2005 (9) TMI 706 - AT - FEMA

Summary

Issues:
Challenge to adjudication order imposing penalty for contravention of FERA, 1973.
Reliance on confessional statements and documents as evidence.
Burden of proof on the department.
Corroboration of retracted confessional statements.

Analysis:
1. The appellant challenged an adjudication order imposing a penalty for contravention of FERA, 1973 by making payments to individuals in India under instructions from a person in Dubai without RBI exemption. The appellant denied the charges and requested dropping them, leading to adjudication proceedings and the impugned order.

2. The appellant argued that the Department failed to prove the existence of the person in Dubai, crucial for the contravention under FERA. Citing legal precedents, the burden of proof for the offense under section 9 of FERA lies with the department. In this case, the identity of the person in Dubai was not adequately proven, weakening the Department's case.

3. The appellant contended that the confessional statements were obtained under duress and retracted, lacking independent corroborative evidence. However, the Department relied on these statements and seized documents to establish guilt. The absence of the appellant's name in the statements and the lack of proof for the existence of the person in Dubai were highlighted.

4. The Supreme Court's stance on retracted confessions was referenced, emphasizing the need for voluntary confessions and corroboration from other evidence. The court must ensure the confession's voluntariness and truthfulness before relying on it for conviction. The rule of prudence in observing retracted confessions was underlined, emphasizing the importance of voluntary statements in legal proceedings.

5. The Tribunal found the adjudicating authority's reliance on the retracted confessional statement lacking in due consideration of voluntariness and corroboration requirements. Consequently, the impugned order was set aside, and the appeal was allowed, with the appellant's deposit to be refunded. The judgment emphasized the necessity of proper evaluation of evidence and adherence to legal principles in establishing guilt in such cases.