2008 (7) TMI 1101 - AT - FEMA

Summary

Issues:
1. Appeal against penalty imposed for contravention of foreign exchange regulations.
2. Allegation of violation of natural justice and reliance on retracted admissional statement.

Analysis:

Issue 1: Appeal against penalty imposed for contravention of foreign exchange regulations
The appeal was filed against an adjudication order imposing a penalty on the appellant for receiving/making payments from a person resident outside India in contravention of specific sections. The appellant had made a pre-deposit of 50% of the penalty amount as directed by the tribunal. The investigation stemmed from postal acknowledgments linked to a person of Indian origin but resident outside India. The appellant admitted to receiving and disbursing funds under the instructions of the said person. However, during adjudication, the appellant contended that his admission was obtained under force and torture, challenging the reliance on his statement. The appellant also argued that the lack of cross-examination of the individuals mentioned in his statement violated the principles of natural justice.

Issue 2: Allegation of violation of natural justice and reliance on retracted admissional statement
The respondent argued that the appellant's admissional statement was corroborated by documentary evidence and should be considered valid. The respondent contended that the subsequent retraction of the statement during adjudication proceedings was an afterthought and should not be accepted. The tribunal rejected the argument that the impugned order violated the principle of natural justice, citing the necessity for reasons to demand cross-examination. Referring to legal precedents, the tribunal emphasized that the appellant did not show why cross-examination of the mentioned individuals was essential when his own statement was available. The tribunal also discussed the evidentiary value of the retracted admissional statement, highlighting legal principles that allow reliance on such statements if corroborated by independent evidence. Ultimately, the tribunal found no merit in the appeal, confirming the impugned order and dismissing the appeal.

In conclusion, the tribunal dismissed the appeal, directing the appellant to deposit the balance amount of the penalty within a specified timeframe. The judgment emphasized the voluntary and admissible nature of the appellant's admissional statement and rejected the arguments of violation of natural justice.