Foreign currency non-declaration supports confiscation, but redemption fine may be reduced and penalty waived on mitigating facts.

Non-declaration of foreign currency in breach of the applicable foreign exchange notification supports confiscation under the foreign exchange regime. However, where the facts show no concealment, no evidence linking the traveller to a smuggling nexus, and a credible claim that the revised limit was not adequately publicised, the monetary consequences may be moderated. On those facts, confiscation was maintained, but the currency was permitted to be redeemed on payment of a reduced fine and the penalty was waived.

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Issues: Whether the confiscation of foreign currencies and imposition of penalty for non-declaration under the revised foreign exchange notification were sustainable, and whether the appellant was entitled to redemption on a reduced fine with waiver of penalty.

Analysis: The revised Reserve Bank notification restricting the permissible foreign currency limit was in force at the relevant time, and non-declaration of currency in contravention of the foreign exchange regime amounted to a legal violation. At the same time, the circumstances showed absence of concealment, absence of material linking the appellant to any smuggling racket, and a credible plea that the revised notification had not been adequately publicised when the appellant travelled. Those factors justified a lenient approach on consequential monetary relief.

Conclusion: The confiscation was upheld, but the currencies were allowed to be redeemed on payment of a reduced redemption fine and the penalty was waived.

Final Conclusion: The appellant succeeded only in part, obtaining relief against the penalty and substantial reduction in the monetary burden while the confiscation finding was maintained.

Ratio Decidendi: Non-declaration of foreign currency contrary to the applicable foreign exchange notification supports confiscation, but the extent of fine and penalty may be moderated on the facts where the breach is not accompanied by concealment or evidence of a smuggling nexus.

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