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2016 (9) TMI 1352

Head Note:
Contravention of Section 3(d) r/w Section 42(1)(2) of FEMA, 1999 - search - payments in foreign exchange - Held that:- No foreign currency has been recovered. There is no corroboration evidence of the fact that the payments allegedly made by the appellants were made as per the instructions from abroad. There is no evidence available to establish that the payments so made were in consideration of foreign exchange so acquired by the appellant companies towards the differential amount of alleged under-invoicing of imports made by the above said two companies. The appellants are stated to be involved in import of MS Ingots/Scrap from abroad, therefore, for this they were supposed to make payments in foreign exchange. It has not been explained in the Adjudication Order as to what benefit did the appellant gain by under-invoicing and payment in Indian currency by the appellants at the behest of sellers abroad as has been alleged.

There are discrepancies, contradictions and vagueness apart from non-adherence to the principles of natural justice affecting the process of fair trial. The case laws relied upon by the ld. CA are on the value of retracted confession and it has been held by the Hon’ble Supreme Court in Vinod Solanki v. UOI [2008 (12) TMI 31 - SUPREME COURT] that the burden is on the prosecution to show that the confession is voluntary in nature and not obtained as the outcome of threat, etc. In Piyush Saxena v. Enforcement Directorate [2009 (12) TMI 514 - HIGH COURT OF DELHI] has held that once the retraction of a confessional statement takes place the burden to prove that the statement was voluntary is on the prosecution. While in Vinod Kumar Sahadev v. UOI [2009 (12) TMI 514 - HIGH COURT OF DELHI] held that once the alleged statement was retracted the allegations of force and duress the onus to prove that the statement was voluntary shifts to the Government. The statement of the two noticees lose their sanctity in view of the retraction on the very next day and which was illegally rejected by the Investigating Officer and the Adjudicating Authority without any discussion or consideration relied on the rejection by the Investigating Authority and did not examine the veracity of the statements. In view of the above discussions the impugned order is devoid of merits and cannot stand judicial scrutiny resultantly appeals are liable to be allowed and the impugned order is liable to be set aside.


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