Admissibility of investigative statements upheld where retraction deemed afterthought and documentary corroboration sustained penalties.

The appellate tribunal (AT) addressed whether Enforcement Directorate statements and seized documents could sustain penalty and confiscation under the Foreign Exchange Management Act. It applied the principle that investigative statements remain admissible unless shown to be unreliable, found the subsequent retraction to be an afterthought requiring no independent nullification, and held that the seized ledger, notebook and recipient witness statements furnished adequate documentary corroboration. The tribunal also rejected challenges to search, seizure transfer and procedural delays as not vitiating the adjudication. Outcome: appeal dismissed and penalties and confiscation under FEMA upheld against the appellant.

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Issues: Whether the adjudication order imposing penalty and confiscation under provisions of the Foreign Exchange Management Act, 1999 based on statements recorded on 08.08.2010 and 09.08.2010 and corroborative seized documents is sustainable.

Analysis: The appellate Tribunal examined the admissibility and evidentiary value of statements recorded by the Enforcement Directorate during investigation and the effect of a later retraction. The Tribunal considered whether the retracted statements required independent and cogent corroboration before being relied upon, and whether the seized ledger, notebook and supporting witness statements provided sufficient corroboration of receipts and distributions of funds. The Tribunal also considered the legality of search and seizure and transfer of seized material to the Enforcement Directorate and whether procedural defects in issuance of the show cause notice or delay in filing the complaint vitiated the adjudication. The Tribunal concluded that the statements recorded by the investigating officer of the Enforcement Directorate were admissible, the retraction was an afterthought, and the seized documents and statements of recipients furnished adequate corroboration to support the findings of contravention under the Foreign Exchange Management Act, 1999.

Conclusion: Appeal dismissed; the adjudicating authority's order imposing penalties and confiscation under the Foreign Exchange Management Act, 1999 is upheld against the appellant.

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