Retraction of statement with corroboration can sustain contravention findings, while penalty may still be moderated.

A retracted statement is not excluded merely because it has been withdrawn; it may still be relied on where the authority considers the retraction and the statement is voluntary and materially corroborated by independent evidence. On the facts, the Tribunal noted supporting material such as seized documents, cash recovery, funded travel expenses, interception of foreign currency and connected statements, and sustained the finding of contravention. It also held that the penalty could be reduced on equitable considerations, taking into account the appellant's age and amounts already seized or deposited, and directed adjustment of those sums.

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Issues: (i) Whether the statements retracted by the appellant and co-noticee could be relied upon for sustaining the findings of contravention when supported by independent corroborative material. (ii) Whether the penalty imposed on the appellant required reduction on the facts and circumstances of the case.

Issue (i): Whether the statements retracted by the appellant and co-noticee could be relied upon for sustaining the findings of contravention when supported by independent corroborative material.

Analysis: A retracted statement is not automatically excluded from consideration. It may be acted upon if the authority applies its mind to the retraction and if the statement is shown to be voluntary and is corroborated by independent and cogent evidence. The Tribunal found that the adjudicating authority had considered the retractions with reasons, and that the record contained corroborating material, including seized documents, cash recovery, evidence of travel expenses being funded, interception of foreign currency, and other connected statements pointing to the appellant's involvement.

Conclusion: The retracted statements were not rendered inadmissible merely by retraction, and the findings of contravention were sustained against the appellant.

Issue (ii): Whether the penalty imposed on the appellant required reduction on the facts and circumstances of the case.

Analysis: While upholding the substance of the adjudication, the Tribunal took note of the appellant's age, the amount already seized and adjusted, and the sum earlier deposited pursuant to the prior proceedings. In these circumstances, the Tribunal held that the ends of justice would be met by reducing the monetary penalty to a lower figure and directing adjustment of the amounts already available with the department.

Conclusion: The penalty was reduced to Rs. 9,00,000/- with adjustment of the amounts already deposited and seized.

Final Conclusion: The appeal succeeded only to the extent of reduction of penalty, while the finding of liability under the foreign exchange law was maintained.

Ratio Decidendi: A retracted statement may be relied upon when it is found to be voluntary and is materially corroborated by independent evidence; however, the quantum of penalty may still be moderated on equitable considerations without disturbing the substantive finding of contravention.

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