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TMI Blog1996 (2) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... ian currency of Rs. 2 lakhs. This allegation is contained in SCN II. In addition to the above penalty the learned Adjudicating Officer also ordered the confiscation of US $2,000 (US $ 1200 each + US $ 800 after encashment of TCs), stg. pound 65 KD 20, FF 500 and the Indian currency of Rs. 1,98,000. The balance of Indian currency of Rs. 2,000 has been ordered to be released and to be adjusted against the amount of penalty. 2. Sh. Handoo, the learned counsel for the appellant, prayed for dispensing with the requirement of pre-deposit on the ground that the seized Indian currency of Rs. 2 lakhs is already with the respondents, that the order of confiscation of Indian currency is prima facie untenable in law and that the finding of sale and purchase of foreign currency is solely based on the retracted confessional statement of the appellant and, therefore, the said finding cannot be sustained in law. In view thereof, Sh. Handoo contended that the appellant has a strong prima facie case on all counts and the pre-deposit of the amount of penalty would cause undue hardship to him. Sh. Gadoo, appearing for the respondent, submitted that the finding of contravention is not based merely on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o create the nexus is in the appellant s purported statement under section 40, which cannot be taken into evidence in law as the same is not voluntary. He also submitted that since the statement was retracted on the first opportunity, it cannot form the basis of the alleged contravention in a business of any corroborative evidence. 5. I find full force in Sh. Handoo s submissions. I am not inclined to accept Sh. Gadoo s contention that the corroborative evidence is that of the recovery of foreign currency (is not relevant). It has to be borne in mind that the corroboration has to be of material particulars, that is to say of sale of foreign currency which is the allegation in SCN II. Moreover, in view of the legal position, it cannot be disputed that if the confessional statement is found to be involuntary, it cannot be taken into evidence and any further enquiry, whether it is true or not, is not called for. It has also to be noted that at the time when the Indian currency was recovered and seized the respondent did not have with them any information about the alleged sale of US $6,000 because this information is alleged to have been furnished by the appellant subsequently during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s left by one of the customers of the appellant for safe custody and that the same did not belong to him. In support of this stand Sh. Handoo submitted that out of the total travellers cheques only 2 were signed at both the places. The remaining cheques were therefore cannot be considered to be foreign exchange in terms of the definition of that expression as contained in section 2(h) read with section (g) (f) of the Act. Having regard to the said statutory provisions I have no hesitation in accepting this position. Sh. Handoo further submitted that since these unsigned cheques were of no value to the appellant, it is unbelievable that he would have purchased the same. He submitted that since these cheques were found along with the other foreign currency, it is clear that the entire seized foreign exchange did not belong to the appellant and the learned Adjudicating Officer ought not to have rejected the appellant s clarification given at the first opportunity that the foreign currency did not belong to him. He submitted that several persons used to come to his booth for making calls and he recognised them by face but did not have their names and addresses; that the name of Raju wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I find force in the submission made by Sh. Gadoo in regard to foreign currency. Sh. Handoo has not been able to bring out any evidence to establish that the foreign currency came into his possession lawfully. His story that the same was given to him by his customers for safe custody is a mere possibility, unsubstantiated by any evidence and for that reason, cannot be accepted. Those travellers cheques which were not signed at both the places, no doubt, would not be treated as foreign exchange and therefore, the appellant cannot be held guilty of section 8(1) insofar as these cheques are concerned. However, since the cheques were not signed at two places, there was no reason for the owner of these cheques to keep the same in safe custody of the appellant. The appellant ought to have known that the travellers cheques were of foreign origin and related to foreign currency. Therefore, he should not have agreed to keep them for safe custody unless he was sure that they were the property of the person who kept the same with him. In view thereof the appellant s conduct of having those cheques in possession certainly lacks in bona fides, even if it does not amount to contravention of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) that the foreign exchange found to be in his possession came into his possession lawfully and there is no general or special permission of the RBI to permit him to acquire the same, he has to be held guilty of otherwise acquiring the said foreign exchange in violation of section 8(1). 13. In the result, the appeal is partly allowed. The order of confiscation of Indian currency of Rs. 1,98,000 is set aside, while the confiscation of foreign currency, including the encashment of TCs of the value of US $ 800, is upheld. The finding of contravention of section 8(1) on the part of the appellant is also upheld but of the contravention of otherwise acquiring foreign exchange in violation of that provision. The finding of contravention of section 8(2) is set aside. The finding of contravention of section 8(1) and 8(2) in respect of the amount of US $ 6,000 relating to the charge contained in SCN II is set aside and so is the penalty imposed therefor. However, I am not inclined to reduce the penalty of Rs. 32,000 which was imposed for the charge of contravention of section 8(1) and 8(2) as contained in SCN I merely because the contravention of section 8(2) has been set aside. That penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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