Admissibility of recorded statements and email printouts in customs valuation requires statutory examination and certification; non-compliance nullifies re-determination.

Relevancy and admissibility of recorded statements and electronic records under the Customs framework are addressed, holding that statements recorded under summons must be first examined as witnesses before the adjudicating authority, which must form an opinion on admissibility and permit cross-examination before such statements are admitted; failure to follow these mandatory procedures renders those statements inadmissible, and computer printouts/e-mail copies are inadmissible without compliance with prescribed certification and panchnama requirements. Consequent valuation re-determination and penalties based on non-compliant evidence cannot be sustained and were set aside.

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Issues: (i) Whether statements recorded under section 108 of the Customs Act could be relied upon in adjudication proceedings without following the procedure prescribed by section 138B; (ii) Whether printouts of e-mails and computer-generated evidence could be relied upon without compliance with section 138C of the Customs Act.

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

Analysis: Section 138B(1)(b) requires that, where clause (a) is not attracted, the person who made the statement must be examined as a witness before the adjudicating authority and the authority must form an opinion, having regard to the circumstances, that the statement should be admitted in evidence; only thereafter may the adversely affected party be afforded opportunity for cross-examination. Authorities interpreting analogous provisions (section 9D of the Central Excise Act) treat this procedure as mandatory and hold that failure to follow it renders statements recorded during inquiry irrelevant and inadmissible for proving their contents.

Conclusion: The statements recorded under section 108 could not be relied upon because the mandatory procedure in section 138B was not complied with.

Issue (ii): Whether printouts of e-mails and other computer-generated material are admissible without compliance with section 138C.

Analysis: Section 138C deems computer printouts admissible only if the conditions in subsection (2) are satisfied and, where applicable, a certificate as specified in subsection (4) is produced or equivalent compliance is shown. The record lacked Panchnama or other evidence showing due compliance with section 138C, and the statements acknowledging the printouts had been retracted, undermining any claimed compliance.

Conclusion: The printouts of e-mails could not be relied upon because the requirements of section 138C were not satisfied.

Final Conclusion: Because statements under section 108 were inadmissible in the absence of compliance with section 138B and the computer printouts were inadmissible for non-compliance with section 138C, the re-determination of transaction value and imposition of penalties could not be sustained; the impugned order upholding the re-determination and penalties is set aside and the appeals are allowed.

Ratio Decidendi: Statements recorded under section 108 acquire relevance in adjudication only after the adjudicating authority examines the maker as a witness and forms a written opinion under section 138B(1)(b), and computer-generated documents are admissible only upon satisfying the conditions and certification required by section 138C.

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