Retraction of confession does not bar reliance when corroborated; burden of lawful possession of foreign exchange shifts to possessor.

A retracted statement under the Foreign Exchange Regulation Act, 1973 may still be relied upon in adjudication if it is not shown to be involuntary and is corroborated by independent documentary and oral evidence. The court also held that a currency declaration form, by itself, does not conclusively explain later possession of foreign exchange where surrounding circumstances point the other way. Once possession of foreign exchange beyond the statutory limit is shown, section 71(3) places the burden on the person in possession to prove lawful acquisition. On the facts, the corroborated statement and supporting material were sufficient to sustain contravention, and lawful possession was not proved.

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Issues: Whether a retracted statement recorded under the Foreign Exchange Regulation Act, 1973 could be relied upon when supported by independent documentary and oral evidence, and whether the person found in possession of foreign exchange had discharged the burden of proving lawful possession under section 71(3) of the Act.

Analysis: A retracted confession does not automatically lose all evidentiary value. Where the statement is not shown to be involuntary and is corroborated by seized documents and the statements of other witnesses, it may be acted upon in adjudication proceedings under the Foreign Exchange Regulation Act, 1973. The Court also held that the production of a currency declaration form by itself does not conclusively explain possession of foreign exchange at a later point in time, especially where the record indicates movement abroad and the surrounding circumstances support the Department's case. Under section 71(3), once possession of foreign exchange exceeding the statutory limit is shown, the burden shifts to the person in possession to prove lawful acquisition.

Conclusion: The retracted statement, read with the corroborating material, was sufficient to sustain the finding of contravention. The appellant failed to discharge the burden of proving lawful possession of the seized foreign exchange, and the departmental action was upheld.

Ratio Decidendi: In adjudication under the Foreign Exchange Regulation Act, 1973, a retracted confession can be relied upon if it is corroborated by independent evidence, and the burden under section 71(3) to prove lawful possession of foreign exchange lies on the person found in possession.

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