Customs seizure of foreign exchange sale proceeds held unjustified where no smuggled goods were involved, with release directed.

Customs authorities had no lawful power to seize and retain sale proceeds from a transaction between authorised foreign exchange dealers, because no import, export or smuggled goods were involved. The Court held that confiscation provisions dealing with goods or their proceeds were inapplicable, and Section 121 could not be invoked in the absence of smuggled goods. The suggestion that the matter could wait for adjudication did not validate an action that was prima facie unwarranted and illegal. The seized amount was therefore not justified under the Customs Act and was directed to be released forthwith to the petitioner.

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Issues: Whether the customs authorities had any lawful power to seize and retain the sale proceeds received by the petitioner from another licensed money changer, and whether the impugned action could be sustained under the Customs Act.

Analysis: The transaction was between authorised foreign exchange dealers, and the purchaser's licence as a money exchange dealer was not disputed. The Court held that the provisions relating to confiscation of goods or their proceeds were inapplicable because no import, export, or smuggled goods were involved. Section 121 could not be invoked in the absence of smuggled goods, and the suggested course of awaiting adjudication did not cure an action that was prima facie unwarranted and illegal.

Conclusion: The seizure and retention of the petitioner's money were not justified under the Customs Act, and the amount was directed to be released forthwith in favour of the petitioner.

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