Customs penalty requires reliable evidence of active participation; mere presence and uncorroborated statements were insufficient here.

Penalty under section 114(i) of the Customs Act, 1962 could not be sustained where liability was based mainly on statements recorded under section 108 without adequate procedural safeguards and without corroboration of the appellant's role. The record showed that the appellant had not booked the consignment, prepared the export documents, procured the goods, or handled them, and his name did not appear in the co-accused's statement. Mere presence at the premises was held insufficient to fasten penalty, especially since the attempted export was intercepted before completion. Relief was therefore granted.

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Issues: Whether penalty under section 114(i) of the Customs Act, 1962 was sustainable against the appellant on the basis of statements recorded under section 108 of the Customs Act, 1962 and the alleged role attributed to him in the attempted export of prohibited goods.

Analysis: The appeal turned on the evidentiary worth of the statements relied upon by the adjudicating authority and the actual role of the appellant in the attempted export. The record showed that the appellant had not booked the consignment, had not prepared the export documents, and was not shown to have procured or handled the goods. The finding of liability rested substantially on statements recorded under section 108, but the name of the appellant did not appear in the co-accused's statement, and the adjudicating authority had relied on such material without the procedural safeguards required before treating it as admissible evidence. The decision also noted that mere presence at the premises, without more, was insufficient to fasten penalty, particularly when the export itself never materialised and the attempted export was intercepted by customs officers.

Conclusion: The penalty under section 114(i) of the Customs Act, 1962 was not sustainable, and the appellant was entitled to relief.

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