Karol Grabinski, 39, and Barbara Karina Walczak, 24, were found pitching up a tent on a gazebo at Purnama Beach and enjoying their meals on March 22 as Balinese celebrated Nyepi, a public holiday in Indonesia when no one is allowed to stay outside or be in a public area.
When local police patrolled the area, they ordered the two to return to their hotel, telling them it was Nyepi celebration in Bali, Jakarta Post reported.
However, the duo argued with the police telling them that they did not have money to pay for a hotel as they had a limited budget for their vacation in Bali.
Police then detained them and handed them over to immigration officers for questioning.
The two came to Indonesia with visas on arrival and their residence permits were valid until March 29.
Bali has been stepping up law enforcement regarding foreigners, even banning them from riding motorcycles following a string of deadly accidents.