Residency and retracted statements under foreign exchange law upheld where statutory definition, service, and voluntariness were satisfied.

Residency under the Foreign Exchange Regulation Act was assessed on the statutory definition and surrounding circumstances, and a person who returned to India and continued to stay there without showing an intention to remain outside India for an uncertain period was treated as resident in India. Service of show cause notices was upheld where they were sent to the address furnished by the appellant, and affixation was recognised as a valid mode; mere personal non-receipt did not establish breach of natural justice. Retracted statements could still be relied on for penalty proceedings where voluntariness was not disproved and the material supported their truth, with proof governed by preponderance of probability.

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Issues: (i) Whether the appellant was a person resident in India within the meaning of the Foreign Exchange Regulation Act, 1973. (ii) Whether service of the show cause notices and the adjudication proceedings offended principles of natural justice. (iii) Whether the retracted statements recorded from the appellant could be relied upon for sustaining the penalty.

Issue (i): Whether the appellant was a person resident in India within the meaning of the Foreign Exchange Regulation Act, 1973.

Analysis: The expression "person resident in India" and its converse were construed on the plain language of the statutory definition. The appellant had returned to India and continued to stay there for a substantial period, and the surrounding circumstances did not show an intention to stay outside India for an uncertain period. The foreign registration and tax-related materials were found insufficient to establish a resident-outside-India status.

Conclusion: The appellant was held to be a person resident in India, against the appellant.

Issue (ii): Whether service of the show cause notices and the adjudication proceedings offended principles of natural justice.

Analysis: The notices were sent to the address furnished by the appellant, which satisfied the legal duty of service. Service by affixation was recognised as a valid mode under the applicable rules. Mere non-receipt of the notices personally did not establish any procedural unfairness.

Conclusion: No violation of principles of natural justice was found, against the appellant.

Issue (iii): Whether the retracted statements recorded from the appellant could be relied upon for sustaining the penalty.

Analysis: The retraction was not shown to establish that the statements were involuntary or obtained by threat or coercion. The statements recorded before the customs and enforcement authorities were treated as admissible and capable of reliance, subject to the governing rule that voluntariness and truth must be assessed with appropriate caution. The tribunal also emphasised that proof in penalty proceedings is governed by probability and not mathematical certainty.

Conclusion: The retracted statements were held to be usable against the appellant, against the appellant.

Final Conclusion: The appeal failed on the principal legal objections raised, and the penalty adjudication was sustained.

Ratio Decidendi: A person who has returned to India and continues to stay there without showing an intention to remain outside India for an uncertain period is resident in India, and a voluntarily made retracted statement may be acted upon if its truth and voluntariness are established on the material before the authority.

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