(1) UNION of India is in appeal against the order of the Kerala High Court confirming the decision of the Foreign Exchange Regulations Appellate Board, Southern Zone, Madras (for short "the Board"). In a case arising out of a penalty proceeding under Section 23 of the Foreign Exchange Regulation Act, 1947 (for short "the Act") for violation of Section 4(1) of the Act. The respondent was the owner of a car and on 18-8-1971, when the said car was intercepted by the Customs Authorities, a packet was found containing foreign exchange both US dollars and pounds sterling amounting to Rs 1,55,000. A show-cause notice was issued and the respondent appears to have given a reply that the packet was handed over to him by some person at Bombay telling that some people from a pharmaceutical firm in Kasaragod in Kerala will take it from him. But, before the said person could arrive, the Customs Authorities had intercepted. The Enforcement Directorate was not satisfied with the said explanation and, in the proceedings, came to the conclusion that the respondent has violated the provisions of Section 4(1) of the Act and, accordingly, he was levied penalty to the tune of Rs 50,000 and the e