Retraction of statement does not bar reliance where documentary corroboration supports foreign exchange contravention on probabilities.

A voluntary statement made before enforcement can be relied on in foreign exchange contravention proceedings even if later retracted, provided the retraction does not establish inducement, threat, or coercion. The statement may also be supported by co-noticee material and recovered documents, including electronic records, which can provide independent corroboration of unauthorised foreign exchange transactions outside India. In quasi-criminal proceedings of this kind, the department need only establish the case on a preponderance of probabilities, and the evidence need not satisfy mathematical precision. On that basis, the finding of contravention was upheld and the penalty sustained.

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Issues: Whether the appellants were liable to penalty for contravention of foreign exchange restrictions on the basis of their admissions and the recovered documents; and whether a retracted statement, together with a co-noticee's statement and documentary material, could sustain the finding of guilt.

Analysis: The admitted statements recorded by the enforcement authorities were not hit by sections 25 and 26 of the Indian Evidence Act, 1872, because such officers were not police officers. A retracted statement is not automatically unreliable merely because it has been retracted; the maker must show inducement, threat or coercion, and the authority must consider the retraction while assessing voluntariness and truth. The recovered documents and computer floppies provided independent assurance to the statements and supported the inference that foreign exchange transactions had occurred outside India without permission. In quasi-criminal proceedings, the department is not required to prove the case with mathematical precision, and the burden may be lightened by presumptions and facts specially within the knowledge of the person proceeded against.

Conclusion: The finding of contravention was upheld, and the penalty was sustained. The appeals failed.

Final Conclusion: The adjudication order imposing penalty for foreign exchange contravention was affirmed, and the appellants remained liable to the imposed penalty.

Ratio Decidendi: A voluntary statement made before enforcement officials, even if later retracted, may be relied upon with corroborative documentary material, and in proceedings of this nature the department may establish guilt on a preponderance of probabilities without mathematical precision.

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