CESTAT allowed the appeal and set aside the penalty imposed on...

CESTAT allowed the appeal and set aside the penalty imposed on the appellant, holding that statements recorded under section 108 of the Customs Act are not admissible as relevant evidence under section 138B unless the maker is first examined as a witness before the adjudicating authority and the authority, after forming an opinion on admissibility, admits the statement and affords the accused the opportunity of cross-examination. Because the impugned penalty was predicated on such inadmissible statements and the procedural safeguards were not observed, the penalty levied on the appellant (including that attributed to the managing director) could not be sustained and was quashed.