Admissibility of statements and electronic records in customs valuation requires witness examination and cross-examination before admission of evidence.

The text addresses admissibility of statements and electronic records in customs adjudication, holding that statements recorded under the power to summon must be first examined as witnesses and only admitted after the adjudicating authority forms an opinion on admissibility, with the opposing party then being entitled to cross-examine; consequently such statements cannot be relied upon if this procedure is not followed. Computer printouts and emails require appropriate preservation formalities (including panchnama) before being admitted as proof by electronic records, and retracted statements lack probative value; failure to satisfy these requirements precludes rejection of declared transaction value and re-determination of value.

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Issues: (i) Whether statements recorded under section 108 of the Customs Act could be relied upon by the adjudicating authority for rejecting declared transaction value without complying with section 138B; (ii) Whether emails and computer-retrieved invoices relied upon by the adjudicating authority were admissible without compliance with section 138C.

Issue (i): Whether the adjudicating authority could rely upon statements recorded under section 108 of the Customs Act to re-determine transaction value without following the procedure in section 138B.

Analysis: Section 138B makes statements recorded before gazetted officers relevant in proceedings only in specified circumstances. Where clause (a) does not apply, clause (b) requires that the person who made the statement be examined as a witness before the adjudicating authority and the adjudicating authority form an opinion, for reasons recorded, that the statement should be admitted in the interests of justice. Only after admission can cross-examination be afforded. The impugned order relied on section 108 statements that were retracted and were not admitted in evidence by following the statutory procedure in section 138B. Prior decisions applying identical provisions in analogous statutes establish that the procedure is mandatory and failure to comply precludes reliance on such statements.

Conclusion: Statements recorded under section 108 could not be relied upon for re-determining transaction value because the mandatory procedure in section 138B was not complied with; this conclusion is in favour of the assessee.

Issue (ii): Whether emails and invoices retrieved from a supplier's email (computer printouts) could be admitted without compliance with section 138C.

Analysis: Section 138C permits computer printouts as evidence only if the conditions in subsection (2) and the certification requirements in subsection (4) are satisfied. The record did not show compliance with section 138C, no certificate as contemplated was produced, and no panchnama for email printouts was made. The differential duty calculation relied primarily on unadmitted section 108 statements rather than on properly certified electronic records.

Conclusion: Emails and computer-retrieved invoices were not admissible in the absence of compliance with section 138C; this conclusion is in favour of the assessee.

Final Conclusion: The impugned order demanding differential duty, confiscating goods with option to redeem, and imposing penalties could not be sustained because mandatory statutory safeguards for admitting investigational statements and electronic records under sections 138B and 138C were not followed; the appeals are allowed.

Ratio Decidendi: Where statements recorded during inquiry are relied upon in adjudication, the adjudicating authority must first examine the maker of the statement and form a recorded opinion under section 138B before admitting the statement in evidence, and computer printouts are admissible only upon satisfying section 138C's conditions and certification; failure to follow these mandatory procedures precludes reliance on such material.

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