Customs Act evidence admissibility: tribunal excludes retracted inquiry statements and unsecured email printouts, quashing valuation and penalties

Subsection (2) requires that proceedings under the Customs Act follow subsection (1) procedural safeguards, meaning a person who makes a statement during inquiry must first be examined as a witness and the adjudicating authority must then form an opinion on admissibility; if admitted, the opposing party must be given opportunity for cross-examination, thereby giving such statements evidentiary relevance when procedure is complied with. Retracted statements recorded under section 108 and electronic email printouts without a panchnama fail the procedural requisites for admissibility under the statutory scheme, resulting in the revaluation and penalty orders being unsustainable and the appeals allowed.

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Issues: (i) Whether statements recorded under section 108 of the Customs Act could be relied upon in adjudication proceedings without compliance with section 138B of the Customs Act; (ii) Whether the conditions and certification requirements of section 138C of the Customs Act were satisfied so as to admit computer printouts/email printouts as evidence.

Issue (i): Whether statements recorded under section 108 are relevant and admissible in adjudication proceedings without first examining the person who made the statement and the adjudicating authority forming an opinion under section 138B(1)(b).

Analysis: Section 138B(1)(b) makes statements recorded before Gazetted Officers relevant in proceedings only after the person is examined as a witness before the adjudicating authority and the adjudicating authority forms an opinion that the statement should be admitted in evidence in the interests of justice. Case-law applying analogous provisions has held the procedure mandatory and requires that opportunity for cross-examination follows admission. Where these steps are not followed, statements recorded during inquiry cannot be relied upon as relevant evidence.

Conclusion: Statements recorded under section 108 cannot be relied upon in the adjudication unless the procedure in section 138B(1)(b) is complied with; failure to comply renders such statements inadmissible.

Issue (ii): Whether section 138C(2) and (4) conditions for admissibility of computer printouts/email printouts were satisfied in the absence of proper documentary safeguards and where supporting statements were retracted.

Analysis: Section 138C requires satisfaction of the conditions specified in subsection (2) for computer printouts and a certificate or equivalent evidence under subsection (4) identifying the document and describing how it was produced. Reliance on statements to show compliance is unacceptable where those statements have been retracted and where there is no evidence such as a panchnama or certificate demonstrating due compliance with section 138C(4).

Conclusion: The conditions of section 138C were not satisfied in the present proceedings; the computer printouts/email printouts could not be admitted as evidence.

Final Conclusion: For the reasons above, the impugned order relying on the said statements and on unverifiable computer printouts is unsustainable and the order rejecting declared value and imposing penalties cannot be sustained; the order is therefore set aside in respect of the matters considered.

Ratio Decidendi: Statements recorded under section 108 attain relevance in adjudication only after the person is examined and the adjudicating authority forms an opinion under section 138B(1)(b), and computer printouts/email printouts are admissible under section 138C only upon satisfaction of subsection (2) and appropriate certification under subsection (4); failure to comply with these mandatory procedures renders such material inadmissible.

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