ORDER S.A. Kader, J. 1. The appeal is against the order of the Foreign Exchange Regulation Appellate Board (Southern Zone) in Appeal No. 367 of 1977 dated 28.7.1980 confirming the order of the Additional Director, Enforcement Directorate, Madras, in his order No. 24 of 1977 dated 17.1.1977 imposing on the 1 appellant a penalty of Rs. 10,000/- and confiscating the Indian currency of Rs. 25,000/- seized from the appellant by the Nagore police on 24.3.1973 for violation of the provisions of Section 5(1)(aa) of the Foreign Exchange Regulation Act of 1947, hereinafter referred to as the Act. 2. The charge against the appellant is that in March 1973, the appellant living at No. 1, South Street, Andakkamudukku, Nagore, a person resident in India, received without the general or special exemption from the Reserve Bank of India, a sum of Rs. 1,90,000/- from a local person other than an authorised dealer in foreign exchange, by order or on behalf of a person resident outside India, in violation of Section 5(1)(aa) of the Act. 3. The case of the Department rests almost entirely on the statements recorded from the appellant on 3.4.1973 and on 5.4.1973. The facts disclosed from these statements are theses. The appellant is a resident of Nagore in Tanjore District. Once, one Abubacker met the appellant in the Nagore Dargah and told the appellant that he was from a village near Mayavaram and that if the appellant met the said Abubacker once in a month in a particular place at Mayavaram, the said Abubacker, would hand over to the appellant amounts received as per foreign instructions and that the appellant should keep the amounts with him for a clay or two and return the same to the said Abubacker, whenever he wanted. The said Abubacker also told the appellant that if the appellant was honest he would pay him Rs. 50/-for his expenses. The appellant agreed to the suggestion and accordingly collected money from the said Abubacker at Mayavaram on five or six occasions and returned the same to the said Abubacker at Nagore. On 24.3.1973 he received a sum of Rs. 1,90,000/- from the said Abubacker at Mayavaram and when he was returning to Nagore, he was apprehended by a police head constable at about 5 p.m. near the bus-stand at Nagore. On 24.3.1973 he received a sum of Rs. 1,90,000/- from the said Abubacker at Mayavaram and when he was returning to Nagore, he was apprehended by a police head constable at about 5 p.m. near the bus-stand at Nagore. He was taken to the police-station and his bag was searched and it was found to contain Rs. 1,90,000/-. On coming to know of this, some persons from Nagore came and mediated in the matter. Thereupon, a case was registered against the appellant for a sum of Rs. 25,000/- only and that out of the balance of Rs. l,65,000/-, a sum of Rs. l,00,000/- was arranged to be paid to one Abdul Rahman Sahib and the further balance of Rs. 65,000/- was shared among several person's, including the police. According to the appellant, though at the time when Abubacker of Mayavaram handed over the sum of Rs. 1,90,000/- to him, he did not know to whom the amount was payable, he came to know subsequently that a sum of Rs. 1,00,000/- was payable to Abdul Rahman Sahib Hajiyar, Nagore, and the balance of sum of Rs. 90,000/- was due to Abdul Kader Masthan Haji of Nagore. 4. In his additional statement, recorded on 5.4.1973, the appellant has stated that he collected the said amount from Abubacker of Mayavaram on behalf of one Syed Muhammad of Pudumanai Street, Nagore, and that the said Syed Muhammad was to distribute this money to Abdul Rahman Rowther and some others. A statement has been recorded from the said Syed Muhammad on 8.6.1973. According to him, he sent the appellant not to Mayavaram to collect money from Abubacker, but to Madras to collect the said amount from one Dawood of No. 2, Muthugramani Street, Periamet, Madras. There is thus a clear conflict between the statement of the appellant and that of the statement of the said Syed Muhammad, which throws doubt on the veracity of the second statement given by the appellant. Statements have also been recorded by the Enforcement Officer from Abdul Rahman of South Street, Nagore and Abdul Kader Masthan of Pudumanai Street, Nagore, Abdul Rahman is a citizen of Singapore, while Abdul Kader Masthan Haji is a citizen of Malaysia. Their statement is to the affect that they used to send money to India from abroad to be collected by Syed Muhammad of Pudumanai Street, Nagore. Their statement is to the affect that they used to send money to India from abroad to be collected by Syed Muhammad of Pudumanai Street, Nagore. They do not implicate the appellant and it is not their case that they had instructed the appellant to receive any money on their behalf. 5. The appellant, in his reply to the show-cause notice, denied the voluntary nature of the two statements recorded from him and contended that they were obtained from him by use of criminal force and threat. He pleaded that on 24.3.1973, the police seized from him Indian currency to the tune of Rs. 25,000/- only, that the said amount represented his savings and that he had not committed any offence. 6. The additional Director, Enforcement Directorate, by his order dated 17.1.1977 held that the appellant had violated the provisions of Section 5(1)(aa) of the Act and imposed upon him a penalty of Rs. 10,000/- and ordered the confiscation of the sum of Rs. 25,000/- recovered from his person. This order was confirmed by the Foreign Exchange Regulation Appellate Board (Southern Zone) and hence this Appeal. 7. The main question that arises for consideration is whether on the facts set out by the prosecution and on the basis of the statements of the appellant, the appellant can be said to have contravened the provisions of Section 5(1)(aa) of the Act, which runs thus: ... no person in, or resident in, India shall receive, otherwise than through an authorised dealer, any payment by order or on behalf of any person resident outside India. In order to constitute a contravention with regard to the above provisions, the following two ingredients must be satisfied: (1) A person in, or resident in, India must have received payment, otherwise than through on authorised dealer and (2) the said payment must have been received by order or on behalf of any person resident outside India. It may be taken that the first ingredient is satisfied, since the appellant, who is a resident in India, has received payment of Rs. 1,90,000/-, otherwise than through an un-authorised dealer. But, can it be said that he had received the said payment, on the instructions or on behalf of any person resident outside India, known or unknown in order to satisfy the second ingredient? According to the original statement of the appellant dated 3.4.1973, he received this sum of Rs. 1,90,000/-, otherwise than through an un-authorised dealer. But, can it be said that he had received the said payment, on the instructions or on behalf of any person resident outside India, known or unknown in order to satisfy the second ingredient? According to the original statement of the appellant dated 3.4.1973, he received this sum of Rs. 1,90,000/- from Abubacker of Mayavaram at the request of the said Abubacker of Mayavaram, who is a resident in India, for the purpose of carrying the money to Nagore, keeping it there in his house for a day or two, to be returned to the said Abubacker on demand. It may be that the said Abubacker had received this payment by order or on behalf of any person resident outside India, but so for as the appellant is concerned he has acted merely as an employee or servant of the said Abubacker, for the purpose of transporting the amount to Nagore, keeping it safe in his house and paying it back to the said Abubacker on demand. The appellant cannot, therefore, be said to have received payment under instructions from or on behalf of any person resident outside India. 8. In his additional statement dated 5.4.1973, the appellant has stated that he received payment from Abubacker of Mayavaram on behalf of Syed Muhammad of Pudumanai Street, Nagore. As already pointed out, the said Syed Muhammad in his statement has stated that he sent the appellant not to Mayavaram to receive payment from Abubacker, but to Madras to receive payment from on Dawood, Door No. 2, Muthugramani Street, Periamet, Madras. There is thus a clear conflict between the versions of the appellant and the said Syed Muhammad and much reliance cannot, therefore, be placed on the additional statement given by the appellant. Even assuming that the additional statement given by the appellant is true, the appellant has received the payment of Rs. 1,90,000/- from Abubacker of Mayavaram under instructions from and on behalf of Syed Muhammad, who is a resident in India and who is not a resident outside India. As pointed out by a Bench of this Court in K. Narayanaswamy v. Deputy Director, Enforcement Directorate, Madras mere receipt of the amount by a resident of India on instructions of another, also a resident in India, cannot constitute contravention of Section 5(1)(aa) of the Act. 9. As pointed out by a Bench of this Court in K. Narayanaswamy v. Deputy Director, Enforcement Directorate, Madras mere receipt of the amount by a resident of India on instructions of another, also a resident in India, cannot constitute contravention of Section 5(1)(aa) of the Act. 9. As already slated, the statements of Abdul Rahman Sahib and Abdul Kader Masthan Haji do not implicate the appellant. They have only stated that they used to send moneys to India to be collected by Syed Muhammad of Pudumanai Street, Nagore. If the said Syed Muhammad had employed the appellant for the purpose of receiving payments, it is only a case of the appellant acting on the instructions of or on behalf of the said Syed Muhammad, who is a resident in India. The materials on record do not disclose any nexus between the appellant and any person resident out of India and there is absolutely no ground to held that the appellant has violated the provisions of Section 5(1)(aa) of the Act. 10. It is then seriously contended by the learned Counsel for the Department that under Section 23-EE of the Act, an appeal shall lie to his Court only on questions of law from any decision or order of the Appellate Board and as no question of law is involved the appeal is incompetent. The contention is clearly unsound and untenable. The question whether on a given set of facts any offence or any violation of the provisions of law is made out, is a question of law. When the question is whether a given set of facts gives rise to a legal right or liability, the inference is one of law and the question of such inference is a question of law. The appeal is, therefore, perfectly competent. 11. It is finally contended by the learned Counsel for the Department that even if the penalty is set aside, there is no ground for setting aside the order of forfeiture of the currency to the tune of Rs. 25,000/- seized from the appellant. This contention is again unsound. Where a person is found to have not violated any provision of law with respect to any property seized from him, the said property has to be returned to him. 25,000/- seized from the appellant. This contention is again unsound. Where a person is found to have not violated any provision of law with respect to any property seized from him, the said property has to be returned to him. Under Section 23(1B) of the Act the authority adjudging any contraventions may direct that any currency, security, gold or silver, or goods or any other money or property, in respect of which the contravention has taken place, shall be confiscated to the Central Government. It is clear, therefore that a contravention must have taken place in respect of the property, which is ordered to be confiscated. Since the appellant is found to have committed no contravention of the provisions of Section 5(1)(aa) of the Act, there is no power to confiscate the amount recovered from him. 12. In the result, the appeal is allowed. The orders of the Foreign Exchange Regulation Appellate Board and the Additional Directorate, Enforcement Directorate, Madras, imposing a penalty of Rs. 10,000/- on appellant and confiscating the sum of Rs. 25,000/- recovered from the person of the appellant, are set aside. The penalty, if collected, together with the amount confiscated, shall be refunded to the appellant. No costs