Shri A.L. Jalaludeen @ Chellavappa Vs. the Deputy Director - Court Judgment

Prabha Sridevan, J.

1. This appeal was admitted on the following substantial questions of law:

1. Whether the Tribunal failed to consider the violation of principles of natural justice in not granting an opportunity to the appellant for cross-examination of the witnesses and that the findings and orders are based on inadmissible and flimsy evidence?

2. Whether the Tribunal ignored the subjective satisfaction regarding the voluntary nature of statements, when the statement of the appellant was retracted at the earliest point of time and the appellant reported to the Magistrate about slapping by the Enforcement Officials, as held by the Supreme Court in KTMS Mohamed's case reported in 1992(3) SCC 178?

3. Whether the Tribunal failed to consider the absolute confiscation of Indian currency is not sustainable in law on mere presumptions in respect of the order of confiscation and the finding of contravention?

4. Whether the order passed by the Tribunal is invalid/non-est in law in view of the violation of Section 52(6) of the FERA 1973 r/w Section 20(2)(b) of the FERA 1999?

2. The learned Counsel for the appellant did not advance any submission on question No. 4. Therefore, we will deal only with question Nos. 1 to 3. The facts of the matter are as follows:

3. On information, the residential premises of the appellant was searched on 10.9.1990. Consequent to the search, Indian Currency, totalling to Rs. 3,61,000/- and certain documents were seized. The appellant gave statements before the Enforcement Officer, Madras on 10.9.90, 11.9.90 and 9.11.90. He admitted that he received Rs. 30,00,000/- and has made payment to the extent of Rs. 26,22,000/- during the period June to September 1990 as instructed by one Abdul Rahem of Alkobar. After deducting what was his commission the balance was the sum of Rs. 3,61,000/-. The Department followed up action pursuant to the details gathered from the documents and they recorded statements from one Smt. Mariam Beevi, W/o Shri Sultan, residing at No. 26, First floor, Portugese Church Street, Madras-600 001, where she had stated that her husband was a tailor for the last two years in Dammom, Saudi Arabia and he used to send Rs. 1000/- by means of draft once in three or four months from Dammam. She also stated that her husband talked to her over phone and said that he would send Rs. 5000/- from Dammam for his friend Amanulla and accordingly, in the last week of August, an unknown person came to her house, enquired her name and gave Rs. 5000/- and she received Rs. 5000/- and later gave it to Amanulla. The person who gave the said amount was about 24 years old, fair in complexion, fat and having beard and he was wearing pant and shirt. She had signed on the cover for the acknowledgement of receipt of Rs. 5000/- and she had written on the cover the words '5 Gown received'.

4. They also recorded the statement of one Ramraj, S/o Nagaraja Naidu, residing at No. 28, Poniya Sircarpalt, Rajapalayam on 5.10.90. He had stated that his son Rajendran sent a letter dated 19.8.90 from Al Jubail, Saudi Arabia stating that he sent Rs. 12,000/- and accordingly in the month of August an unknown person came to his house, enquired his name and gave Rs. 12,000/- and asked him to receive and also told that the money was given, as per the instructions of his son. The name and address and the cover containing the name and address of Smt.Mariam Beevi, was referred to as Sheet No. 17 and the name and address of the cover containing the name and addresses of Ramraj was referred to as Sheet No. 15.

5. A show cause notice was given on 4.9.1991 for contravention of Section 9(1)(b) and (d) of Foreign Exchange Regulation Act, 1973 (hereinafter referred to as FERA). Reply was given by the appellant on 17.12.1991 stating that Rs. 3,61,000/- was not connected with any violation of FERA and that he was doing plastic business and he had sold his wife's jewels and the gift money given to his wife at the time of marriage and with this amount he wanted to purchase a flat. According to him, the statements recorded from him had been retracted by him in the letters dated 13.9.90, 9.11.90 and 14.1.1991 and they were not voluntary. He was threatened and he wrote down the statement as per the dictation of the officers. He denied all the allegations specifically and he also contended that the figure alleged to have been distributed did not tally with the amount alleged to have been received. Therefore, the appellant requested that he be permitted to cross examine the two persons viz., Smt.Mariam Beevi and Ramraj, who allegedly had given the statements to the authorities.

6. The appellant was remanded to judicial custody on 11.9.90. During the adjudication proceedings, Smt.Mariam Beevi and Ramraj were not produced for cross examination. The appellant contended that this was a gross violation of principles of natural justice. He also contended that his retraction statements cannot be relied on; no conviction can be given on the retraction statements. Smt.Mariam Beevi and Ramraj had not identified the person who gave them the money . No details were given as to when and how he received the sum of Rs. 30 lakhs and the allegation made against him that he received several instalments ranging from Rs. 50,000/- to Rs. 1,00,000/- are baseless and there are no names of persons who came and delivered the money to him and there is nothing to indicate that those persons had informed him that they were handing over the money under instructions from a non-resident. Therefore, he denied that he violated the provisions of 9(1)(b) and (d) of the Foreign Exchange Regulation Act (FERA).

7. The Special Directorate, after going through the facts and circumstances held that the formal cross examination was not necessary in this case and that the retraction is merely a bald assertion whereas the statement of the appellant ran into 13 pages and was recorded in the language known to him and the aforesaid statement of the appellant was written by him in his own hand contained the details, which could not have been invented by and which could not have been written down as a result of tutoring or dictation. Therefore, the Officer was satisfied that the retractions were made to wriggle out of the situation in which the appellant was placed and the retraction would not take away the acceptability of such statement. The officer referred to the sheets which related to Smt.Mariam Beevi and Ramraj and he found that the charges were substantiated by documentary and oral evidence and the Indian currency was liable to be confiscated and fine of Rs. 1,50,000/- was imposed for contravention of Section 9(1)(b) of FERA, 1973 and a sum of Rs. 3,61,000/- was also ordered to be confiscated. Aggrieved by the said order, the appellant moved the appellate Board.

8. The Board considered in detail whether the findings of the order called for any interference. It held that there is no illegality or infirmity in placing reliance on the materials by the adjudicating officer and that there was absolutely no reason to believe that the appellant was kept in prolonged illegal custody by the officials and that the records also revealed that there was no denial of reasonable opportunity for the appellant to produce evidence in support of his plea. Therefore, the order of confiscation proceedings were confirmed and the penalty was reduced to Rs. 30,000/- each for violation of Section 9(1)(b) and (d) total penalty of Rs. 60,000/-. Against this, the appeal has been filed.

9. The learned Counsel for the appellant submitted that this is a case where the appellant had clearly retracted the statement. He submitted that inspite of the appellant's specific request for cross examination, opportunity was not given. The learned Counsel relied on : 2002(143)ELT21(SC) (Lakshman Exports Ltd v. Collector of Central Excise), where the Supreme Court held as follows:.We find that, in the reply to the show cause notice, the assessee had specifically asked to be allowed to cross-examine the representatives of these two concerns to establish that the goods in question had been accounted for in their books of account and the appropriate amount of Central excise duty had been paid....

He also relied on : 1992(58)ELT200(Bom) (Sadiq Ftehally v. Union of India), wherein the Bombay High Court held that when the Collector had asked the Professor of IIT to remain present for cross-examination, Collector was informed by the IIT, Bombay that the Professor of IIT, Bombay will not be available for cross-examination and in that case, the Supreme Court held that the Collector ought to have resorted to Section 108 of Customs Act, 1962 and call upon to summon the professor, whose attendance is necessary.

10. The learned Counsel for the appellant submitted that the worded statements cannot be relied on since neither Mariam Beevi nor Ramaraju knew the names of the persons, who had allegedly given them the money. He submitted that, therefore no violation of the provisions of 9(1)(b) and (d) of the Foreign Exchange Regulation Act (FERA) was made out.

11. The next ground on which he attacked the impugned order is with regard to retraction. The learned Counsel submitted that when the appellant had clearly stated before the Magistrate, that he had been slapped it would show that it was only under the threat, the statement was recorded. He relied on : 1993ECR239(Gujarat) (Union of India v. AbdulKadar Abdulgani Hasmani), wherein the High Court of Gujrat held that confessional statements of the accused recorded after some delay and while they were in the custody of Customs Officer, inference drawn by Court that the statements may not be voluntary. He also relied on (A.N. Bhat v. Collector of Customs), wherein it is held that the statements recorded from the appellant late in night or in early hours of the morning to be considered as involuntary and not to be relied upon especially when retracted.

12. The learned Counsel also relied on (K.L. Pavunni v. Collector of Customs and Central Excise, Cochin) wherein, the Tribunal held that the appellant had been detained from 6.12.1980 to about 7.12.1980 and no statement recorded till 9.30 a.m though the appellant is willing to make a statement at any time. Inculputory statement held not to be voluntary and acceptable. The learned Counsel submitte that this would violate Article 21 of the Constitution of India. He also submitted that there is nothing to connect the sum of recovery of Rs. 3,61,000/- with any one, who is residing abroad and the presumption should be of innocence and this is a basic human right and he referred to : 2009(233)ELT157(SC) (Vinod Solanki v. Union of India) wherein, the Supreme Court held that presumption of innocence is a human right though it may not be treated as a fundamental right under Article 21 of Constitution of India.

13. The learned Counsel for the appellant read out the retraction statement made on 13.9.90, wherein it was stated that it was recorded from the appellant under threat and coercion and the same was not binding upon him. It is also stated in the statement that the appellant complained the same before the learned Magistrate when he was remanded on 11.9.90 and he was released on 12.9.90 at 8.00 p.m. This retraction was rejected by the Enforcement Directorate on 26.9.1990. In response to summons that he should appear on 12.11.90, he appeared at the Enforcement Directorate on 7.11.90 and confirmed the statement made on 10.9.90 and 11.9.90. This was again retracted on 9.11.90. The learned Counsel submits that the decisions cited by him fully applies to his case and without threat this statement would not have been given.

14. The next ground raised is that mere confiscation of Indian Currency cannot sustain the conviction. The learned Counsel submits that there was nothing to show that it is only by an act contravening the provisions of FERA cash was in his possession and the presumption should be of innocence and even if there was contravention assumed without admitting the same, contravention would be reduced to Rs. 33,000/- which is the amount that they had been able to correlate with the statement of Smt. Mariam Beevi and not the amount of Rs. 3,61,000/-. For this, the learned Counsel relied on CFC (Mad) 152 (Union of India v. Marcel Nenenus) , wherein the Division Bench of this Court held that speculations should be avoided, particularly when orders of confiscation and imposition of penalty are to be made and the degree of proof that is required for the penalty to be imposed is that which is required in a criminal case. The learned Counsel also relied on : [1963]2SCR297 (Shanti Prasad v. Director of Enforcement), wherein the Supreme Court held that proceedings under Act are quasi-criminal in nature and the prosecutor has to establish beyond all reasonable doubt that there has been a violation of the law.

15. He also relied on : 2009(233)ELT157(SC) (Vinod Solanki v. Union of India) wherein the Supreme Court had held that Court must bear in mind the attending circumstances, time of retraction, nature and manner of retraction and other relevant factors to arrive at a finding on voluntary nature of statement or otherwise of a confession which has been retracted. It also held that the Act placed the burden of proof upon an accused or a proceedee 'only when the foreign exchange acquired has been used for the purpose for which permission to acquire it was granted and not for mere possession thereof. The Parliament, therefore, advisedly did not make any provision placing the burden of proof on the accused/proceedee'.

16. The learned Special Counsel for Enforcement Directorate submitted that the Department had fully established the case. He read out the portions of the confessional statements and submitted that the facts contained in the statements dated 10.9.90 and 11.9.90 such as they must have been exclusively within the knowledge of the appellant and neither threat nor coercion was exerted for recording the statements and the flow of the narration is natural and there is nothing in the confessional statements to indicate that it has been made against the appellant's will and it is in his own handwriting in Tamil. He also submitted that the first retraction statement was made on 13.9.90, where he stated that the statement was recorded from him under threat and coercion. Subsequently, he again affirmed on 9.11.90 stating that whatever he stated in the statements on 10.9.90 and 11.9.90 are true. Then he again retracted his statement. This is clearly an after thought. The learned Special Counsel for Enforcement Directorate submitted that in Solanki's case Supreme Court had held that one must see whether retraction is bonafide and if it is not bonafide, then the confessional statement has to be accepted.

17. As regards denial of opportunity to cross examine Smt.Mariam Beevi and Ramraj the learned special Counsel for the Enforcement Directorate submitted that they have clearly stated that they did not know the names of those who came and gave money to them. These statements are also natural. Smt.Mariam Beevi had stated that she received the money as per the instructions of her husband Sulthan during the last week of August. This would not clearly amount of denial of natural justice.

18. He also produced the xerox copies of all the documents seized under the Mahazar and pointed out the various named found in the document., bus ticket, amounts indicated as against the names. Against Ramaraju the number 12 is written, which meant that Rs. 12,000/- should be given to Ramaraju. As against Smt.Mariam Beevi it was 5 and it was written on the cover '5 Gown received'. Further there is a reference to a local residence from where the appellant has made calls and the number is 846160. This was mentioned in the confessional statements and this too indicated that it a natural and voluntary statement. For all these reasons, he submitted the impugned order deserves to be confirmed.

19. Now we will look at the materials before evaluating the legal submission. The appellant, in reply to the show cause notice, stated that he is doing plastic business at Madras and that the statement was recorded from him on 10.9.90 and 11.9.90 and that he had retracted the same by the letter dated 13.9.90. During the course of personal hearing before the adjudicating authority he had stated that as far as the seized amount of Rs. 3,61,000/- is concerned there is no evidence to show that it was received on behalf of a non-resident and hence the amount cannot be confiscated and no investigation had been made to find out whether one Sri Abdul Rahim was in Al Kobar and whether the amount was received on his behalf or under his instructions. The amount seized was Indian currency and the alleged amounts which were paid were also in Indian currency. He also stated that he was under judicial custody on 11.9.90 and was produced before the Magistrate when he had stated that he was slapped. It was his case that the alleged confessional statements were obtained by force. In his confessional statement he had stated that he received Rs. 30 lakhs from different persons in several instalments. Certain persons who gave these amounts had come to his house and had delivered the amounts and certain other persons gave the Indian rupees to him at the places mentioned by them. He had met some persons near Spencers building in Mount Road, Madras at the entrance of Bapalal Jewellers, Radhakrishnan Road and near Chozha hotel and received the amounts. Then the appellant had denied all that the facts mentioned above were not true. He also denied that he had given money to Smt.Mariam Beevi as per the instructions of her husband Sulthan.

20. If we look at his statement given on 10.9.90, we see that he had referred to his family members given, the name of his elder brother Kabeer who was residing in Nagore along with his wife and two children, his second elder brother is residing in Nagore along with his wife and two younger brothers Aliyar and Yousuf who were unemployed and staying in Nagore and his third sister Fathima is residing in Nagore along with her husband and one child and that the wife of the appellant and his mother were residing in Nagore. He had stated that the two elder sisters and one younger sister were married and staying separately with their family in Nagore. He had also stated that he owned no house or land in his name and that he had married in February 1990 and he had a Savings Account No. 7328. He has an uncle by name C.S. Tajudeen, whose telephone number was 846160. He also stated that he knew Abdul Raheem, who had been working as a Supervisor for the last four years in Gulf Catering, Alkobar and staying there. The appellant told the said Abdul Raheem about his family problems and his sufferings due to insufficient income and asked him to give him a job. For this, Abdul Raheem told him that he was receiving Saudi Riyals from persons working in Alkobar and disbursing Indian rupees to persons in India and that he needed a reliable person to do that job in Madras. The appellant has stated that he had received Rs. 30 lakhs from different persons and in several instalments. Certain persons gave these amounts at his house , others had given the amount to him at the places mentioned by them. He had met some persons near Spencers building in Mount Road, Madras the entrance of Bapalal Jewellers, Radhakrishnan Road and near Chozha hotel and received the amounts. Out of 30 lakhs, he received Rs. 8.5 lakhs as per the instructions of Abdul Rahim. The previous night Abdul Rahim had contacted the appellant from Alkobar over telephone and told him that he had sent Rs. 3.5 lakhs in his name and the person who had already given Rs. 5 lakhs to the appellant as per the instructions, would meet him at the place where he had met already and will gave Rs. 3.5 lakhs. He was standing at the entrance of Bapalal Jewellery where he had received Rs. 5 lakhs from a person and the said person met the appellant and had given him Rs. 3.5 lakhs stating that the amount was being given to the appellant as per the instruction from Saudi Arabia and since the said Abdul Rahim already told about this, the appellant received Rs. 3,50,000/- and kept in his table drawer and the same was seized by the Deptarment. Out of Rs. 30 lakhs, the appellant disbursed Rs. 26,22,000/- to the persons in Madras, Nagercoil, Tirunelveli, Tanjore, Pudukottai, Madurai, Trichy as instructed by Abdul Rahim and the appellant had taken Rs. 17,000/- as commission. Two names and addresses are mentioned viz.,

1. Shri Abdul Kader, 11 or 10 Mosque street, Kottur, Nagercoil

2. Smt.Gracy Nithiravillai, Nagercoil.

21. In the Sheets 13, 15,16 and 17 he had stated that he has disbursed Indian Rupees as per the instructions of Abdul Rahim residing in Alkobar to the persons mentioned in these sheets. He gave Rs. 6,000/- to Aram Hajiar, mentioned in 13, in July, as per the instructions of Abdul Rahim and Rs. 12,000/-, Rs. 10,000/- and Rs. 5,000/- to Ramraj, Arokiam and Mariam Beevi respectively.

22. The appellant was produced before the Magistrate on 11.9.90 at 4.45p.m and the Magistrate has recorded as follows:

Accused produced at 4.45 p.m on 11.9.90. Complains of slapping by Enforcement Directorate official. No visible injuries. Hence he is not sent to hospital.

He was released from custody on 12.9.90 at 8.00 p.m. On 9.11.90 he appeared before the Enforcement Directorate and stated that he had received the summons that he should appear on 12.11.90. But since he received news from Nagore about his wife's ill-health he would not be able to appear on 12.11.90 and therefore, he had come to the Directorate on 9.11.90. On 9.11.90 he again affirmed that the statements made on 10.9.90 and 11.9.90 were true. On the same date i.e., on 9.11.90 he again made a retraction. Subsequently, on 14.1.91 he had written that the Director had not given any time or right to enquire the concerned Enforcement Officer and therefore the statements were not binding upon him.

23. So the first confessional statements dated 10.9.90 and 11.9.90 were retracted. After 12.9.90 he was free. It is clear from the retraction letter dated 9.11.90, he was not under judicial custody. He had received the summons asking him to appear on 12.11.90 but due to his wife's ill health, he had voluntarily gone on 9.11.90 to the Directorate and explained the position. At that time, he affirmed his statements dated 10.9.90 and 11.9.90. Then he must have come out from the Directorate Office soon thereafter to make the 9.11.90 retraction. Therefore, he must have been in the office from 10.00 a.m onwards at the most for a few hours. It is during this period he had given the statement affirming the statements dated 10.9.90 and 11.9.90. Therefore, this statement made on 9.11.90 would not have been given under threat or coercion.

24. He came to the office voluntarily to inform the authorities that he could not be present on 12.11.90. It is difficult for us to believe that in the few hours that he was present, he was under such threat or coercion as to give a statement affirming the statement given on 10.9.90 and 11.9.90. The officer could not have known that the appellant would be present at their office on 9.11.90 because they could not have known that his wife was ill and he had to go to Nagore. Therefore, the retraction dated 9.11.90 has been made only to dilute the effect of affirmation of the same date. We do not believe the 9.11.90 retraction, The translated statements are as below:

Free English Translation

Statement of Shri A.L. Jalaludeen, S/o Abdul Latheef, residing at No. 39, first floor, Valaja Road, madras-5, given before the Enforcement Officer, Enforcement Directorate, Madras today on 9.11.90.

I have appeared before you in response to the summons given by you to me. As per the summons I should appear before you on 12.11.90. Since I received a news yesterday, from Nagore about my wife's ill-health, and I will not be able to appear before you on 12.11.90, I have appeared before you today. I will be leaving for Nagore today to see my wife. Today you read Section 40 of Foreign Exchange Regulation Act, 1973 to me and explained in Tamil. I understood that according to this, except the truth, I should not any other thing and if I tell lie I will be punished for the same. Whatever I stated in the statements dt.10.9.90 and 11.9.90 given before you are true. I have vacated the house at No. 5, Ist lane, Maohamed Abdulla Sahib Street, Chepauk, Madras and hve been presently residing at the said address in Walaja Road from 7.11.90.

Recorded before me with the assistance of N. Gopal, AEO

Sd.

A.L. Jalaludeen

9.11.90

Sd.

E.O. Madras

9.11.90

Free English Translation

From

A.L. Jalaludeen

39, Walajah Road

I floor, Madras-5

To

The Additional Director of Enforcement

Enforcement Directorate

shastri Bhavan

26, Haddows Road, Madras-6

Ref:No.T.3/384/32/CITY-10-90

Sir,

I have received summons from your office yesterday (8.11.90) requiring me to appear on 12.11.90. As I received message from Nagore stating that my wife is not well, I came to your office on 9.11.90 at 10.00 hours and explained my position. I have also furnished my hew house address. At that time, I have been threatened, forced to write a stt., stating that the statements given by me on 10.9.90 and 11.9.90 were true by the officers. Regarding this, I have already sent a letter on 13.9.90 stating that the stts. Recorded from me on 10.9.90 and 11.9.90 were not voluntary one and the same was written under threat and coercion. The stt. Recorded today i.e., on 9.11.90 stating that the stts given by me as truely was not binding on me. Regarding this matter, I have received your letter dated 26.9.90 only yesterday i.e., on 8.11.90. In your aforesaid letter, it has been stated that the stts. Given by me on 10.9.90 and 11.9.90 were voluntarily written by me and the same were written without any force or threat and that was not correct one and I can't accept it.

Sd/-

A.L. Jalaluddin

9-11-90.

It is clear that the appellant is under the impression that by merely making a retraction he will be let off the hook.

25. If we believe the affirmed statement made by the appellant dated 9.11.90 then the confessional statement must be accepted. Further the statements made on 10.9.90 and 11.9.90 do not appear to be statements made under coercion. We are placing our conclusion not only because the statement contains many details but also the manner in which he has written the confession viz., the flow of narration of events starting from his family members till the end rings true. He had said that out of the remaining money, he took Rs. 17,000/- as commission. Therefore, we hold that the statements recorded on 10.9.90 and 11.9.90 were voluntary and made by the appellant on his own.

26. As submitted by the learned Special Counsel for Directorate, Smt. S. Mariam Beevi has stated that the person who gave the amount was about 24 years old, fair in complexion, fat and having beard and wearing pant and shirt and the cover containing her address which was recovered as Sheet No. 17. Similarly Ramraj has also stated that his son Rajendran sent a letter dated 19.8.90 from Al Jubail, Saudi Arabia stating that he sent Rs. 12,000/- and accordingly in the month of August an unknown person came to his house, enquired his name and gave Rs. 12,000/- and asked him to receive and also told that the money was given, as per the instructions of his son. The cover containing the name and address of Ramraj was referred to Sheet No. 15. Their statements tally with the details given by the appellant in his statements.

27. Therefore, the case does not rest on the statement of the appellant alone, but it receives strength from the statement recorded from Smt. Mariam Beevi and Ramraj and we do not see the denial of opportunity to cross examine these two persons had in any way resulted in violation of principles of natural justice. The two cases referred to by the learned Counsel for the appellant can be distinguished on facts.

28. In : 2002(143)ELT21(SC) (Lakshman Exports Ltd v. Collector of Central Excise), there was a difference of opinion between two Members of the Tribunal and the matter was referred to the President. The difference of opinion arose because of the findings of the Vice-President of the Tribunal that the principles of natural justice had not been observed and that the assessee had suffered thereby. The President, however, did not agree and he held that there had been no request by the assessee to cross-examine the representatives of the two concerns to show that the goods in question had been accounted for in their books of account and appropriate duty had been paid. They found that in the reply to the show cause notice, the assessee had specifically asked to be allowed to cross-examine the representatives of these two concerns to establish that the goods in question had been accounted for in their books of account and appropriate amount of Central excise duty had been paid. It was not contested that the matter should go back to the assessing authority for hearing the matter de novo after ensuring the lacunae pointed out in the order of the Vice-President are not. In the first place the documents were necessary for establishing the assessee's case and two, there appears to have been no contest in this regard. So we do not think this case helps the appellant.

29. In other judgment reported in : 1992(58)ELT200(Bom) (Sadiq Ftehally v. Union of India) when the Collector had asked the Professor of IIT to remain present for cross-examination, Collector was informed by the IIT, Bombay that the Professor of IIT, Bombay will not be available for cross-examination and in that case, the Supreme Court held that the Collector ought to have resorted to Section 108 of Customs Act, 1962 and summoned the professor, whose attendance is necessary. This case also does not help the appellant.

30. Therefore, these two decisions do not support to the case of the appellant. Therefore, we do not agree that the principles of natural justice has been violated by not allowing the appellant to cross-examine these two persons. We may refer to the following paragraph in : 1983(13)ELT1486(SC) (Kanungo & Co. v. Collector, Customs, Calcutta)

Paragraph 12: We may first deal with the question of breach of natural justice. On the material on record, in our opinion, there has been no such breach. In the show cause notice issued on August 21, 1961, all the material on which the Customs Authorities have relied was set out and it was then for the appellant to give a suitable explanation. The complaint of the appellant now is that all the persons from whom enquiries were alleged to have been made by the authorities should have been produced to enable it to cross-examine them. In our opinion, the principles of natural justice do not require that in matters like this the persons who have given information should be examined in the presence of the appellant or should be allowed to be cross-examined by them on the statements made before the Customs Authorities. Accordingly we hold that there is no force in the third contention of the appellant.

Therefore, the ground of violation of principal of natural justice is rejected.

31. Now, we come to the possession of Indian Currency in the hand. In view of the statement made by the appellant, which have been accepted by us that the sum of Rs. 3,61,000/- is the balance after disbursing Rs. 26,22,000/-. Therefore, it is clear that this was contravention of Section 9(1)(b) and 9(1)(d) of Foreign Exchange Regulation Act (FERA).

32. We must refer to Solanki's case (cited supra) on which reliance was placed by the learned Counsel for the appellant. Actually that case helps the Department. It was contended that no reliance should be placed on the retracted confessional statement unless the same was corroborated substantially in material particulars by some independent evidence.

33. The Supreme Court held in that case as follows.

19. The Act is a special Act, which confers various powers upon the authorities prescribed therein. Even the salutory principles of mens rea and actus reu in a proceeding under the Act may not be held to be applicable. It is now a well settled principle the presumption of innocence as contained in Article 12(2) of the International Covenant on Civil and Political Rights is a human right although per se it may not be treated to be a fundamental right within the meaning of Article 21 of the Constitution of India.

20. Sub-section (2) of Section 71 places the burden of proof upon an accued or a proceedee only when the foreign exchange acquired has been used for the purpose for which permission to acquire it was granted and not for mere possession thereof. The Parliament, therefore, advisedly did not make any provision placing the burden of proof on the accused/proceedee...

24. It is interesting to note that both the learned Counsel have placed strong reliance upon a decision of this Court in KTMS Mohd and Anr v. Union of India : 1992CriLJ2781 . This Court therein made a distinction between the provisions of the FERA and the Income Tax Act, opining:

31. Leave apart, even if the officers of the Enforcement intend to take action against the deponent of a statement on the basis of his inculpatory statement which has been subsequently repudiated, the officer concerned must take both the statements together, give a finding about the nature of the repudiation and then act upon the earlier inculpatory one. If on the other hand, the officer concerned bisect the two statements and make use of the inculpatory statement alone conveniently by passing the other such a stand cannot be a legally permissible because admissibility, reliability and the evidentiary value of the statement of the inculpatory statement depend on the bench mark of the provisions of the Evidence Act and the general criminal law.

Holding in categorical terms that Section 24 of the Indian Evidence Act shall apply, it was held:

But suffice to say that the core of all the decisions of this Court is to the effect that the voluntary nature of any statement made either before the Custom Authorities or the officers of Enforcement under the relevant provisions of the respective Acts 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 brevimanu. At the same time, it is to be noted that merely because a statement is reacted, 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 volunatary 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 ruied that even in passing a detention order on the basis of an inculpatory statement of a detenu who has violated the provisions of the FERA or the Customs Act etc., the detaining authority should consider the subsequent retraction and record its opinion before accepting the inculpatory statement lest the order will be vitiated.

25. Submission of Mr. P.V. Shetty that appellant had special knowledge and that burden of proof would be on him in terms of Section 106 of the Indian Evidence Act, in situation of this nature, cannot be held to have any substance. The initial burden of prove that the confession was voluntary in nature would be on the Department. The special or peculiar knowledge of the person proceeded against would not relieve the prosecution or the Department altogether of the burden of producing some evidence in respect of that fact in issue. It may only alleviate that burden to discharge and very slight evidence may suffice.

31. In K.I Pavunny v. Assistant Collector (HO) Central Excise Collectorate, Cochin : 1997(90)ELT241(SC) a finding of fact was arrived at that the confession was voluntary in nature. Reliance therein for the purpose of arriving at the guilt of the accused was not only placed on the statement given under Section 108 of the Customs Act, 1962 but also on the deposition of evidence of Pws.2, 3 and 5...

34. A person accused of commission of an offence is not expected to prove to the hill that confession had been obtained from him by any inducement, threat or promise by a person in authority. The burden is on the prosecution to show that the confession is voluntary in nature and not obtained as an outcome of threat, etc., if the same is to be relied upon solely for the purpose of securing a statement or otherwise of a confession which has since been retracted, the Court must bear in mind the attending circumstances which would include the time of retraction, the nature thereof, the manner in which such retraction has been made and other relevant factors. Law does not say that the accused has to prove that retraction of confession made by him was because of threat, coercion etc., but the requirement is at it may appear to the court as such...

36. Appellant is said to have been arrested on 27.10.1994; he was produced before the learned Chief Metropolitan Magistrate on 28.10.1994. He retracted his confession and categorically stated the manner in which such confession and categorically stated the manner in which such confession was purported to have been obtained. According to him, he had no connection with any alleged import transactions, opening of bank accounts, or floating of company by name of M/s Sun Enterprises, export control, Bill of Entry and other documents or alleged remittances. He stated that confessions were not untrue but also involuntary.

34. In that case, the Tribunal on its independent examination of the factual matrix placed before it 'did not arrive at any finding that the confession being free from threat, inducement or force could not attract the provisions of Section 24 of the Indian Evidence Act'. However, the reasoning in the above judgement would indicate that if a confessional statement is retracted we should decide whether the retraction statement is genuine or not. Here we have given our reasons to confirm the Tribunal's finding that the retractions were not genuine and bald retraction and that the confessional statements are credible and voluntary.

35. In result, the questions raised by the appellant are purely questions of facts and not questions of law.

36. For all these reasons, we reject the appeal and the Civil Miscellaneous Appeal stands dismissed. No costs. Consequently, the connected MP is closed.