2005 (10) TMI 616 - AT - FEMA

Summary

Issues:
1. Imposition of penalty for contravention of FERA, 1973.
2. Confiscation of seized foreign currency.
3. Allegations of statement obtained under physical torture.
4. Failure to retract statement earlier.
5. Burden of proof under section 71(3) of the Act.

Analysis:
1. The judgment pertains to an appeal against an adjudication order imposing a penalty and confiscating seized foreign currency under sections 8(1) and 8(2) of FERA, 1973. The appellant was found guilty of acquiring foreign exchange without proper authorization. Despite multiple opportunities, the appellant failed to appear before the adjudicating authority, leading to the penalty and confiscation.

2. The appellant was intercepted with foreign currency in 1985, which he claimed was received in exchange for gold bars. However, he later retracted this statement after several years. The appellant contended that the currency was left by another person, and his statement was obtained under duress. The appellant's failure to retract the statement earlier raised doubts about the credibility of his claims.

3. The appellant alleged that his original statement was obtained under physical torture and coercion. However, the absence of evidence supporting this claim weakened his argument. The judgment cited the requirement for voluntary statements under relevant laws and emphasized the need to establish any improper means used to obtain a statement.

4. The appellant's failure to retract the statement promptly and his inconsistent explanations raised questions about the credibility of his defense. The judgment highlighted the importance of timely retractions and the burden of proof on the appellant to substantiate his claims.

5. The judgment upheld the findings of the adjudicating authority, emphasizing the appellant's inability to rebut the presumption under section 71(3) of the Act. The section places the burden of proving lawful possession of foreign exchange on the individual found in possession of such currency. Since the value of the seized foreign currencies exceeded the statutory limit, the burden of proof rested on the appellant, which he failed to discharge.

In conclusion, the appeal was dismissed, affirming the penalty and confiscation imposed by the adjudicating authority. The appellant was directed to pay the penalty within a specified timeframe, failing which the respondent could initiate recovery proceedings.