2009 (6) TMI 1031 - AT - FEMA

Tribunal Upholds Order: Appellant's Allegations Substantiated by Evidence, Ordered to Pay Remaining Penalty Within a Week.

Hotchand Daulatram Taurani Versus Director, Enforcement Directorate

The Tribunal dismissed the appeal, upholding the impugned order. It determined that the admissional statement, corroborated by the recovered chits and ... - Issues Involved:1. Admissibility of recovered loose chits as evidence.2. Validity of admissional statements recorded under alleged threat and coercion.3. Legitimacy of the recovered Indian currency claimed to be from a cassette business.4. Burden of proof regarding the involvement in contraventions under the FER Act.Issue-wise Detailed Analysis:1. Admissibility of Recovered Loose Chits as Evidence:The appellant argued that the recovered loose chits could not be taken into evidence and that the seized Indian currency of Rs. 6,70,000/- was not involved in the contravention of the FER Act. The Tribunal noted that while the recovery of loose chits was questioned, it was not outrightly denied. The Tribunal emphasized that the writings in the chits, although not amounting to an account book under Section 34 of the Indian Evidence Act, still constituted a valid piece of evidence. The Tribunal clarified that the Indian Evidence Act's provisions are not directly applicable to FERA proceedings, thus the chits could not be disregarded without proper examination.2. Validity of Admissional Statements Recorded Under Alleged Threat and Coercion:The appellant contended that his admissional statements were recorded under threat and coercion, citing judgments in Vinod Solanki v. Union of India and Mohtesham Mohd. Ismail v. Special Directorate, Enforcement Directorate. However, the Tribunal found that the appellant's description of threat and coercion was delayed and coincided with his bail application. The Tribunal concluded that admissional statements, even if retracted, could still be accepted as evidence if corroborated by other facts, referencing K.I. Pavunny v. Assistant Collector (HQ), Central Excise Collectorate, Cochin. The Tribunal found corroboration in the recovered chits and the admissional statement of the co-noticee.3. Legitimacy of the Recovered Indian Currency Claimed to be from a Cassette Business:The appellant claimed that the recovered Indian currency was related to his cassette business and that the writings on the chits were descriptions of this business. The Tribunal rejected this argument, noting that business records are typically maintained in a more permanent form rather than on loose chits. The Tribunal found the appellant's explanation unconvincing and unsupported by the nature of typical business record-keeping practices.4. Burden of Proof Regarding the Involvement in Contraventions Under the FER Act:The Tribunal discussed the burden of proof in quasi-criminal proceedings, referencing the principle that the prosecution need not prove its case with absolute certainty but must establish a degree of probability sufficient for a prudent person to believe in the existence of the fact in issue. The Tribunal cited Collector of Customs, Madras & Ors. v. D. Bhoormull and other cases to emphasize that the burden of proof can be lightened by the presumption of fact arising from the evidence presented. The Tribunal found that the statements of various individuals corroborated the appellant's involvement in contraventions under sections 9(1)(b), 9(1)(d), and 9(1)(f)(1) of the FER Act.Conclusion:The Tribunal dismissed the appeal, affirming the impugned order. It concluded that the admissional statement, corroborated by the recovered chits and statements of other individuals, supported the allegations against the appellant. The Tribunal directed that the pre-deposited amount of 50% penalty be appropriated towards the penalty and allowed the appellant to deposit the remaining amount within a week, failing which the Enforcement Directorate could recover the same in accordance with the law.