Exporters Win Challenge Against Customs Penalty Under Sections 114(iii) and 114AA Due to Procedural Evidentiary Flaws

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....CESTAT adjudicated a customs export scheme dispute involving penalty provisions under sections 114(iii) and 114AA of the Customs Act, 1962. The tribunal ruled that statements recorded under section 108 cannot be considered admissible evidence under section 138B without proper cross-examination procedures. The tribunal found the penalty imposition against the parties was unsupported by substantive evidence, specifically rejecting statements recorded without procedural safeguards. Consequently, the tribunal allowed the appeal, effectively quashing the penalties imposed on the exporters for alleged improper diversion of goods under the Focus Market Scheme.....