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TMI Blog2008 (12) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, the office premises of the appellant was searched. Recovery of Indian currency amounting to Rs. 2,65,000/- was made. He was thereafter detained. On the next two succeeding dates, i.e., on 26.10.1994 and 27.10.1994, he allegedly made two statements before the Authorities under the Act, disclosing that all the transactions in the name of M/s Sun Enterprises, Ahmedabad and M/s Suraj Enterprises, Bombay relating to import of goods had been made by him and no import of goods had taken place in the name of the said firms. He is stated to have confessed that he was responsible for remittance of the foreign exchange worth US Dollars 11,400 and US Dollars 22,830. In view of the said purported confession, he was arrested for alleged violation of the provisions of Section 8(3) and Section 9(1)(a) of the Act. We are not concerned with the rest of the statements. 4. He was produced before the learned Chief Metropolitan Magistrate, Bombay on 28.10.1994. Before the said court, he filed an application retracting his confession, stating: "That from 26-10-94 evening till today when I am being produced before this Hon'ble Court, I was illegally detained in the office of the Enforcement Direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n material particulars by some independent evidence. 7. By reason of an order dated 19.3.1996, the appropriate authority, inter alia, relying on or on the basis of the confession made by him imposed a consolidated penalty of Rs. 10 lakhs, stating: "11. I have independently gone through the evidence on record too based on which the impugned show cause notice has been issued. The notice has abundantly and clearly explained the documents seized from him. He has also admitted to the offence in his statements recorded u/s 40 of FERA, which to date, stand. These confessional statements are amply corroborated by the material evidence seized from him which is disclosed above. By not contesting the charges, either in reply to the Show-cause Notice or during Personal hearings fixed, these further stand uncontested and thus confirmed and admitted by the notice. 12. I have, therefore, no hesitation in confirming the charges in impugned SCN again the notice and accordingly hold him guilty of contravention of Sec. 8(3) to the extent of US $ 34,230/- in as much as he failed to utilize the said Foreign exchange for the purpose it was released to him. Further, he is also held guilty of cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from his custody. The appellant has not been able to explain why the names of persons Milan and Anil Verma were told by him to the officers of ED which, on enquiry were found to be wrong and what benefit could be given to him out of his wrong assertion made by him to Enforcement Officers. 19. According to confessional statement of the appellant, bogus trading firms were established and run by him where he used to take foreign exchange for remittance to foreign country for the purposes of import of goods but no import took place despite the fact that the foreign exchange was remitted to Hongkong. On the basis of aforesaid discussion we are of the considered opinion that the remittance of foreign exchange was taken by the appellant for purposes of import of goods but no import of goods was made and foreign exchange was credited on the bank account of foreign national abroad where contravention of Section 8(3) and 9(1)(a) of the Foreign Exchange 1973 is clearly made out. Looking towards this situation, we are of the considered opinion that the impugned order withstands judicial scrutiny and is liable to be confirmed and upheld where the appeal is liable to be dismissed." 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia. Sub-section (2) of Section 8 of the Act prohibits entering into any transaction providing for conversion of Indian currency into foreign currency or foreign currency into Indian currency at rates of exchange other than the ones for the time being authorized by the Reserve Bank of India without its previous general or special permission. Sub-section (3) of Section 8, and Section 9(1)(a) of the Act which are material for our purpose, read as under: "8. Restrictions on dealings in foreign exchange.- (1)............ (2)............ (3) Where any foreign exchange is acquired by any person, other than an authorized dealer or a money-changer, for any particular purpose, or where any person has been permitted conditionally to acquire foreign exchange, the said person shall not use the foreign exchange so acquired otherwise than for that purpose or, as the case may be, fail to comply with any condition to which the permission granted to him is subject, and where any foreign exchange so acquired cannot be so used or the conditions cannot be complied with, the said person shall, within a period of thirty days from the date on which he comes to know that such foreign exchange can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Act or of any rule, direction or order made thereunder, a penalty not exceeding five times the amount or value involved in any such contravention may be imposed. 18. Section 71 of the Act provides for burden of proof in certain cases. Sub-section (2) of Section 71 provides that the burden of proving that the foreign exchange acquired by such person has been used for the purpose for which permission to acquire it was granted shall be on such person. 19. The Act is a special Act, which confers various powers upon the authorities prescribed therein. Even the salutory principles of mens rea and actus reus in a proceeding under the Act may not be held to be applicable. It is now a well settled principle that presumption of innocence as contained in Article 14(2) of the International Covenant on Civil and Political Rights is a human right although per se it may not be treated to be a fundamental right within the meaning of Article 21 of the Constitution of India. [See Article 11(1) of the Universal Declaration of Human Rights (1948) and Article 6.2 of the European Convention for the protection of Human Rights and Fundamental Freedoms (1950) and Article 14.2 of the Intern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Babubhai Udesinh Parmar vs. State of Gujarat [(2006)12 SCC 268]} 22. It is a trite law that evidences brought on record by way of confession which stood retracted must be substantially corroborated by other independent and cogent evidences, which would lend adequate assurance to the court that it may seek to rely thereupon. We are not oblivious of some decisions of this Court wherein reliance has been placed for supporting such contention but we must also notice that in some of the cases retracted confession has been used as a piece of corroborative evidence and not as the evidence on the basis whereof alone a judgment of conviction and sentence has been recorded. {See Pon Adithan v. Deputy Director, Narcotics Control Bureau, Madras [(1999) 6 SCC 1]} 23. The question came up for consideration before a Constitution Bench of this Court in Shanti Prasad Jain vs. The Director of Enforcement [(1963) 2 SCR 297], wherein, inter alia, it was held that the initial burden would be on the Department. 24. It is interesting to note that both the learned counsel have placed strong reliance upon a decision of this Court in K.T.M.S. Mohd. Anr. Vs. Union of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruled that even in passing a detention order on the basis of an inculpatory statement of a detenu who has violated the provisions of the FERA or the Customs Act etc. the detaining authority should consider the subsequent retraction and record its opinion before accepting the inculpatory statement lest the order will be vitiated." (emphasis supplied) 25. Submission of Mr. P.V. Shetty that appellant had special knowledge and that burden of proof would be on him in terms of Section 106 of the Indian Evidence Act, in a situation of this nature, cannot be held to have any substance. The initial burden to prove that the confession was voluntary in nature would be on the Department. The special or peculiar knowledge of the person proceeded against would not relieve the prosecution or the Department altogether of the burden of producing some evidence in respect of that fact in issue. It may only alleviate that burden to discharge and very slight evidence may suffice. This Court in Collector of Customs, Madras ors. Vs. D. Bhoormall [(1974) 2 SCC 544)] while examining the provisions of Sections 167(8) and 178A of the Sea Customs Act, held: "33. Another point to be noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admissions, the law as to confessions is embodied in Sections 24 to 30 of the Evidence Act. Section 25 bars proof of a confession made to a police officer. Section 26 goes a step further and prohibits proof of confession made by any person while he is in the custody of a police officer, unless it be made in the immediate presence of a Magistrate. Section 24 lays down the obvious rule that a confession made under any inducement, threat or promise becomes irrelevant in a criminal proceeding. Such inducement, threat or promise need not be proved to the hilt. If it appears to the court that the making of the confession was caused by any inducement, threat or promise proceeding from a person in authority, the confession is liable to be excluded from evidence. The expression 'appears' connotes that the Court need not go to the extent of holding that the threat etc. has in fact been proved. If the facts and circumstances emerging from the evidence adduced make it reasonably probable that the confession could be the result of threat, inducement or pressure, the court will refrain from acting on such confession, even if it be a confession made to a Magistrate or a person other than police ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any non-police personnel. The court has to be satisfied in such cases, that any inculpatory statement made by an accused person to a gazetted officer must also pass the tests prescribed in Section 24 of the Evidence Act. If such a statement is impaired by any of the vitiating premises enumerated in Section 24 that statement becomes useless in any criminal proceedings." (emphasis supplied) Yet again it was observed: "We hold that a statement recorded by Customs Officers under Section 108 of the Customs Act is admissible in evidence. The court has to test whether the inculpating portions were made voluntarily or whether it is vitiated on account of any of the premises envisaged in Section 24 of the Evidence Act." 33. In Gulam Hussain Shaikh Chougule vs. S. Reynolds, Supdt. Of Customs, Marmgoa [(2002) 1 SCC 155], this Court refused to exercise its discretionary jurisdiction under Article 136 of the Constitution of India opining that the confession was rightly held by the High Court to be voluntary in nature. 34. A person accused of commission of an offence is not expected to prove to the hilt that confession had been obtained from him by any inducement, threat or promise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made to controvert the statements made by appellant in his application filed on 28.10.1994 before the learned Chief Metropolitan Magistrate. Furthermore, the Tribunal as also the Authorities misdirected themselves in law insofar as they failed to pose unto themselves a correct question. The Tribunal proceeded on the basis that issuance and services of a show cause notice subserves the requirements of law only because by reason thereof an opportunity was afforded to the proceedee to submit its explanation. The Tribunal ought to have based its decision on applying the correct principles of law. The statement made by the appellant before the learned Chief Metropolitan Magistrate was not a bald statement. The inference that burden of proof that he had made those statements under threat and coercion was solely on the proceedee does not rest on any legal principle. The question of the appellant's failure to discharge the burden would arise only when the burden was on him. If the burden was on the revenue, it was for it to prove the said fact. The Tribunal on its independent examination of the factual matrix placed before it did not arrive at any finding that the confession being free fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odalia was disclosed by the appellant himself during his statement along with bank accounts of foreign nationals to whom the foreign exchange was remitted to Hongkong." The finding that he was the brain behind and not involved in the actual transaction, therefore, does not meet the requirements of law. 40. In Commissioner of Central Excise, Bangalore vs. Brindavan Beverages (P) Ltd. Ors. [(2007) 5 SCC 388], this Court held as under: "12. Per contra, learned Counsel for the respondents submitted that there is no material that the respondents had ever been parties to the so called arrangement, even if it is accepted for the sake of arguments but not conceded, that such arrangement was in reality made. There was no material brought on record to show that the respondents had any role to play in such matters as alleged. Even the show cause notice did not refer to any particular material to come to such a conclusion. Therefore, the Commissioner and the CEGAT were justified in holding that the respondents were entitled to the benefits. 13. We find that in the show cause notice there was nothing specific as to the role of the respondents, if any. The arrangements as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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