Section 108 statements and seizure evidence sustained smuggling finding, but penalty was reduced because appellants were only commission agents.

Section 108 statements, corroborated by the seizure circumstances, were treated as sufficient to sustain the finding of smuggling, and the plea of involuntariness or later retraction did not displace that evidence. The absence of cross-examination of the panch witness or seizing officers was held not to amount to a breach of natural justice on these facts. However, the appellants were found to be only commission agents and not the principal organisers of the smuggling operation, so the liability to penalty was maintained but the quantum was reduced accordingly.

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Issues: Whether the appellants' statements under Section 108 of the Customs Act, the absence of cross-examination of panch witnesses, and the surrounding circumstances justified the finding of smuggling and the imposition of penalty, and whether the penalty required reduction.

Analysis: The goods were found at the railway station and the appellants were present at the time of seizure. Their statements under Section 108 gave a clear and detailed account of the movement of the smuggled cigarettes, the persons involved, and their own role in marketing the goods for commission. The statements were corroborative in material particulars and were not dislodged by the plea of involuntariness or later retraction. The failure to cross-examine the panch witness or seizing officers did not cause any failure of natural justice in the facts of the case. At the same time, the appellants were found to be only receiving commission and not to be the principal organisers of the smuggling operation.

Conclusion: The finding of illegal import and liability to penalty was sustained, but the penalty was reduced from Rs. 50,000 each to Rs. 10,000 each.

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