The word „PANCHNAMA‟ literally means a “record of observation by five people”. Panchanama is essentially a document recording certain things which occur in the presence of the Panchas and which are seen and heard by them. Panchas are taken to the scene of an offence to see and hear certain things.Therefore, panchas are liable to be examined at the trial to depose to those things and their evidence is relied upon in support of the testimony of an investigating officer. A panchanama of this kind recorded and relied upon in support of evidence from the panchas is akin to a statement previously made by him under Section 157 of the Indian Evidence Act, 1878 which says that former statement
of witnesses may be proved to corroborate later testimony as to the same fact.

In Central Excise / Service Tax / Customs cases or in the cases pertaining to Foreign Exchange etc. the Panchanama is a major document and could even be of evidentiary value. During investigation, it plays very important role in establishing guilt of accused. Moreover, sometimes „PANCHNAMA‟ becomes key document in the appreciation of evidence by the court. The reality of the situation has to be properly and correctly grasped in the panchanama. The panch (witness) may have to render accurately the facts of the scene where the goods were found. The panch witnesses must be available at the spot. They must know and see for themselves as to how the facts and circumstances came out, that
existed at the time of search and seizure, as to how the offender was discovered or the suspect was located as to the evidence collected relating to the goods that Panchanama have offended the provisions of the act and as to how the suspect has come into possession and became owner.

 A panchanama seen and heard by the panchas and recorded by a scribe or an officer is only a modus as dictated by an officer and will not render the panchanama invalid and panchanama would be admissible in evidence.

A panchanama properly drawn and carefully incorporating facts seen and heard is an important part of an investigation. The material facts disclosed in a panchanama help in discharging the burden of proof resting on the prosecution. Presumption of guilt in the offender may stand adduced if the panchanama is clear and unambiguous.