Foreign exchange contravention and abetment sustained where retracted confession was corroborated by surrounding evidence and payment arrangements.

A retracted confessional statement can sustain liability when it is voluntary and independently corroborated by other statements and documentary material. On the facts, the Tribunal found payment was made on instructions of a person resident outside India, proving contravention of section 9(1)(d) of the Foreign Exchange Regulation Act, 1973. It also held that the appellant's admitted participation, knowledge of the import arrangement, and corroborative evidence established intentional aid and direct nexus with under-invoiced imports, proving abetment of contraventions under sections 8(3), 8(4) read with section 64(2). The penalty was upheld as proportionate to the proved misconduct.

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Issues: (i) Whether the appellant had contravened section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 by making payment on behalf of a person resident outside India; (ii) Whether the appellant had abetted the contravention of sections 8(3) and 8(4) read with section 64(2) of the Foreign Exchange Regulation Act, 1973 in relation to the under-invoiced imports; (iii) Whether the penalty imposed was justified.

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

Analysis: The appellant's statement, along with corroborative statements of co-noticees and surrounding documentary and circumstantial material, was relied upon to conclude that payment was made to D.C. Shah on instructions of Rajnikant Kedia. The plea of retraction was rejected because no convincing material showed coercion or duress, and the retraction was found unsupported. The statutory restriction under section 9(1)(d) prohibits such payment without Reserve Bank permission.

Conclusion: The contravention under section 9(1)(d) was proved against the appellant.

Issue (ii): Whether the appellant had abetted the contravention of sections 8(3) and 8(4) read with section 64(2) of the Foreign Exchange Regulation Act, 1973 in relation to the under-invoiced imports.

Analysis: Abetment was examined by reference to the settled meaning of intentional aid, instigation, and conspiracy under section 107 of the Indian Penal Code, 1860. On the facts, the appellant's admitted participation in the payment arrangement, his knowledge of the import deal, and the corroboration from co-noticees established active complicity and a direct nexus with the under-invoiced import transaction. The Tribunal treated the retracted confession as reliable because it was supported by other evidence.

Conclusion: The charge of abetment under sections 8(3) and 8(4) read with section 64(2) was proved against the appellant.

Issue (iii): Whether the penalty imposed was justified.

Analysis: Since the substantive contraventions were found proved and the matter involved a serious economic offence, the quantum of penalty was considered proportionate to the gravity of the misconduct. No basis was found to interfere with the adjudicated amount.

Conclusion: The penalty was upheld as commensurate and justified.

Final Conclusion: The appeal failed on merits, the findings of contravention were affirmed, and the adjudication order stood confirmed.

Ratio Decidendi: A retracted confessional statement can sustain liability when it is voluntary or is independently corroborated, and intentional participation in a payment or import arrangement may constitute abetment where there is a direct nexus with the contravention.

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