TaxTMI 
TaxTMI 
2015 (8) TMI 1358
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....(1) (b) and 9 (1) (d) of the Foreign Exchange Regulation Act, 1973. The appellant had given a detailed reply through his lawyer (dated Nil) refuting all the allegations levelled against him. 3. It is manifested from the records that the appellant had also sent a retraction letter dated 18.09.1998 to the Deputy Director of Enforcement Directorate stating that the enforcement officials had taken him to their office, tortured by beating and compelled him to write a statement to the effect as if he had received and made payments by order of persons in Singapore and Dubai on Commission basis. 4. The Adjudicating Authority (the Deputy Director of Enforcement Directorate) had passed an order of adjudication(order in original) on 20.09.2000 and thereby concluded that the appellant had contravened the Provisions of Sections 9 (1) (b) and 9 (1) (d) of the Foreign Exchange Regulation Act, 1973 to the extent of Rs. 43,00,000/- and also found him guilty of the charges as afore stated and imposed a penalty of Rs. 2,50,000/- for the contravention of Section 9(1) (b) of the Act and a penalty of Rs. 2,00,000/- for the contravention of Section 9 (1) (d) of the Act by virtue of the powers confe....
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....ived payments of Rs. 23,00,000/- and Rs. 20,00,000/- respectively(totalling to Rs. 43 lakhs) from persons other than authorised dealers in Foreign Exchange by order of one Mohamed Saliq, residing at No.184, Race Course Road, Singapore and one Mr.Ismail, residing at P.Box No.11072, Dubai, respectively, persons resident outside India in contravention of Section 9 (1) (b) of the Act. 9. It is also alleged that the appellant during the said period had made payments of Rs. 23,00,000/- and Rs. 20,00,000/- respectively (totalling to Rs. 43 lakhs) to local persons other than authorised dealers in foreign exchange by order of Mr.Mohamed Saliq, Singapore and Mr.Ismail, Dubai respectively, persons resident outside India in contravention of Section 9 (1) (d) of the Act. 10. Hence, a show cause notice dated 14.05.1999 was issued to the appellant requesting him to show cause in writing within 15 days from the date of receipt of memorandum as to why the adjudication proceedings has contemplated under Section 51 of the Act should not be held against him for the above said contravention. 11. Before the Adjudicating Authority i.e., the Deputy Director of Directorate of Enforcement, the lear....
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....tandard of proof, namely, about the existence or non existence of the circumstances from the point of view of a prudent man. The Section is so worded as to provide for two conditions of mind, first, that in which a man feels absolutely certain of a fact, in other words, "believe it to exist" and secondly in which though he may not feel absolutely certain of a fact, he thinks it so extremely probable that a prudent man would under the circumstances act on the assumption of its existence. The Act while adopting the requirement of the prudent man as an appropriate concrete standard by which to measure proof at the same time contemplates of giving full effect to be given to circumstances or condition of probability or improbability. It is this degree of certainty to be arrived where the circumstances before a fact can be said to be proved. A fact is said to be disproved when the Court believes that it does not exist or considers its nonexistence so probable in the view of a prudent man and now we come to the third stage where in the view of a prudent man the fact is not proved i.e., neither proved nor disproved. It is this doubt which occurs to a reasonable man, has legal reco....
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....also submitted that in the show cause notice dated 14.05.1999, issued by the Deputy Director of Enforcement Directorate had never referred to the diary which was said to have been seized by the officials of the Enforcement Directorate, nor even the contents of the said diary were disclosed or communicated to the appellant at any point of time. He has also argued that if the diary was produced, it would have revealed that there was no entry or even no names of the senders and the recipients were mentioned. On this ground, the learned counsel has urged before this Court that an adverse inference had to be necessarily drawn as against the officials of the Directory of Enforcement. 17. It is the case of the first respondent that on 17.09.1998, when the three residential premises of the appellant were searched by the officials of the Enforcement Directorate, they had seized the diary from one of the residential premises of the appellant bearing Door No.95. While so, a statement was recorded by them on the narration of the appellant. 18. It is alleged that in his statement, he had stated that he had received the payments of Rs. 23,00,000/- and Rs. 20,00,000/- respectively, totallin....
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....nts from the appellant Mr.Suresh, and this ground would go a long way to show that the allegations with regard to the receipt and payment was only a fabricated theory. 21. Mr.B.Satish Sundar, learned counsel has also stuck on the point that in a quasi criminal proceeding the allegation with regard to the contravention could not be presumed to have taken place and that every receipt and payment have to be proved with evidence. 22. On the other hand Mr.M.Dhandapani, learned counsel appearing forthe first respondent has submitted that as observed by the Adjudicating Authority in their order, the Department was not required to prove its case with mathematical precision to a demonstrable degree. What is required is the establishment of such a degree of probability that a prudent man may, or its basis believe in the existence of the fact in issue, the other cardinal principle which has an important bearing on the incidence of burden of proof is the sufficiency and weight of the evidence to be considered. He has also indicated that the important peace of documentary evidence i.e., diary was seized from the custody of the appellant, which was containing address and telephone numbers ....
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....gation from a person, who has been indicted, the statement requires to be corroborated, at least on general particulars. When there is no corroboration, it cannot be construed that the said statement has been proved in its entirety. 29. Of course, the alleged statement which is said to have been recorded from the appellant seems to be inculpatory in nature, which was subsequently refuted and retracted by the appellant. There is a distinction between the phraseologies viz "admission" and "confession". A statement or a declaration of an independent fact from which guilt may be inferred is not a confession. It is an admission of a particular fact pertinent to the issue and evidence of that fact, but it is not "confession". The distinction drawn between admission and confession in criminal law is substantial one. Confession involves a voluntary acknowledgement of guilt. To make an admission or a declaration, or a confession, it must amount to a clear acknowledgement of guilt. 30. In this connection, we would like to have the reference to the observations made by HOLLOWAY .J in an American case (State Vs. Guie, 56 Mont 485, cited wig Section 821), He explains this decision in the ....
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....ave been obtained by any inducement, threat, coercion or by any improper means that statement must be rejected brevi manu. At the same time, it is to be noted that merely because a statement is retracted, it cannot be recorded as involuntary or unlawfully obtained. It is only for the maker of the statement who alleges inducement, threat, promise etc., to establish that such improper means has been adopted. However, even if the maker of the statement fails to establish his allegations of inducement, threat, etc., against the officer who recorded the statement, the authority while acting on the inculpatory statement of the maker is not completely relieved of his obligations in at least subjectively applying its mind to the subsequent retraction to hold that the inculpatory statement was not extorted. It thus boils down that the authority or any court intending to act upon the inculpatory statement as a voluntary one should apply its mind to the retraction and reject the same in writing. It is only on this principle of law, this Court in several decisions has ruled that even in passing a detention order on the basis of an inculpatory statement of a detenu who has violated the provisio....
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.... a criminal case or a quasicriminal case but there cannot be any doubt whatsoever that the court is obligated to take into consideration the pros and cons of both the confession and retraction made by the accused. It is one thing to say that a retracted confession is used as a corroborative piece of evidence to record a finding of guilt but it is another thing to say that such a finding is arrived at only on the basis of such confession although retracted at a later stage. 34. On coming to the instant case on hand, while giving reply dated 03.03.1999, to the retraction letter of the appellant dated 18.09.1998, we find that, the Deputy Director of Enforcement Directorate has not considered the retraction letter of the appellant properly and without applying his mind, he has simply and mechanically given that reply saying that " I reject your allegations contained in your above said letter as baseless, afterthought and devoid of any merits." 35. Keeping in view of the above fact, we find that the Appellate Tribunal has committed a grave error in stating that the retracted statement of the appellant had been corroborated by relying upon the alleged seizure of Diary, which is not....