Retracted confession requires proof of voluntariness and independent corroboration before any foreign exchange penalty can stand.

A retracted confession in quasi-criminal foreign exchange proceedings cannot be relied on unless the authority first establishes that it was voluntary and free from threat, inducement or coercion; the initial burden lies on the department, though special knowledge may affect how that burden is assessed. A retraction made at the first available opportunity must be considered against the surrounding circumstances, and the maker is not required to prove coercion conclusively. The text also states that a penalty under the Foreign Exchange Regulation Act, 1973 cannot rest solely on a retracted confession and requires substantial independent corroboration. On that reasoning, the penalty and appellate affirmation were set aside.

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Issues: (i) Whether the burden of proving that a confession recorded by enforcement authorities was voluntary and free from threat, inducement or coercion lies on the department when the confession is promptly retracted. (ii) Whether a penalty under the Foreign Exchange Regulation Act, 1973 can be sustained solely on the basis of a retracted confession without independent corroboration.

Issue (i): Whether the burden of proving that a confession recorded by enforcement authorities was voluntary and free from threat, inducement or coercion lies on the department when the confession is promptly retracted.

Analysis: A confession in a quasi-criminal proceeding cannot be acted upon unless its voluntariness is established. A mere retraction does not automatically render the statement inadmissible, but once the maker alleges coercion or threat and retracts at the first available opportunity, the authority must consider the retraction and test the statement against surrounding circumstances. The initial burden is on the department to show that the confession was voluntary; the maker is not required to prove coercion to the hilt. Special knowledge of the proceedee may lighten the department's burden, but it does not displace it.

Conclusion: The burden was on the department to establish voluntariness, and the burden was not validly shifted to the appellant.

Issue (ii): Whether a penalty under the Foreign Exchange Regulation Act, 1973 can be sustained solely on the basis of a retracted confession without independent corroboration.

Analysis: A retracted confession is a weak piece of evidence and, if relied upon, must be substantially corroborated by independent and cogent material. The authorities below did not independently evaluate the retraction or record adequate reasons for rejecting it. The finding of contravention was treated as if the confession alone were sufficient, although the surrounding material did not supply the necessary assurance. In the absence of a proper finding that the statement was voluntary and in the absence of reliable corroboration, the penalty could not stand.

Conclusion: The penalty could not be sustained solely on the basis of the retracted confession.

Final Conclusion: The order of penalty and the appellate affirmation were set aside, and the appellant succeeded with refund of the amount recovered.

Ratio Decidendi: A retracted confession can support penal action only if the authority independently finds it to be voluntary and free from coercion and it is corroborated by reliable independent evidence; the burden to establish voluntariness initially lies on the department.

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