TaxTMI 
TaxTMI 
1988 (5) TMI 379
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.... the Appellant admitted to have received a sum of Rs. 1 lakh by means of a cheque from a local person in February 1985 on the instruction of his son, Paul Davis of USA the said amount was credited in his bank account No. 213 with the South Indian Bank Ltd., Quilon in February 1983 and out of the said sum he purchased a car for a sum of Rs. 75,571, utilising the balance amount of Rs. 24,429 in the construction of a garage for his car. As regards the seizure of US dollars 334, he explained that the amount was given to him by his son, Paul Davis when he had gone to visit his son and that he did not surrender the same for conversion into Indian currency under a wrong belief that he could keep foreign exchange up to dollars 500 with him. That ap....
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....residing in Saudi Arabia. 3. In reply to the above show-cause notices, the appellant admitted the Statement earlier given by him before the Enforcement Officer. He, however, explained that he had requested his son, Paul Davis residing in USA to advance Rs. 1 lakh to him for purchase of a car because he needed the same after having suffered a heart attack and that the amount in question was paid to him by a local person on the instruction of his son because the latter at that time had no ready money to spare. He also pleaded his innocence in regard to the alleged contravention of the aforesaid provision of law by explaining the facts and requested for a lenient view to be taken on the ground that he was not fully aware of the aforesaid pr....
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....ant's bank account and out of it the Ambassador car in question was purchased which cannot be said to be the subject-matter of any conscious or intentional contravention of the legal provision in question. The departmental representative on the other hand supported the adjudication order and pleaded that only a nominal penalty of Rs. 5,000 was imposed on the appellant for contravention of the provisions of section 9(1)(b) because the car purchased out of the amount involved in the contravention has also been confiscated. He further contended that very nominal penalty of Rs. 500 each was imposed in respect of charge under show-cause Notice Nos. 1 and 3 above keeping in view the facts of this case and the same cannot be said to be excessi....
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....tion in this transaction, it was contended that the amount in question was received by a bank draft and the amount has been spent only for the purchase of the car and building a garage for the same fact which would believe any possible suggestion of intentional contravention of law relating to foreign exchange. In reply to the contention raised by the Respondent that much heavier amount of penalty would have been imposed if it was not considered desirable to confiscate the car purchased out of the amount received by the appellant, the appellant immediately offered to pay any higher amount of penalty as the Board may like to impose, in lieu of confiscation. He also filed an affidavit duly sworn by the appellant that he is prepared to pay any....
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....avention' direct any currency, security or any other money or property in respect of which contravention has taken place to be confiscated. It is, thus, clear that confiscation can be ordered if taking into consideration the facts of this case it is considered necessary to confiscate the property and such confiscation is not automatic. The phrase "as it thinks fit" indicates that confiscation can be ordered only in suitable cases and there should be a conscious application of mind to justify such confiscation. Further, the use of phrase 'may' under section 63 clearly indicates that confiscation is not a matter of course. In this connection reference may be invited to the observations made by Lord Cairns in Julius v. Bishop of Ox....