Retracted confession before Enforcement Officer can sustain contravention if voluntary and corroborated, while disproportionate penalty may be reduced.

A retracted confession recorded by an Enforcement Officer under summons may be relied on if it is voluntary, true, and supported by independent surrounding evidence; it is not inadmissible merely because the maker was not in police custody. On the facts, the statement was corroborated by the seizure memo, recovery of gold, undisputed travel details, and other circumstances, so contravention of section 8(1) of the Foreign Exchange Regulation Act, 1973 was established. The penalty, however, was found disproportionate to the limited foreign exchange loss actually proved on the record and was reduced accordingly.

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Issues: (i) Whether the appellant's statement dated 17-7-1989 was voluntary, admissible, and sufficient to establish contravention of section 8(1) of the Foreign Exchange Regulation Act, 1973; (ii) Whether the penalty imposed was excessive and required reduction.

Issue (i): Whether the appellant's statement dated 17-7-1989 was voluntary, admissible, and sufficient to establish contravention of section 8(1) of the Foreign Exchange Regulation Act, 1973.

Analysis: The statement was recorded pursuant to summons and the appellant could not be treated as being in police custody. A confession before an Enforcement Officer does not become inadmissible merely for that reason. The retraction was made after the earliest opportunity, but a retracted confession can still be acted upon if it is found to be voluntary and true. The statement was supported by the seizure memo, the recovery of gold from the appellant and from beneath his seat, the undisputed travel details, and other surrounding circumstances. The plea of non-voluntariness and natural justice violation was not made out.

Conclusion: The statement was voluntary and admissible, and the contravention under section 8(1) stood established against the appellant.

Issue (ii): Whether the penalty imposed was excessive and required reduction.

Analysis: The appellant's own version showed that the foreign exchange equivalent to Rs. 53,000 was used to purchase the seized gold, while UAE Dhirams 400 were spent abroad. On that footing, the monetary penalty imposed by the adjudicating authority was found to be disproportionate to the proved loss of foreign exchange.

Conclusion: The penalty was reduced to Rs. 8,500.

Final Conclusion: The finding of contravention was maintained, but the penalty was substantially scaled down in view of the limited extent of direct foreign exchange loss proved on the record.

Ratio Decidendi: A retracted confession made before an Enforcement Officer may be relied upon if it is voluntary, true, and corroborated by independent surrounding evidence, and such a statement is not rendered inadmissible merely because it was recorded under summons.

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