Foreign exchange contravention upheld, but penalty reduced where retracted confession was corroborated and coercion was unproved.

Contravention of foreign exchange restrictions was upheld where payment to or for the credit of a person resident outside India was made without Reserve Bank permission. The Tribunal treated the appellant's admission, corroborating statements, and surrounding circumstances as sufficient proof, and held that the retraction failed because coercion, threat, or inducement was not established. The finding of guilt was therefore maintained. Although the contravention stood proved, the Tribunal considered the nature of the transaction, the long pendency, and the case circumstances and held the penalty excessive. The monetary penalty was reduced to the amount already deposited.

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Issues: (i) whether the appellant had contravened section 9(1)(a) of the Foreign Exchange Regulation Act, 1973 by making payment to or for the credit of a person resident outside India; (ii) whether the penalty imposed required reduction.

Issue (i): Whether the appellant had contravened section 9(1)(a) of the Foreign Exchange Regulation Act, 1973 by making payment to or for the credit of a person resident outside India.

Analysis: The statutory prohibition under section 9(1)(a) barred any payment to or for the credit of a person resident outside India without permission of the Reserve Bank of India. The appellant's statement admitting payment, the statements of the persons connected with the transaction, and the surrounding circumstances were treated as corroborative material. The retraction of the confessional statement was not supported by evidence showing coercion, threat, or inducement, and the burden to establish such coercion was not discharged.

Conclusion: The contravention under section 9(1)(a) was proved and the finding of guilt was upheld.

Issue (ii): Whether the penalty imposed required reduction.

Analysis: While the contravention was sustained, the Tribunal considered the nature of the transaction, the long pendency of the matter, and the circumstances of the case in assessing the appropriate penalty. On that basis, the penalty was found to be excessive and liable to be brought down to the amount already deposited.

Conclusion: The penalty was reduced to the amount already deposited by the appellant.

Final Conclusion: The finding of contravention was maintained, but the monetary penalty was moderated in the appellant's favour.

Ratio Decidendi: A retracted confession can be relied upon when it is voluntary and is corroborated by independent evidence, and a party alleging coercion must prove it; even where contravention is upheld, the penalty may be reduced if found excessive on the facts.

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