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Issues:
1. Appeal against the order of confiscation of seized foreign currency and penalty under the Foreign Exchange Regulation Act, 1973. 2. Authority of the Appellate Board member who affirmed the penalty. 3. Applicability of Section 8(1) of the Act to a person resident outside India. 4. Burden of proof on the appellant to show legal acquisition of foreign currency. 5. Consideration of circumstantial evidence regarding the origin of the seized foreign currency. 6. Justification of the penalty imposed for technical violation of Section 8(1) of the Act. Analysis: 1. The appellant filed an appeal against the order confiscating seized foreign currency and imposing a penalty under the Foreign Exchange Regulation Act, 1973. The appellant was found in possession of U.S. $6,700 without being an authorized dealer, triggering the burden of proof to show legal acquisition. The adjudicating officer and the Appellate Board affirmed the penalty and confiscation, leading to the appeal in the High Court. 2. The appellant challenged the authority of the Appellate Board member who affirmed the penalty. The contention was that the member exercising the Board's powers should be duly authorized by the Chairman. The Court held that there is a presumption of authorization by the Chairman, but recommended specific notes in the order to avoid technical objections later. 3. The appellant argued that as a person resident outside India, he could not be held guilty of violating Section 8(1) of the Act. However, the Court disagreed, stating that the Act prohibits any person in India, including residents outside India, from acquiring foreign currency except through authorized dealers. 4. The burden of proof was on the appellant to demonstrate legal acquisition of the foreign currency. The appellant claimed the amount was earned in the U.S.A., supported by documents. However, it was found that the appellant failed to prove how much foreign currency was brought to India, leading to the conclusion that the seized amount was not brought from abroad. 5. The Court considered circumstantial evidence regarding the origin of the foreign currency. Even if the documents produced by the appellant were correct, he still failed to discharge the burden under Section 71(3) of the Act, as it was not clear how much currency was brought into India. 6. Lastly, the Court addressed the justification of the penalty imposed for the technical violation of Section 8(1) of the Act. The appellant's ignorance of the law was considered, leading to a reduced penalty of &8377; 5,000, in line with the minimum penalty provision under Section 50 of the Act. The Court found that a penalty of &8377; 5,000, along with the confiscation of foreign exchange, would meet the ends of justice. In conclusion, the appeal succeeded, and the appellant was entitled to a refund of &8377; 15,000 out of the penalty amount if already deposited.
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