TaxTMI 
TaxTMI 
2025 (3) TMI 1607
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appeal, these separate MFAs have been filed by the appellants. Since both MFAs arise from a common order and the questions that arise for consideration are the same, these MFAs are considered and disposed of together. 3. The facts leading to the appeals in brief are as follows: On 13.03.2014, a TATA XENON Pick Up bearing registration No. KL-50C-5203 driven by V.K. Nissar, the appellant in MFA (FEMA) No. 3 of 2024, was intercepted by the Excise Officials at the Muthanga Check Post. A sum of Rs. 92,50,000/- was seized from the vehicle, which was allegedly hawala money received by the said V.K. Nissar to be handed over to the appellant in MFA (FEMA) No.4 of 2024viz., Shuhaib Villan @ Kunhippu. As the appellants could not give a satisfactory explanation regarding the source of the money, the money, articles, paper chits, the vehicle, and its registration certificates were seized by the Excise authorities and were handed over to the Enforcement Directorate officers. Thereafter, the statements of the appellants and others were recorded by the officers of Enforcement, Calicut. Annexure A1 mahazar was prepared, and adjudication proceedings were initiated against the appellants for cont....
X X X X Extracts X X X X
X X X X Extracts X X X X
....FEMA). 4. The following questions of law are considered in these appeals : "1. Whether the State Excise Officials empowered to hand over Seized Currency, Materials and Human Beings to unauthorized Officers without the Sanction of Jurisdictional Magistrate? 2. Whether an Adjudicating Authority can alter the Proposal contained in the Complaint filed under Section 16(3) of FEMA 1999? 3. Whether the Learned Appellate Tribunal for Foreign Exchange can ignore the Ruling of the Hon'ble Supreme Court regarding retracted Confessions? 4. Whether the Principle of 'Double Jeopardy' is applicable as to the investigation by two Agencies of Government of India on the same Cause of Action ?" 5. Heard Sri. Joshi N. Thomas, Advocate for the appellants, Sri. Jaishankar V. Nair, Advocate for R1 and R2, Sri. Haridas P. Nair, learned CGC for R3 in MFA (FEMA) No. 3 of 2024 and Sri. K.R. Raj Kumar, learned CGC for R3 in MFA (FEMA) No.4 of 2024. 6. The learned counsel for the appellants contended that the search and seizure done by the Excise Department is legally unsustainable insofar as the Excise Officials are not competent to hand over the seized materials, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he driver and his associates were compelled to give statements as dictated by the officers, and the same could not have been relied on insofar as the said persons were in illegal custody without the sanction of the competent court. Based on the dictum laid down in K.T.M.S.Mohd. and another v. Union of India [(1992) 3 SCC 178], wherein it was held that though in the manner of recording a statement under Section 40 of the Foreign Exchange Regulation Act (FERA), there are no safeguards as in the case of recording a statement of an accused under Section 164 of the Criminal Procedure Code by a Magistrate, the statements obtained from persons under the provisions of FERA or the Customs Act, should not be tainted with any illegality and they must be free from any vice. The voluntary nature of any statements made either before the Customs Authorities or the officers of the Enforcement under the relevant provisions of the respective Act is a sine qua non to act on it for any purpose, and if the statement appears to have been obtained by any inducement, threat, coercion or by any improper means, that statement must be rejected. The learned counsel submits that the said mandate had not been c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....08) 16 SCC 537] wherein it was held that, the proceedings under the Foreign Exchange Regulation Act, 1973 is quasi criminal in nature and that it is trite law that evidence brought on record by way of confession, which stood retracted, must be substantially corroborated by other independent and cogent evidence, which would lend adequate assurance to the court that it may seek to rely thereupon. 7. Per contra, the learned counsel for the 1st respondent submits that the appeals are devoid of merit and are only to be dismissed. He places reliance on the dictum laid down in C. Yahutty v. Director of Enforcement and others [2023 SCC Online Ker. 1255] to contend that an allegation as grave as inducement, threat, or promise to extract a confession to constitute the vice under Section 24 cannot be found on surmises and conjectures. The very fact that the person concerned had appeared on summons was held to be sufficient to hold that he was not under any custody to invite the wrath of Section 26 of the Evidence Act. Reliance is also placed on the dictum laid down in Rohit Tandon v. Directorate of Enforcement [(2018) 11 SCC 46], and it is contended that white collar crimes/economic offenc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ials and human beings to the enforcement authorities without a sanction from the jurisdictional magistrate. Indeed, this court had in Dharmaraj Bhosale (supra), referring to Section 102 of the Code of Criminal Procedure, 1973, held that the police cannot decide that the seized articles have to be handed over to the Enforcement authorities, and they have to comply with the mandates of Section 102 in the said respect. Any contravention has been termed an action that undermines accountability. There cannot be a quarrel with the proposition so laid down. However, in the appeal at hand, what is to be considered is the impact of such non-compliance by the Police/Excise authorities on the steps initiated by the Enforcement authorities as envisaged under FEMA. It is to be noted that as per Section 36 of FEMA the officer of the Directorate of Enforcement may exercise the powers and discharge the duties conferred or imposed upon him under the Act and Section 37 relating to power of search, seizure etc., specifically empower the Director of Enforcement and other officers not below the rank of an assistant director to take up an investigation, the contravention referred to in Section 13. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f law framed in the said respect has to be answered against the appellants. 11. As to the contention that the Tribunal had overlooked the dictum laid down by the Hon'ble Supreme Court regarding statements that are later retracted, I note that the said contention is not sustainable. I note that the evidentiary worth of retracted statements as had been laid down by the Hon'ble Supreme Court in Vinod Solanki (supra), K.T.M.S. Mohd. (supra) had been specifically referred to, and the dictum therein had been adhered/followed by the Tribunal while rendering the impugned Orders. It is trite, as had been laid down by this Court in C. Yahutty (supra), that even a retracted confession can be relied upon for conviction, though practice and prudence require a court to seek corroboration of other evidence adduced by the prosecution. The core of all the decisions of the Supreme Court on the point has been to the effect that once the voluntary nature of any statement made under the relevant provisions of the respective Acts is established, the statement can be relied on. Once the Court is satisfied that it is voluntary and true, a finding of breach can be sustained. It is for the maker of the s....