1996 (9) TMI 668 - AT - FEMA

Summary

Issues:
- Imposition of penalty under section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 for contravention.
- Appeal against Adjudication Order No. 78/VSI/95/AD.
- Challenge to findings based on confessional statement.
- Lack of corroboration for the allegations.
- Reliability of evidence and initiation of investigation.
- Decision on the appeal and setting aside of the impugned order.

Analysis:
The judgment pertains to an appeal filed against an Adjudication Order imposing a penalty for contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973. The appellant cited personal illness and financial constraints as reasons for not appearing in person. The Chairman waived the pre-deposit requirement and proceeded to hear the appeal on its merits. The appellant contested the Adjudication Order on the grounds that the findings were solely based on a confessional statement obtained under coercion. The appellant argued that there was a lack of corroboration for the allegations and highlighted procedural irregularities in the investigation.

The appellant contended that the confessional statement was extracted under duress and lacked independent evidence to support the allegations. The appellant also raised concerns about the reliability of the evidence presented by the respondent. The appellant's representative argued that the case was initiated based on information from a reliable source, indicating the appellant's involvement in the alleged violation. However, the appellant's defense emphasized the absence of concrete evidence corroborating the confessional statement.

Upon reviewing the material and submissions, the Chairman acknowledged the lack of corroborative evidence to support the allegations against the appellant. The Chairman noted that the investigation was primarily based on the appellant's statement, without substantial evidence from other sources. The Chairman highlighted the importance of corroboration in such cases, citing legal precedents that require evidence beyond a retracted confessional statement to establish guilt. The Chairman also criticized the lack of detailed information regarding the initiation of the investigation and the reliability of the source information.

Ultimately, the Chairman allowed the appeal and set aside the impugned order, emphasizing the insufficiency of evidence to uphold the penalty imposed on the appellant. The decision underscored the necessity of corroborative evidence and proper investigation procedures to substantiate allegations of regulatory violations under the Foreign Exchange Regulation Act, 1973.