Retracted statements and corroborating evidence can sustain over-invoicing findings and a proportionate foreign exchange penalty.

A retracted inculpatory statement may be relied on in a foreign exchange contravention case if it is voluntary, true and broadly supported by documentary and surrounding evidence. On that basis, the Tribunal treated the export invoices as inflated, accepted that the differential amount was returned in India, and upheld the finding of over-invoicing. It also held that the penalty was proportionate to the gravity and extent of the violation and declined interference merely because the appellants disputed liability or sought a lesser sanction. The adjudication order was therefore affirmed in full.

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Issues: (i) Whether the appellants were guilty of over-invoicing export consignments and thereby contravened the foreign exchange law on the basis of the recorded statements and surrounding evidence. (ii) Whether the penalty imposed was excessive or harsh.

Issue (i): Whether the appellants were guilty of over-invoicing export consignments and thereby contravened the foreign exchange law on the basis of the recorded statements and surrounding evidence.

Analysis: The Tribunal treated the statements recorded from the appellants and the co-noticee, along with the documentary material and the circumstances of negotiation through the middleman, as sufficient to establish that the export invoices were inflated and that the differential amount was returned in India. It held that a retracted statement can be acted upon if it is shown to be voluntary and true, and that mere bald allegations of threat or coercion are insufficient. The Tribunal also applied the principle that a confession or admission must be read as a whole and that corroboration need not extend to every detail if the general trend of the statement fits the proved facts.

Conclusion: The charge of over-invoicing and contravention was proved and the finding of liability was upheld.

Issue (ii): Whether the penalty imposed was excessive or harsh.

Analysis: The Tribunal considered the amount involved in the contravention and held that the penalty was proportionate to the gravity and extent of the violation. It found no basis to interfere with the quantum merely because the appellants disputed liability or sought a lesser penalty.

Conclusion: The penalty was not excessive and was sustained.

Final Conclusion: The adjudication order was affirmed in full and the appeals failed on merits.

Ratio Decidendi: A retracted inculpatory statement may be relied upon when it is voluntary, true, and broadly corroborated by the surrounding evidence, and the penalty for a proved foreign exchange contravention will not be reduced merely because it is substantial.

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