Additional Director General Adjudication Vs Suresh Kumar And Co. Impex Pvt. Ltd. & Ors. (Supreme Court of India)
Supreme Court reviews CESTAT order in Suresh Kumar & Co. Impex case, emphasizing that electronic evidence compliance under Section 138C(4) can be satisfied through signed records and statements.
The Supreme Court of India addressed appeals filed by the Revenue under Section 130E of the Customs Act, 1962 challenging the decision of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, which had allowed appeals filed by Suresh Kumar & Co. Impex Pvt. Ltd. and others and set aside penalties imposed by the Additional Director General (Adjudication), Directorate of Revenue Intelligence (DRI).
Background:
The respondents were engaged in importing branded food items and selling them in Delhi and Mumbai. Based on intelligence, the Revenue conducted raids on both business and residential premises of the respondents. Investigations suggested that the respondents had under-declared the Retail Sale Price (RSP) or Maximum Retail Price (MRP) of imported goods in their Bills of Entry, allegedly resulting in duty evasion. Consequently, a show cause notice dated 6 June 2016 demanded differential duties of Rs. 9.24 crore from Respondent No. 1 and Rs. 9.83 lakh from Respondent No. 2, along with interest, penalty, and confiscation of goods.
The Adjudicating Authority upheld the demand, which the respondents challenged before the CESTAT.
CESTAT Decision:
CESTAT allowed the appeals on the sole ground of non-compliance with Section 138C(4) of the Customs Act, 1962. The Tribunal noted that electronic documents seized during searches, including computer printouts, could only be admitted if accompanied by a certificate under Section 138C(4). Since the Revenue failed to produce such certificates, the evidence could not be relied upon.
The Tribunal referred to Anvar P.V. v. P.K. Basheer (2014 10 SCC 473), establishing that electronic evidence is admissible only if Section 65B of the Indian Evidence Act requirements are met. It also distinguished the earlier decision of M/s Laxmi Enterprises, which the Revenue relied upon, stating that Anvar P.V. was not considered there. Consequently, the Tribunal set aside the penalties without addressing other issues under Section 138B of the Act.
Revenue’s Arguments before the Supreme Court:
The Revenue contended that the Tribunal erred in disallowing electronic evidence. It argued that documents extracted from electronic devices were acknowledged by the respondents in statements recorded under Section 108 of the Customs Act, which should constitute compliance with Section 138C(4). Reliance was placed on Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal (2020 7 SCC 1), where the Supreme Court held that Section 65B(4) is mandatory but compliance depends on the facts of each case, especially if a certificate is beyond the party’s control.
The Revenue submitted Records of Proceedings dated 6 July 2015, 21 July 2015, and 21 April 2016, showing that the respondents witnessed and signed printouts from external hard disks and computers during investigations. Statements under Section 108 further confirmed the authenticity of these documents, which were not retracted. The Revenue also cited Kum. Shubha @ Shubhashankar vs. State of Karnataka (2025 SSC online SC 1426), emphasizing that deviation from the prescribed certificate format does not render the document invalid if authenticity is undisputed.
Respondents’ Arguments:
The respondents maintained that mere acknowledgment of documents in statements under Section 108 did not satisfy the strict statutory requirements of Section 138C(4). They urged that the Supreme Court uphold the Tribunal’s finding that non-compliance invalidated the electronic evidence.
Supreme Court Decision:
The Supreme Court observed that Sections 138C(4) of the Customs Act and 65B(4) of the Evidence Act are pari materia. While the provisions are mandatory, their application must be assessed in light of factual circumstances. The Court examined the signed Records of Proceedings and statements under Section 108, concluding that there was due compliance of Section 138C(4). It emphasized that the requirement does not necessitate a rigidly formatted certificate if the authenticity of documents is undisputed and all reasonable steps were taken.
Accordingly, the Supreme Court partly allowed the Revenue’s appeals, set aside the CESTAT order, and directed that the appeals filed before the Tribunal be restored and reheard on merits, excluding the issue of Section 138C(4). The Court clarified that its observations were confined to the compliance with Section 138C(4) and that the Tribunal should independently consider other arguments raised by the respondents.
Judicial Precedents Referenced:
