2008 (7) TMI 1112 - AT - FEMA

Summary

Issues Involved:
1. Contravention of Section 9(1)(f)(1) of the Foreign Exchange Regulation (FER) Act.
2. Admissibility and voluntariness of admissional statements.
3. Corroboration of retracted statements.
4. Burden of proof and standard of proof.

Issue-wise Detailed Analysis:

1. Contravention of Section 9(1)(f)(1) of the FER Act:
The appellants were penalized for making payments in Indian currency amounting to Rs. 6,42,721 to Niranjan J. Shah as consideration for the acquisition of foreign currency (US dollars) outside India without any general or special permission from the Reserve Bank of India (RBI). The penalties imposed were Rs. 1,65,000 each. The adjudication order No. ADJ/94/B/SDE/PKA/2001 dated 24-4-2001 by the Special Director of the Enforcement Directorate was challenged in these appeals.

2. Admissibility and Voluntariness of Admissional Statements:
The appellant in appeal No. 250/01 admitted to receiving foreign currency in lieu of Indian currency. The Tribunal held that admissional statements made before officials of the Enforcement Directorate are admissible under Sections 25 and 26 of the Indian Evidence Act, as these officials are not considered police officers. The Tribunal emphasized that mere allegations of threat and coercion are insufficient without some evidence to support such claims. The Tribunal referenced K.T.M.S. Mohd. v. Union of India [1992] 3 SCC 178, stating that the voluntary nature of any statement is crucial, and retraction alone does not render a statement involuntary or unlawfully obtained.

3. Corroboration of Retracted Statements:
The Tribunal held that retracted admissional statements are admissible and can be relied upon to determine guilt. The Tribunal cited K.J. Pavunny v. Assistant Collector (HQ), Central Excise Collectorate, Cochin [1997] 3 SCC 721, which established that retracted confessions can be used to prove the prosecution's case if they are found to be voluntary and true. The Tribunal also referenced Naresh J. Sukhwani v. Union of India 1996 SCC (Cri.) 76, which held that statements recorded by Customs officials can be used against a co-noticee if the person making the statement admits guilt.

4. Burden of Proof and Standard of Proof:
The Tribunal reiterated that the standard of proof in quasi-criminal proceedings does not require mathematical precision. It cited Collector of Customs v. D. Bhoormull AIR 1974 SC 859, which stated that the prosecution need only establish a degree of probability that a prudent person would believe in the existence of the fact in issue. The Tribunal also referenced State of West Bengal v. Mir Mohammad Omar [2000] 8 SCC 382, which discussed the burden of proof when certain facts are within the personal knowledge of the accused.

Conclusion:
The Tribunal dismissed the appeals, holding that the appellants were correctly found guilty of contravening the FER Act. The penalty amount was deemed reasonable and correct, and the pre-deposited penalty amounts were appropriated towards the penalties. The impugned adjudication orders were sustained and maintained.