2018 (4) TMI 856 - AT - Customs

Tribunal Invalidates Order: Electronic Evidence Inadmissible

M/s. S.N. Agrotech, Shri Nikhil Asrani, Shri Aseem Asrani, M/s. Suresh Kumar & Co. (Impex) Pvt. Ltd. Versus C.C., New Delhi

M/s. S.N. Agrotech, Shri Nikhil Asrani, Shri Aseem Asrani, M/s. Suresh Kumar & Co. (Impex) Pvt. Ltd. Versus C.C., New Delhi - 2018 (361) E.L.T. 761 (Tri. ... Issues Involved:1. Admissibility of electronic evidence under Section 138C of the Customs Act, 1962.2. Compliance with Section 138B of the Customs Act, 1962 regarding the examination of witnesses.3. Confirmation of differential duty and penalties based on alleged under-valuation and misdeclaration of imported goods.Issue-wise Detailed Analysis:1. Admissibility of Electronic Evidence under Section 138C of the Customs Act, 1962:The primary contention of the appellants was the inadmissibility of electronic evidence due to the absence of a certificate as mandated by Section 138C of the Customs Act, 1962. The appellants relied on the Supreme Court's decision in Anvar P.V. vs. P.K. Basheer & Others (2014) and the Tribunal's decision in Telebrands Pvt. Ltd. vs. C.C. (2016). Section 138C outlines the conditions under which computer printouts and electronic records can be admitted as evidence, requiring a certificate that identifies the document, describes its production, and is signed by a responsible official. The Tribunal found that the DRI officers did not comply with these requirements, as the electronic documents were not accompanied by the necessary certificate. Consequently, the evidence obtained from electronic devices was deemed inadmissible, leading to the conclusion that the adjudicating authority's reliance on such evidence was flawed.2. Compliance with Section 138B of the Customs Act, 1962 Regarding the Examination of Witnesses:The appellants argued that the adjudicating authority failed to examine witnesses in compliance with Section 138B of the Customs Act, 1962. This section mandates the examination of witnesses to establish the truth of their statements. The Tribunal noted that the adjudicating authority did not follow the prescribed procedure for examining witnesses, as highlighted by the Delhi High Court in J&K Cigarette vs. Collector of Customs (2009) and the Punjab & Haryana High Court in G-Tech Industries vs. Union of India (2016). However, since the demand of duty could not be sustained due to the inadmissibility of electronic evidence, the Tribunal found it unnecessary to delve further into the compliance with Section 138B.3. Confirmation of Differential Duty and Penalties Based on Alleged Under-Valuation and Misdeclaration of Imported Goods:The adjudicating authority had confirmed the demand of duty along with interest and imposed penalties on the importers, based on the alleged under-valuation and misdeclaration of imported goods. The evidence for the actual price was retrieved from electronic devices, which the appellants disputed. The Tribunal found that the entire case was based on electronic evidence that did not comply with Section 138C requirements. As a result, the confirmation of differential duty and penalties could not be upheld. The Tribunal also noted that the decision in M/s. Laxmi Enterprises vs. C.C., which was relied upon by the Revenue, did not consider the Supreme Court's judgment in Anvar P.V., making it inapplicable to the present case.Conclusion:In conclusion, the Tribunal set aside the impugned order, finding that the electronic evidence relied upon by the adjudicating authority was inadmissible due to non-compliance with Section 138C of the Customs Act, 1962. Additionally, the failure to examine witnesses as per Section 138B further weakened the Revenue's case. Consequently, the appeals filed by the appellants were allowed, and the adjudged demands against them were dismissed.