Retracted statements and unexplained foreign currency deposits can sustain foreign exchange penalty where lawful possession is not proved.

A retracted statement may still be relied upon in foreign exchange penalty proceedings if it is found voluntary and true, and unsupported allegations of coercion do not displace its evidentiary value. The Tribunal also applied the principle that the burden lies on the appellant to prove lawful possession, import, declaration, and deposit of foreign currency, particularly where unexplained credits appear in multiple NRE accounts. On the facts, the appellant failed to rebut the incriminating circumstances or produce satisfactory proof of lawful acquisition, so the adjudication and penalty were sustained.

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Issues: Whether the penalty imposed for contravention of foreign exchange law was sustainable on the basis of retracted admissions and surrounding circumstances, and whether the appellant had discharged the burden regarding lawful acquisition and deposit of foreign currency.

Analysis: The recorded statements were treated as admissible because the allegation of threat or coercion was unsupported by any material. The Tribunal held that a retracted statement can still be relied upon if it is found to be voluntary and true. It further held that the evidence showed substantial unexplained deposits in multiple NRE accounts and that the appellant had not produced satisfactory proof of lawful import or declaration of the foreign currency. The burden relating to the Currency Declaration Form and lawful possession was not discharged by the appellant. Applying the settled standard that proof in such proceedings need not be mathematical but must establish a prudent probability, the Tribunal found the adjudication to be justified.

Conclusion: The penalty was upheld and the appeal was dismissed.

Final Conclusion: The adjudication order was sustained in full, with the foreign exchange violation and penalty affirmed against the appellant.

Ratio Decidendi: A retracted confession may be acted upon in foreign exchange penalty proceedings if it is found to be voluntary and true, and unexplained foreign currency transactions may sustain liability where the party fails to rebut the incriminating circumstances and corresponding burden of proof.

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