Retraction and lack of corroboration defeated foreign exchange penalty; criminal acquittal also supported setting aside the finding.

Penalty for alleged foreign exchange contravention could not be sustained where it rested mainly on retracted statements of the appellant and a co-noticee, without independent corroboration. Cash recovered from a residence was not linked to the appellant's business accounts, and the typed sheets lacked signatures or other reliable proof connecting them to the appellant. The wife's statement was not relied on for the adverse finding. The tribunal also noted the criminal court's acquittal on the same allegations after appraisal of the evidence. On this material, the finding of contravention was not supported and the penalty was set aside.

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Issues: Whether penalty for violation of foreign exchange restrictions could be sustained on the basis of retracted statements, seizure of cash and documents, and the materials on record, and whether the criminal acquittal had bearing on the adjudication.

Analysis: The Tribunal noted that the impugned penalty rested principally on the appellant's retracted statement and the retracted statement of the co-noticee. The cash recovered from the residence was not shown to have been considered against the appellant's business accounts, and the typed sheets did not bear signatures or other reliable proof connecting them to the appellant. The statement of the wife was also not relied upon by the adjudicating authority for the adverse finding. In the absence of independent corroboration, the retracted statements were held insufficient to uphold the finding of contravention. The Tribunal also took note of the criminal court's acquittal on the same allegations, after appreciation of the evidence.

Conclusion: The penalty was not sustainable and was set aside.

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