Uncorroborated customs statements and denied cross-examination cannot sustain a foreign exchange charge

Uncorroborated statements recorded under Section 108 of the Customs Act, 1962 could not sustain a charge under the Foreign Exchange Regulation Act, 1973 where surrounding documentary material, including evidence from Hong Kong Customs, contradicted them. A third-party statement was treated as unreliable in adjudication because cross-examination was denied, and the adjudicating authority was criticised for relying on material not properly formed into the notice and for misappreciating the record. On that evidentiary basis, the charge failed and the appellate decision was upheld.

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Issues: Whether the statements recorded under Section 108 of the Customs Act, 1962 and the statement of a third party could be relied upon to sustain the charge under the Foreign Exchange Regulation Act, 1973.

Analysis: The statements recorded under Section 108 of the Customs Act, 1962 were found to lack corroboration from the other material on record and were contradicted by the documentary evidence obtained from the Hong Kong Customs authorities. The third party statement was treated as inadmissible in the adjudication proceedings because cross-examination had been denied. The adjudicating authority was also found to have relied on material not properly made the basis of the notice and to have misappreciated the evidentiary value of the record.

Conclusion: The evidence was insufficient to sustain the charge, and the Appellate Board's decision was upheld. The appeal was dismissed.

Ratio Decidendi: A charge under the Foreign Exchange Regulation Act, 1973 cannot be sustained on uncorroborated statements under Section 108 of the Customs Act, 1962 when the surrounding evidence contradicts them, and a third-party statement cannot be relied upon where cross-examination is denied.

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