2011 (2) TMI 1529 - AT - FEMA

Summary

Issues:
1. Appeal against imposition of penalty under FERA Act, 1973 for contravention of provisions of Section 8(10) and 8(2).
2. Lack of independent evidence to corroborate retracted statements.
3. Allegations of purchasing foreign exchange without specific details.
4. Discrepancies in names and lack of identification parade.
5. Corroboration of statements by co-accused and legal standards for evidence.

The case involved an appeal against a penalty imposed under the FERA Act, 1973 for contravention of provisions of Section 8(10) and 8(2). The appellant denied allegations of purchasing foreign exchange from a co-accused, Mohamed Omar Mistry, for Rs. 15,00,000. The Adjudicating Authority imposed a penalty of Rs. 3,00,000 based on statements and evidence. The appellant argued that there was no independent evidence to support the retracted statements and that the allegations lacked specificity regarding the nature of the foreign exchange. The appellant's counsel contended that the findings were flawed due to the absence of corroborative evidence.

The respondent supported the Impugned Judgment, asserting that the statements of the appellant and Mohamed Omar Mistry were corroborated by other evidence on record. The Chairperson analyzed the arguments, noting that both statements were retracted. Referring to legal precedent, it was highlighted that retracted statements alone cannot serve as the basis for a penalty under FERA without independent corroborated evidence. Mohamed Omar Mistry's statement lacked specific details about the foreign exchange sold, and discrepancies in names raised doubts about the identification of the appellant.

Citing the Supreme Court's stance on confessional statements by co-accused, the Chairperson emphasized the need for corroboration by independent evidence. The Adjudicating Authority's reliance on the statements of the appellant and Mohamed Omar Mistry, without additional corroboration, was deemed insufficient. The lack of specific details of the foreign exchange and discrepancies in names further weakened the case against the appellant. Consequently, the Chairperson set aside the Impugned Order of penalty, ruling in favor of the appellant due to the absence of substantial evidence and lack of connection between the appellant and the alleged transactions.