Corroboration required for foreign exchange contravention; an uncorroborated, retracted confession could not sustain penalty.

A penalty for contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 could not rest solely on the appellant's confessional statement recorded under section 40. The record contained no independent evidence that the alleged amount had been received from a person resident outside India, and the statement was retracted. Consistently with Board and court decisions, guilt for such contravention requires corroboration from other material, especially where the confession is uncorroborated. The investigation also failed to produce material supporting the information that triggered it, and the adjudicating authority did not show why that information was reliable. The penalty was therefore unsustainable and the impugned order was set aside.

---

---

Issues: Whether a penalty for contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 could be sustained solely on the basis of the appellant's confessional statement recorded under section 40 of the Foreign Exchange Regulation Act, 1973 without corroborative evidence.

Analysis: The finding of contravention rested only on the appellant's statement. The record contained no independent evidence to establish that the appellant had actually received the alleged amount from a person resident outside India. The applicable legal position, consistently followed in decisions of the Board and courts, is that guilt for contravention cannot be fastened merely on a confessional statement, particularly when retracted, unless there is corroboration from other material. The investigation also did not produce material supporting the information on which it was initiated, and the adjudicating authority had not shown the basis on which that information was regarded as reliable.

Conclusion: The penalty could not be sustained and the impugned order was liable to be set aside.

---