Section 108 customs statements may serve as substantive evidence to support penalty and confiscation proceedings.

A statement recorded under Section 108 of the Customs Act was treated as substantive evidence in customs proceedings and could be relied on to link a person to the contravention. The statement was not governed by Section 161 of the CrPC, and where it specifically implicated the respondent and the respondent did not cooperate with summons or the investigation, dropping the penalty proceedings was unsustainable. The appeal succeeded and penalty under Section 112 was upheld.

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Issues: Whether a statement recorded under Section 108 of the Customs Act, 1962 could be relied upon as substantive evidence to connect the respondent with the contravention and justify penalty under Section 112 of the Customs Act, 1962.

Analysis: The respondent was named in the statement of an occupant of the intercepted vehicle, recorded under Section 108 of the Customs Act, 1962, in which the role of the parties in transporting heroin and related contraband was disclosed. The Court applied the principle that a statement made before customs is not governed by Section 161 of the Code of Criminal Procedure, 1973, and may be treated as material evidence in customs proceedings. Since the statement specifically implicated the respondent and the respondent did not participate in the investigation despite summons, the dropping of proceedings was found unsustainable.

Conclusion: The proceedings against the respondent could not be dropped and penalty was warranted; the challenge by the Revenue succeeded.

Final Conclusion: The order dropping the penalty proceedings was set aside and the appeal was allowed with imposition of penalty on the respondent.

Ratio Decidendi: A statement recorded under Section 108 of the Customs Act, 1962 is admissible as substantive evidence in customs proceedings and may be used to connect a person with the contravention for the purpose of confiscation or penalty.

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