Retraction and inconsistent statements failed to prove foreign exchange contravention; penalty could not be sustained.

Material relied on to prove contravention of section 9(1)(a) of the Foreign Exchange Regulation Act, 1973 was found insufficient because the supporting statements were inconsistent and the appellant's statement had been retracted. A retracted statement required corroboration in material particulars, but the other person's statement did not clearly confirm that the appellant made the alleged payment in the manner asserted. As the contradictory versions were not satisfactorily reconciled, the evidentiary record did not meet the standard needed to establish the contravention, and the penalty finding could not be sustained.

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Issues: Whether the material on record sufficiently proved contravention of section 9(1)(a) of the Foreign Exchange Regulation Act, 1973 so as to sustain the penalty.

Analysis: The statements relied upon by the adjudicating authority were not mutually consistent. The appellant's statement was later retracted and, in that situation, required corroboration in material particulars. The statement of the other person did not clearly support the conclusion that the appellant had made the impugned payment in the manner alleged, and the contradictory versions were not satisfactorily reconciled. In these circumstances, the evidentiary record fell short of the standard required for upholding the contravention.

Conclusion: The alleged contravention was not established and the finding of penalty could not be sustained.

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