Retraction of statements does not defeat abetment liability when corroborated by records and statutory presumption remains unrebutted.

Retracted statements may support abetment liability under foreign exchange law when they are substantially corroborated by bank records and other independent material. The tribunal found that the appellant's financing and facilitation of remittances, read with the corroborative record, established intentional aid to the prohibited transaction and the statutory presumption of culpable mental state was not rebutted. On penalty, the appellant's role was limited to abetment, so the sanction was moderated as excessive and the pre-deposit was directed to be adjusted. Liability for abetment was upheld, while the penalty was reduced.

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Issues: (i) Whether the appellant's liability for abetment of contravention under the foreign exchange law was established on the basis of the record and the retracted statements. (ii) Whether the penalty imposed on the appellant required reduction.

Issue (i): Whether the appellant's liability for abetment of contravention under the foreign exchange law was established on the basis of the record and the retracted statements.

Analysis: The record contained multiple statements linking the appellant to the financing and facilitation of the remittances, together with supporting bank records and identifying material. The retracted statements were not treated as unreliable merely because of retraction; they were assessed against corroborative material. The statutory scheme also permitted the drawing of a presumption regarding culpable mental state, which the appellant did not displace. On the facts proved, the conduct amounted to intentional aid and facilitation of the unlawful remittances, attracting abetment liability.

Conclusion: The finding of abetment and contravention was upheld against the appellant.

Issue (ii): Whether the penalty imposed on the appellant required reduction.

Analysis: The appellant's role was confined to abetment, and not to the principal contravention in the same manner as the direct violator. In view of the nature of the proved involvement, the penalty was considered excessive and required moderation to meet the ends of justice.

Conclusion: The penalty was reduced to Rs. 10,00,000/- and the pre-deposit was directed to be adjusted.

Final Conclusion: The appeal succeeded only to the limited extent of reduction of penalty, while the finding of liability for abetment under the foreign exchange law remained undisturbed.

Ratio Decidendi: A retracted statement can sustain liability only when it is substantially corroborated by independent cogent evidence, and abetment under the foreign exchange law is made out where the proved facts show intentional facilitation of the prohibited transaction and the accused fails to rebut the statutory presumption of culpable mental state.

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