2010 (2) TMI 410 - HC - Customs

Evidence- The impugned order of the appellate tribunal imposing penalty on the petitioner for violation of the Foreign exchange Registration Act, 1973. this is challenge by the appellant. Held that-. More possession of currency notes may not prove any violation of the statute. There is absence of discussion of such evidence. 7. In that view of the matter, the order of Tribunal dated 29.3.2007 is set aside as against the writ petitioner. The Appellate Tribunal is directed to rehear the appeal on the basis of the above observations within a period of three months from the date of communication of this order.

Summary

Issues:
1. Challenge to the order imposing penalty under the Foreign Exchange Regulation Act, 1973.
2. Validity of the appellate tribunal's decision regarding the use of statements obtained under duress.
3. Requirement of sufficient evidence to establish violation of the Foreign Exchange Regulation Act.

Analysis:
1. The judgment concerns the challenge by the appellant, Raj Kumar Damani, against the penalty imposed upon him under the Foreign Exchange Regulation Act, 1973. The impugned order dated 19th March, 2007, imposed the penalty on the petitioner for violation of the said Act. The key contention revolved around the validity of this penalty order.

2. The crucial issue addressed by the court was the appellate tribunal's decision regarding the use of statements allegedly obtained under duress, torture, or inducement. The court highlighted paragraph 7 of the order, emphasizing the need for evidence to establish the voluntariness of such statements. The court criticized the tribunal for not properly determining the voluntariness of the statements and emphasized that the burden lies on the prosecution to prove the voluntariness of the statements, even if subsequently withdrawn.

3. Another significant aspect of the judgment was the requirement for sufficient evidence to establish a violation of the Foreign Exchange Regulation Act. The court noted that while mere possession of currency notes may not necessarily prove a violation, additional evidence was necessary to establish such a violation. The court found a lack of discussion on this crucial evidence and, consequently, set aside the tribunal's order dated 29th March, 2007, directing a rehearing of the appeal within three months based on the observations made in the judgment.

In conclusion, the judgment delves into the challenges against the penalty order, the proper evaluation of statements obtained under duress, and the necessity of sufficient evidence to establish violations of the Foreign Exchange Regulation Act. The court's decision to set aside the tribunal's order and direct a rehearing underscores the importance of procedural fairness and the requirement for concrete evidence in legal proceedings.