2008 (8) TMI 1036 - AT - FEMA

Issues Involved:
1. Alleged contravention of Section 9(1)(b) and Section 9(1)(d) of the Foreign Exchange Regulation Act (FERA), 1973.
2. Voluntariness and admissibility of the appellant's admissional statement.
3. The impact of the retraction of the admissional statement.
4. The requirement of corroborative evidence.
5. The burden of proof on the Enforcement Directorate.
6. Denial of cross-examination of Jagdish Prasad Karel.
7. Quantum of penalty imposed.

Issue-wise Detailed Analysis:

1. Alleged Contravention of Section 9(1)(b) and Section 9(1)(d) of FERA, 1973:
The appellant was penalized for paying Rs. 12,98,800 to Devkinandan Karel on the instructions of Dilip Shah of Bangladesh, which was considered a violation of Section 9(1)(b) and Section 9(1)(d) of FERA, 1973. The penalty imposed was Rs. 4,00,000 for the contravention of Section 9(1)(b) and Rs. 3,00,000 for the contravention of Section 9(1)(d).

2. Voluntariness and Admissibility of the Appellant's Admissional Statement:
The appellant argued that his admissional statement was made under threat, duress, and coercion. However, the Tribunal found no evidence on record to support these allegations. It was emphasized that the voluntary nature of any statement made before Enforcement authorities is a sine qua non for its admissibility. The Tribunal referred to the Supreme Court's observations in K.T.M.S. Mohd. v. Union of India, which stressed that the burden is on the maker of the statement to establish that it was obtained through improper means.

3. The Impact of the Retraction of the Admissional Statement:
The Tribunal noted that the retraction of the admissional statement does not automatically render it inadmissible. The retracted confession can still form the basis of conviction if found to be voluntary and true. The Tribunal cited K.I. Pavunny v. Assistant Collector (HQ), Central Excise Collectorate, where the Supreme Court held that a retracted confession could be relied upon if corroborated by other evidence.

4. The Requirement of Corroborative Evidence:
While the appellant relied on Mohtesham Mohd. Ismail v. Spl. Director, Enforcement Directorate, which emphasized the need for corroboration, the Tribunal found that the factual position in the present case did not necessitate stricter application of this rule. The Tribunal referred to Naresh J. Sukhawani v. Union of India, where the Supreme Court held that corroboration is not always necessary if the admissional statement is voluntary and true.

5. The Burden of Proof on the Enforcement Directorate:
The appellant argued that the Enforcement Directorate failed to prove the case beyond a reasonable doubt. However, the Tribunal noted that while the burden of proof is on the Enforcement Directorate, it does not need to be stretched to mathematical precision. The Tribunal referred to Collector of Customs v. D. Bhoormull, which stated that the prosecution is not required to prove its case with absolute certainty, but rather to a degree that a prudent person would believe in the existence of the fact in issue.

6. Denial of Cross-Examination of Jagdish Prasad Karel:
The appellant's demand for cross-examination of Jagdish Prasad Karel was denied. The Tribunal cited Transmission Corporation of AP Ltd. v. Ramakrishna Rice Mills, which held that the demand for cross-examination must be supported by sound reasons, and its denial does not necessarily violate the principles of natural justice.

7. Quantum of Penalty Imposed:
The Tribunal found that the amount involved in the contravention was more than the quantum of penalty imposed. It did not consider the penalty to be excessive or harsh. The Tribunal referred to Chairman, SEBI v. Sriram Mutual Fund, where the Supreme Court emphasized that penalties under statutory regulations should be imposed to secure strict compliance without requiring proof of mens rea.

Conclusion:
The Tribunal sustained and maintained the adjudication order, dismissing the appeal for lack of merits. The appellant was directed to deposit the remaining penalty amount within a week from the date of receipt of the order, failing which the respondent could recover the same in accordance with the law.

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