TaxTMI 
TaxTMI 
2020 (2) TMI 1734
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....ced the penalty that was imposed on the appellant by an order dated 17.02.2014 passed by the Deputy Director of Enforcement (hereafter the 'Adjudicating Authority'). By that order, the Adjudicating Authority had imposed a penalty of Rs. 75,00,000/- on the appellant and directed confiscation of the amount of Rs. 7,95,000/- seized from his office, under Section 63 of FERA. 3. Briefly stated, the relevant facts necessary to address the controversy arising in this appeal, are as under: 3.1 On 21.03.1995, a search was conducted at the residence of one Sh. Satish Kumar Sharma @ Pappu, at 3959, Gali Ahiran Pahadi Dhiraj, New Delhi. An aggregate amount of Rs. 8,25,000/- and various documents were seized. It is alleged that the said documents disclosed distribution of certain Hawala payments. It is stated that the statement of Sh. Satish Kumar Sharma @ Pappu to the effect that he was engaged in the business of receipt and distribution of payments in India under the instructions of one Munna Bhai of Dubai, was recorded. He stated that certain payments that were disclosed in the documents seized from his residence were made under instructions from Dubai. According to the Enforcement Directo....
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....n contravention of Section 9(1)(b) of FERA. The appellant was also called upon to show cause as to why a sum of Rs. 7,95,000/- be not confiscated under Section 63 of FERA. 3.7 It appears from the record that the said show cause notice was challenged by way of a writ petition before this Court. The fate of the writ petition is not mentioned. However, it is assumed that the said petition was dismissed. 3.8 The appellant responded to the said show cause notice and filed his written submissions. He, inter alia, contended that the said amount seized was entirely in Indian currency and was duly reflected in the books of account of M/s Anukampa Tours and Travels. He emphasized that M/s Anukampa Tours and Travels did not have any dealings in foreign currency or with any foreigner or any person resident abroad. And, its business was entirely confined to domestic business activities. It was also pointed out that Sh. Ashish Jain had retracted his statement as the same had been recorded forcibly and under coercion. 3.9 On 17.02.2014, the Adjudicating Authority passed an order holding that it would be reasonable to infer that the appellant received funds from different persons in India on in....
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....3.12 The Appellate Authority [Special Director (Appeals)] noted down the contentions advanced by the appellant; however, returned no finding in that regard. In conclusion, the Appellate Authority reduced the penalty to Rs. 7.95 lacs and directed that the same be adjusted against the amount seized. 3.13 Aggrieved by the said order dated 24.09.2014 (the Appellate Order), the appellant preferred an appeal before the Tribunal. 3.14 The Tribunal noted the facts and held that the Adjudicating Authority had observed that the statement of Sh. Ashish Jain had no evidentiary value and therefore, had imposed a penalty on the appellant without taking into account that said statement made by Ashish Jain on 04.10.1995. 3.15 Despite the aforesaid observations, the Tribunal rejected the appellant's appeal by an order dated 28.02.2016 (which is impugned herein). 4. I have heard the learned counsel for the parties. 5. The questions that arise for consideration in this appeal are: (i) Whether it is established that the appellant can be held guilty of violation of provisions of FERA solely on the basis of the statement of Ashish Jain recorded on 4.10.1995? (ii) If the answer to the above ques....
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....eived such payment otherwise than through an authorised dealer;" 11. In order to establish the commission of an offence under Section 9(1)(b) of FERA, it would be necessary to establish that the appellant had received payments by order or on behalf of any person resident outside India and through any person without corresponding inward remittance. In the present case, there is no such evidence or material whatsoever that indicates that the appellant had received any amount by order or on behalf of any person resident outside India. No such evidence or material has been placed on record. The original order dated 17.02.2014 passed by the Adjudicating Authority does not even mention the name of the persons from whom the appellant is alleged to have received any funds. 12. The prosecution's case is that the appellant had received certain funds from Sh. Satish Kumar Sharma @ Pappu who, in turn, had received certain funds and had distributed the same at the instance of one Munna Bhai from Dubai. In order to establish this offence, it would be necessary for the Enforcement Directorate to have produced material to the effect that Sh. Satish Kumar Sharma @ Pappu had made payments to the a....
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..... Sh Ashish Jain was also not produced in any of the proceedings in order for the appellant to cross examine him. Thus, this Court is of the view that even if the statement had not been retracted, it would have been of little value. However, in fact, Ashish Jain had retracted his statement on the very next day. It is now well settled that confessions and statements, which have been retracted, have little value unless they are corroborated by other material. 17. In Vinod Solanki v. Union of India and Anr.: (2008) 16 SCC 537, the Supreme Court held as under: "23. It is a 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. We are not oblivious of some decisions of this Court wherein reliance has been placed for supporting such contention but we must also notice that in some of the cases retracted confession has been used as a piece of corroborative evidence and not as the evidence on the basis whereof alone a judgment of conviction and sentence has been recorded. (See: Pon Adithan v. Narcot....
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....t case, neither the Adjudicating Authority (Deputy Director, Enforcement Directorate) nor the appellate authority (Special Director, Appeals) had applied their minds on the question whether the statement made by Ashish Jain was voluntary in view of its retraction on the very next day. In fact, the Tribunal had proceeded on the basis that it was accepted by the Appellate Authority (Special Director, Appeals) that the statement of Ashish Jain had no evidentiary value. 20. This Court is of the view that the statement of Sh. Ashish Jain could not be relied upon as, first of all, it was retracted on the very next day. And, secondly, the statement was very vague and bereft of any particulars, inasmuch as, it did not name or describe any person from whom funds had been received and whom the said funds had been distributed to. As noticed above, neither the adjudicating authority nor any of the appellate authorities, including the Tribunal, had applied their minds as to whether the said statement was voluntary or not. Thus, the question whether the appellant could be held guilty for violation of provisions of Section 9(1)(b) of FERA, on the sole basis of the statement of Sh. Ashish Jain, m....