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2014 (3) TMI 719 - HC - FEMAIllicit sale and purchase of foreign exchange from and to unknown persons. - contravention of Sections 8(1) and Section 8(2) read with Section 64(2). - retraction of statement by the accused as having been given under the duress and coercion. - Held that:- for the statement by one noticee under Section 40 FERA to be used as evidence against another co-noticee it must be shown that the said statement inculpates the person making it. Otherwise such statement has no value whatsoever. The statement of Shri Parveen Kumar in the present case does not inculpate him at all. Even when he admits to making the entries in the diaries, he seems to wriggle out by explaining that he did it at the instance of Shri Rikabh Chand Jain. He also does not seem to have been aware of the implications of making of those writings. It is futile for the department in the present case to rely on the statement of Shri Parveen Kumar Mehta as substantive evidence to hold him and the co-noticee guilty of contravention of Sections 8 (1) and 8 (2) of the FERA. The proposition noted by the SD that corroborative evidence is needed “to make the retraction meaningful and worthy of credence” is also erroneous. In fact, since the said admissional statements were retracted even the admissible portion, if any, of the said statements would require corroboration by other independence evidence. This legal position was entirely missed by both the SD as well as the AT What is also striking in the present case is that while the Indian currency was recovered from the residence and dicky of the scooter, no foreign exchange was recovered. The mere fact that Indian currency was recovered does not establish the violation of the FERA by the Appellants. It had to be shown that the said money was related to illegal transactions falling within the ambit of FERA. For all the aforesaid reasons, the AO dated 30th August 1990 passed by the SD and the impugned order dated 15th June 2007 passed by the AT are hereby set aside. - Decided in favor of appellant.
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