2010 (10) TMI 1158 - AT - FEMA

Summary

Issues involved: Contravention of Sections 8(1) and 40(3) of FER Act, penalty imposition, retraction of confessional statements, false statement under Section 40 of FER Act.

Contravention of Sections 8(1) and 40(3) of FER Act:
The appeals were filed against an Adjudication Order imposing penalties for contravention of Sections 8(1) and 40(3) of FER Act. The investigation revealed that foreign exchange and Indian currency were recovered from the appellants without a legitimate source being explained. The confessional statements of the appellants were retracted, but lacked substantial evidence to support the claim of coercion. The Supreme Court precedent emphasizes the burden of proof on the maker of the statement to establish any coercion, which was not fulfilled in this case. The retracted confessional statements were found to be voluntary and true based on corroborating evidence.

False statement under Section 40 of FER Act:
One of the appellants was charged for giving a false statement under Section 40 of the FER Act. The appellant's statement was contradicted by another individual, leading to the conclusion that a false statement was indeed given. The retraction of the false statement was considered an afterthought made under legal advice, lacking substantial evidence of coercion. The sequence of events, statements, and evidence provided corroboration to the initial statement, indicating its voluntary and truthful nature. The charges were proven beyond reasonable doubt, resulting in the appellants being held guilty and the penalty upheld.

Conclusion:
After careful consideration of the facts, evidence, and circumstances, it was determined that the charges against the appellants were proved beyond reasonable doubt. The penalty amount imposed was deemed appropriate considering the gravity of the charges. The impugned order was confirmed and upheld, leading to the dismissal of the appeals due to lack of merit. The pre-deposited amount was to be appropriated towards the penalty as per the judgment of the Appellate Tribunal for Foreign Exchange.