Retracted statement admissibility upheld when voluntary and corroborated; confiscation under foreign exchange contravention affirmed, penalty moderated.

Retracted statements may be treated as admissible evidence if voluntariness is established and independent, cogent corroboration exists; the tribunal relied on the declarant's handwriting, supporting witness statements and cash recovery to validate a retracted statement. Where proceeds of an alleged gold sale could not be shown lawful, confiscation of recovered funds was upheld as proper relief for contravention of foreign exchange law, while the monetary penalty was moderated on equitable and procedural grounds, resulting in upheld confiscation and a reduced penalty.

---

---

Issues: (i) Whether the retracted statement dated 19.03.2012 could be treated as admissible and relied upon despite subsequent retraction; (ii) Whether the confiscation of Rs.56,25,000/- and the penalty imposed under Section 3(c) of the Foreign Exchange Management Act, 1999 should be upheld or modified.

Issue (i): Whether the retracted statement dated 19.03.2012 is admissible and can be relied upon despite subsequent retraction.

Analysis: The statement was in the declarant's handwriting; supporting statements from other witnesses and recovery of cash provided corroboration; competent authority examined and rejected the retraction after inquiries; relevant precedents permit reliance on a retracted statement when independently corroborated and when voluntariness is established.

Conclusion: The retracted statement is admissible and may be relied upon as corroborated evidence.

Issue (ii): Whether the confiscation of Rs.56,25,000/- and the monetary penalty under Section 3(c) of the Foreign Exchange Management Act, 1999 should be upheld or modified.

Analysis: Independent evidence failed to establish lawful import or provenance of the alleged gold sale proceeds; corroborative witness statements and recovery of the cash supported contravention under Section 3(c) of the Foreign Exchange Management Act, 1999; however, the monetary penalty amount was reconsidered in light of the confiscation already effected and procedural relief previously directed regarding pre-deposit.

Conclusion: The confiscation of Rs.56,25,000/- to the Central Government is upheld; the monetary penalty is reduced to Rs.2,01,000/-.

Final Conclusion: The appeal is partly allowed by upholding the confiscation while reducing the penalty, reflecting a split outcome on evidentiary admissibility versus quantum of penalty.

Ratio Decidendi: A statement retracted by its maker may be acted upon if it is shown to be voluntary and is substantially corroborated by independent and cogent evidence; where confiscation of alleged illegally obtained foreign exchange is supported by corroboration and recovery, confiscation may be upheld while penalty may be moderated on equitable grounds.

---