2026-VIL-902-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Admissibility of statements under Section 108 of the Customs Act - Show cause notice imposing a penalty under section 112 of the Customs Act based solely on a statement made by the assessee under Section 108 of the Customs Act, recorded during the course of inquiry - Whether a statement made under section 108 of the Customs Act can be considered as relevant if the procedure contemplated under section 138B of the Customs Act has not been followed – HELD - The provisions of Section 108 of the Customs Act enable officers to summon any person whose attendance they consider necessary to give evidence in any inquiry, and the statements of persons so summoned are recorded under this provision. Section 138B of the Customs Act makes such statements relevant for proving the truth of facts contained therein only when the person who made the statement is examined as a witness before the adjudicating authority and the adjudicating authority forms an opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice - The use of the word "shall" in section 138B makes the procedure mandatory. The procedure is not merely directory but mandatory, and failure to comply with it means that no reliance can be placed on the statements recorded under section 108 of the Customs Act. The rigour of this provision cannot be done away with by the adjudicating authority, as without such examination and opinion, the statement does not constitute relevant and admissible evidence and has to be ignored. Therefore, since the procedure contemplated under Section 138B was not followed and the statement made by the assessee under Section 108 is the sole basis for imposition of penalty, the order imposing penalty is set aside - The impugned order is set aside and the appeal is allowed
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