Section 108 statements can sustain confiscation, but penalty requires mens rea; confiscation upheld, personal penalty deleted.

Statements recorded under Section 108, when not retracted or discredited, were treated as substantive evidence of foreign origin and unauthorised import, sustaining confiscation of the seized peas under Section 111(b) and the connected vehicles under Section 115(2); redemption on fine did not alter that result. However, penalty under Section 112(b) was not justified because the order did not record a clear finding of mens rea against the appellant. The confiscation and redemption-related reliefs were maintained, but the personal penalty was deleted.

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Issues: (i) Whether the confiscation of the seized peas and vehicles under the Customs Act was sustainable on the basis of the material collected during investigation and the statements recorded under Section 108. (ii) Whether penalty under Section 112(b) was justified against the appellant.

Issue (i): Whether the confiscation of the seized peas and vehicles under the Customs Act was sustainable on the basis of the material collected during investigation and the statements recorded under Section 108.

Analysis: The recovered peas were intercepted along with vehicles used for transport, and the appellant as well as the drivers had given statements under Section 108 admitting foreign origin, unlawful import from Nepal through unauthorized routes, and absence of supporting import documents. Those statements were treated as substantive material and were not shown to have been retracted or discredited. On that basis, the seized goods were held liable to confiscation under Section 111(b), and the connected vehicles were also treated as liable to confiscation under Section 115(2). The allowance of redemption on payment of fine did not disturb the confiscation finding.

Conclusion: The confiscation of the peas and vehicles was upheld against the appellant.

Issue (ii): Whether penalty under Section 112(b) was justified against the appellant.

Analysis: Although the confiscation finding was sustained, the order did not record any clear finding establishing mens rea on the part of the appellant. The absence of a recorded culpable mental element meant that the basis necessary for penalty under Section 112(b) was not sufficiently made out.

Conclusion: The penalty under Section 112(b) was set aside in favour of the appellant.

Final Conclusion: The appeal succeeded only to the extent of deletion of the personal penalty, while the confiscation findings and consequential redemption-related reliefs were maintained.

Ratio Decidendi: Statements recorded under Section 108, when not retracted or discredited, may be relied upon as substantive evidence for confiscation, but penalty under Section 112(b) requires a finding of mens rea.

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