Retracted inculpatory statement can still sustain liability when corroborated by surrounding circumstances

A retracted inculpatory statement may still be relied on where the retraction is vague or unconvincing and corroborative circumstances support the original account. The tribunal found the explanation for the currency and related transactions unsatisfactory, and sustained the finding of liability. Confiscation was reduced, penalty was maintained, and the balance amount was directed to be refunded.

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Issues: Whether the appellant's retracted statement could be acted upon for sustaining the finding of liability and, if so, what penalty and confiscation were justified.

Analysis: The appellant had initially given an inculpatory statement explaining the possession of Rs. 7 lakhs and the surrounding transactions, but later made a retraction that was found vague and unconvincing. The explanation for the currency and the source of the amount was not satisfactorily accounted for. The material was also supported by corroborative circumstances relating to the payments made to different persons, and the earlier statement was therefore not rejected as unreliable merely because of the later retraction.

Conclusion: The finding of liability was sustained, but the confiscation was reduced to Rs. 1 lakh and the penalty of Rs. 2.5 lakhs was confirmed.

Final Conclusion: The order was modified only to the extent of reducing the confiscation, while the penalty was maintained and the balance amount was directed to be refunded.

Ratio Decidendi: A retracted inculpatory statement may still be relied upon where it is found unconvincing in retraction and is supported by corroborative circumstances.

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