Retraction of confession and corroboration can sustain foreign exchange liability, while penalty may be reduced after confiscation.

A retracted confessional statement can be relied on in foreign exchange contravention proceedings if the retraction is belated, unsubstantiated, and the statement is found voluntary and corroborated by surrounding evidence such as co-noticee testimony, seizure material, and recovered documents. On that footing, contravention of sections 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973 was sustained. The penalty may nevertheless be moderated where confiscation of the seized amount has already been ordered and the overall punishment is excessive; accordingly, the monetary penalty was reduced.

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Issues: (i) Whether the appellant's retracted confessional statements could be acted upon and were sufficiently corroborated to sustain the finding of contravention of sections 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973. (ii) Whether the penalty imposed was excessive and liable to be reduced.

Issue (i): Whether the appellant's retracted confessional statements could be acted upon and were sufficiently corroborated to sustain the finding of contravention of sections 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973.

Analysis: The retraction was made belatedly and was unsupported by documentary material showing coercion, threat, or physical assault. The appellant did not discharge the burden of proving that the statements were involuntary. The statements were found to be corroborated by the co-noticee's statement, the seizure of currency, and the recovered documents. A retracted confession may be relied upon when the Court is satisfied about its voluntariness and finds corroboration in surrounding circumstances.

Conclusion: The finding of contravention was sustained and the appellant's challenge on voluntariness failed.

Issue (ii): Whether the penalty imposed was excessive and liable to be reduced.

Analysis: Although the contravention stood proved, the confiscation of the seized amount was already ordered. In those circumstances, the penalty was considered excessive and reduction was found appropriate to meet the ends of justice.

Conclusion: The penalty was reduced from Rs. 2,50,000 to Rs. 2,00,000.

Final Conclusion: The finding of liability was upheld, but the monetary penalty was scaled down to the amount already deposited, resulting in a partial allowance of the appeal.

Ratio Decidendi: A retracted confession can sustain liability if it is found voluntary and is corroborated by independent or circumstantial evidence, and the penalty may be moderated where confiscation has already been ordered and the overall punishment is excessive.

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