and whether the absence of wilful conduct entitled him to complete exoneration or reduction of penalty; (ii) Whether confiscation of the foreign exchange was justified under the statute.

Issue (i): Whether the appellant had contravened the foreign exchange law and whether the absence of wilful conduct entitled him to complete exoneration or reduction of penalty.

Analysis: The appellant had maintained foreign currency accounts abroad and failed to comply with the prescribed requirements, so the statutory contravention was established. At the same time, the absence of wilful conduct and the bona fides shown in explanation supported some leniency on penalty. The Board therefore treated the offence as proved but considered the original penalty excessive in the circumstances.

Conclusion: The contravention was upheld, but the penalty was reduced and the appellant did not succeed in obtaining complete exoneration.

Issue (ii): Whether confiscation of the foreign exchange was justified under the statute.

Analysis: Confiscation under the relevant provision is discretionary and must be supported by reasons showing why confiscation, in addition to penalty, is warranted. Where the source of the foreign exchange is not shown to be tainted or unlawfully acquired and no material is produced to justify forfeiture, confiscation is not warranted. On the material before it, the Board found no basis in fact or law for confiscation.

Conclusion: The confiscation order was set aside.

Final Conclusion: The appeal succeeded only in part: the finding of contravention stood, the penalty was reduced, and the confiscation of foreign exchange was annulled.

Ratio Decidendi: Confiscation of foreign exchange under the Act is a discretionary power that must be exercised on recorded reasons and supported by material showing that confiscation is warranted; in the absence of such basis, confiscation cannot be sustained even where contravention is proved.

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