Commissioner of Customs Vs Junaid Kudia Etc. (Supreme Court of India)
The matter arose from an Order-in-Original dated 08.11.2019 passed by the Commissioner of Customs (Import-II), Mumbai, concerning imports made through Bombay Port and Nhava Sheva Port by M/s Plastic Cottage Trading Company. The adjudicating authority rejected the declared assessable value of the imported consignments, re-determined the assessable value, confirmed differential customs duty with interest, appropriated the amount deposited by the importer, and imposed penalties on the importer and its partners, Shri Junaid Kudia and Shri Zaid Kudia, under Sections 112(a), 114A and 114AA of the Customs Act, 1962. The case was initiated on the basis of DRI investigations alleging undervaluation of imported goods. During searches conducted at the importer’s premises and at M/s Winsor Enterprises, printouts of emails and invoices were recovered. The Department relied on these electronic records and statements of the partners to allege that the actual value of imported goods was higher than the value declared before Customs.
Before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), the appellants contended that the statements relied upon by the Department had been recorded under pressure and were subsequently retracted. They also submitted that the Department’s case rested entirely on electronic records recovered from the email account of an employee of their sister concern, whose statement had not been recorded and whose cross-examination was denied. It was further argued that the electronic documents were inadmissible because the mandatory requirements of Section 138C of the Customs Act had not been complied with. The appellants also contended that there was no evidence of payment of any amount over and above the declared invoice value and that the Bills of Entry had already attained finality after assessment. The Revenue defended the adjudication by relying upon the recovered emails, the statements of the partners and decisions supporting the evidentiary value of such statements, while also submitting that cross-examination could not be granted as the concerned person did not appear despite summons.
The Tribunal examined Section 138C of the Customs Act, 1962 governing admissibility of computer printouts and electronic records. It held that the statutory requirements, including certification contemplated by the provision, had not been complied with. Referring to the Supreme Court decision in Anvar P.V. v. P.K. Basheer, the Tribunal observed that electronic records could not be relied upon unless the prescribed statutory conditions were satisfied. As the Revenue had not produced the certificate required under Section 138C, the Tribunal held that the electronic documents relied upon for alleging undervaluation were inadmissible.
The Tribunal further held that the adjudicating authority had not followed the procedure contemplated under Section 138B of the Customs Act regarding reliance on statements and had not afforded cross-examination of the witnesses. It also observed that the retracted statements could not, by themselves, sustain the allegation of undervaluation, particularly when there was no corroborative evidence establishing payment of any excess amount to overseas suppliers or any other evidence supporting the charge of undervaluation. The Tribunal additionally held that the Bills of Entry had already been assessed and had attained finality, and therefore their declared value could not be re-determined without review or appeal against the earlier assessments. On these findings, the Tribunal set aside the customs duty demands and penalties against the importer and its partners and allowed the appeals with consequential relief.
The Revenue challenged the Tribunal’s decision before the Supreme Court by filing civil appeals. After hearing the learned Additional Solicitor General and perusing the material on record, the Supreme Court declined to entertain the civil appeals. The Court condoned the delay but dismissed the appeals. As a result, the Tribunal’s order setting aside the duty demands and penalties remained undisturbed. Pending applications were also disposed of.
Read CESTAT Order in this case: Allegation of undervaluation of imported goods based on retracted statements unsustainable
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
Delay condoned.
Having heard Mr. N Venkataraman, learned Additional Solicitor General and on carefully perusing the material placed on record, we are not inclined to entertain the present Civil Appeals, the same are accordingly dismissed.
Pending application(s), if any, stand disposed of.
Delay condoned.
Civil Appeals are dismissed in terms of the Signed Order which
is placed on the file.
Pending application(s), if any, stand disposed of.
