Customs penalty fails where untested statements and lack of corroboration cannot sustain liability under Section 112A.

Penalty under Section 112A of the Customs Act was held unsustainable where no bill of entry was shown to have been filed, the appellant had not admitted knowledge of the import, and the statement relied on by the department did not directly implicate him. The statement was not tested by cross-examination as required by Section 138B, so it could not be treated as admissible and reliable evidence for fastening penalty. In the absence of corroborative material, the department failed to establish a basis for penal action, and the penalty was set aside.

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Issues: Whether the penalty imposed under Section 112A of the Customs Act, 1962 was sustainable when no bill of entry was filed, no inculpatory statement of the appellant existed, and the statement relied upon was not permitted to be tested by cross-examination in terms of Section 138B of the Customs Act, 1962.

Analysis: The material on record showed that the appellant was not shown to have filed any bill of entry and had not admitted knowledge of the impugned import. The statement relied upon by the department did not directly implicate the appellant, and the person whose statement was used against him was not offered for cross-examination. In such circumstances, the statement could not be treated as admissible and reliable for fastening penalty, particularly when the procedural safeguards under Section 138B were not followed. The absence of corroborative evidence further weakened the department's case.

Conclusion: The penalty under Section 112A was not sustainable and was set aside.

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