2008 (11) TMI 754 - AT - FEMA

Summary

Issues Involved:
1. Admissibility of documents seized from a third party.
2. Admissibility and voluntariness of the confessional statement.
3. Requirement of corroboration for the confessional statement.
4. Failure to hold joint proceedings under Section 72 of the Foreign Exchange Regulation (FER) Act, 1973.
5. Quantum of penalty imposed.

Issue-wise Detailed Analysis:

1. Admissibility of Documents Seized from a Third Party:
The appellant argued that the impugned order was based on entries recorded in documents seized from the residence of a third party, P. Popatlal Shah, who was not tried jointly, violating Section 72 of the FER Act, 1973. The appellant contended that the failure to hold joint proceedings rendered the documents inadmissible in evidence.

2. Admissibility and Voluntariness of the Confessional Statement:
The appellant's confessional statement, where he admitted to receiving Rs. 3 lakhs locally in India under the instruction of his brother-in-law from London, was a key point of contention. The appellant did not retract this statement at any point. The tribunal referred to the Supreme Court's observations in State (NCT of Delhi) v. Navjot Sandhu @ Afsan Guru, which clarified the conditions under which confessions are admissible. The tribunal emphasized that confessions must be voluntary and true, and in this case, the appellant's statement was deemed voluntary as it was not retracted.

3. Requirement of Corroboration for the Confessional Statement:
The appellant argued that without corroborative evidence, the confessional statement should not be the basis of conviction. The tribunal cited several Supreme Court decisions, including Kanhaiyalal v. Union of India, which held that confessional statements made voluntarily and free from threat or inducement can be presumptive evidence of their truth and do not require corroboration for each material particular. The tribunal found that the appellant's confessional statement was corroborated by available documents, thus supporting the impugned order.

4. Failure to Hold Joint Proceedings under Section 72 of the FER Act, 1973:
The appellant contended that the impugned order was vitiated due to the failure to hold joint proceedings against P. Popatlal Shah under Section 72 of the FER Act, 1973. The tribunal noted that the appellant admitted to receiving payment locally in India under the instruction of his brother-in-law, a resident of London. The documents mentioning the appellant's name and his wife's name, showing the payment made, required explanation. The tribunal applied the presumption of fact under Section 114 of the Evidence Act, concluding that the absence of an explanation could not negate the presumption of truthfulness.

5. Quantum of Penalty Imposed:
The appellant argued that the penalty imposed was excessive. The tribunal found that the penalty of Rs. 1 lakh was not excessive or harsh compared to the amount of contravention involved. Therefore, no intervention was required regarding the quantum of penalty.

Conclusion:
The tribunal concluded that the impugned order was justified and sustained. The appeal was dismissed, and the appellant was directed to deposit the balance penalty amount within 7 days from the date of receipt of the order. Failure to comply would result in the respondent taking appropriate action in accordance with the law.