CESTAT set aside the penalty imposed on the appellant under...

CESTAT set aside the penalty imposed on the appellant under s.112(b)(i) & (ii) of the Customs Act, 1962 in relation to seized contraband cigarettes and other foreign-origin goods. It held that s.123 was inapplicable as the appellant had not claimed ownership of the goods, and an earlier statement under s.107, recorded while in custody, could not be treated as voluntary. The Tribunal ruled that an inculpatory statement of a co-accused, without independent corroborative evidence, is insufficient to sustain penal liability. Investigation failed to verify the godown owner, establish that the appellant had hired or possessed the godown, or conduct any independent inquiry. Finding the case based solely on retracted custodial statements, CESTAT allowed the appeal and annulled the penalty.