Unreliable seizure evidence cannot sustain contravention findings; cash confiscation falls, while bank drafts remain confiscated.
A finding of contravention under section 9(1)(b) and section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 cannot be sustained on unreliable seized material where the alleged recovery itself is not credibly established. The clarification from the Enforcement Officer undermined the claimed seizure, the envelope and contents did not reliably link the appellant to the transaction, and the other statements did not independently corroborate the alleged violations. The contravention findings were therefore set aside. On confiscation, the cash amount could not stand because no proved linkage to a contravention was shown, so that confiscation was set aside, while the bank drafts were retained since they were disowned by the appellant.
Issues: (i) Whether the findings of contravention under section 9(1)(b) and section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 could be sustained on the basis of the seized documents and the recorded statements. (ii) Whether the confiscation of Rs. 6,000 and the bank drafts was liable to be interfered with.
Issue (i): Whether the findings of contravention under section 9(1)(b) and section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 could be sustained on the basis of the seized documents and the recorded statements.
Analysis: The evidentiary foundation for the alleged violations was found to be unreliable because the clarification from the Enforcement Officer negatived the claim that the relevant documents had been recovered from the appellant's premises in the manner alleged. The seized envelope and its contents were treated as not establishing a credible link with the appellant. The appellant's statement was not accepted as reliable on the facts, and the statements of the other persons did not independently connect the appellant with the alleged transactions. The material relied upon was therefore insufficient to prove the alleged contraventions.
Conclusion: The findings of contravention under section 9(1)(b) and section 9(1)(d) could not be sustained and are set aside.
Issue (ii): Whether the confiscation of Rs. 6,000 and the bank drafts was liable to be interfered with.
Analysis: The confiscation of the cash amount was not supported by any sustainable evidence connecting it with a proven contravention, and therefore could not stand. The confiscation of the bank drafts, however, was maintained because the drafts were disowned by the appellant and the order in that respect was not disturbed.
Conclusion: The confiscation of Rs. 6,000 was set aside, while the confiscation of the bank drafts was upheld.
Final Conclusion: The appellant succeeded in getting the impugned adjudication order and the cash confiscation overturned, with only the confiscation of the bank drafts surviving.
Ratio Decidendi: A finding of contravention cannot be sustained on unreliable seized material and uncorroborated statements where the claimed recovery itself is disbelieved; confiscation must rest on proved linkage to the contravention.
TaxTMI 
AI Drafter ✕
TaxTMI 
