J.B. Koshy, J.

On 16.10.1991, the appellant was intercepted by the officers of Special Customs, Preventive Unit, Calicut at Calicut Airport, when he arrived from Bombay by flight. On search of the baggage, Indian Currency of Rs.15,50,000/- and some incriminating documents were seized by the Customs Officers. On interrogation, the appellant stated that the amount of Rs.15,50,000/- was received by him at K.K. Hotel & Jamayat, Bombay as per the arrangement of his uncle’s son Abdul Salam in Sharjah and out of this amount, Rs.5,00,000/- was to be paid to one Abdullakutty of Everest Apartments. Tellicherry and Rs.10.5 lakhs to K.P. Musthafa, Sara Manxil, Payyangandi. Since the transaction attracted the provisions of Foreign Exchange Regulation Act, 1973 (FERA, 1973), the matter was transferred to Enforcement Directorate, Calicut for investigations under the Foreign Exchange Regulation Act, 1973. He was issued with summons to appear on 19.10.1991. The appellant was examined under section 40 of FERA, 1973 and his statements were recorded on 19.10.1991 and 21.10.1991 by the Enforcement Officer, Calicut. He was arrested on 21.10.1991 and produced before the Magistrate as can be seen from remand report. The incriminating documents seized from him included paper slips containing name, address and telephone number of Abdullakutty and K.P. Musthafa. After issuing show cause notice, case was finally adjudicated by Special Director of Enforcement. He found that the appellant had contravened the provisions of Sections 9(1)(b) & 9(1)(d) read with 64(2) of FERA, 1973. Sections 9(1)(b) & 9(1)(d) read as follows:

“9. Restrictions on payments.- (1) save as may be provided in and in accordance with any general or special exemption from the provisions of this sub-section which may be granted conditionally or unconditionally by the Reserve Bank, no person in, or resident in , India shall-

(a) xx xx xx

(b) receive, otherwise than through an authorized dealer, any payment by order or on behalf of any person resident outside India.

Explanation.- For the purposes of this clause, where any person in, or resident in, India receives any payment by order or on behalf of any person resident outside India through any other person (including an authorized dealer) without a corresponding inward remittance from any place outside India, then, such person shall be deemed to have received such payment otherwise than through an authorized dealer;

(c) xx xx xx

(d) make any payment to, or for the credit of, any person by order or on behalf of any person resident outside India;”

The currency seized from the appellant amounting to Rs.15,50,000/- was confiscated and he was imposed with a penalty of Rs.1,00,000/-. Appellate Authority, Foreign Exchange Regulation Appellate Board, upheld the findings, but, reduced penalty from Rs.1,00,000/- to Rs.50,000/-. This appeal is filed challenging the above order.

2. First contention is that statements were taken from persons namely Abdulla Kutty, K.P. Mustafa, B. Mohd. Hazi and C. Prabhakaran, but, they were not made available for cross examination. They did not state anything against the appellant. They only stated that they were expecting money from their relatives abroad. Copies of the statements were given. Therefore, non-examination of them did not cause any prejudice to the appellant. In this connection, we refer to the decision of the Apex Court in State of Mysore v. Shivabasappa Shivappa Makapur (AIR 963 SC 375).

3. Second contention is that the statements given by the appellant on 19.10.1991 and 21.10.1991 cannot be relied on. They are retracted admissions and those statements were made while he was under illegal custody. For that he relied on the bail order granted by this court in Crl.M.C.No,1335 of 1991. While granting bail on 8.11.1991, this court noted the contention of the appellant that recovery has already been effected and he was in custody from 16th October, 1991. But, that will not prove that he was detained f