TaxTMI 
TaxTMI 
2024 (6) TMI 259
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....found to be waste clothes "chindi" instead of declared Ladies Fancy Scarves. The goods were seized as per the provisions of Section 110(1) of the Customs Act, 1962, under the reasonable belief that the same has been mis-declared with intent to avail undue benefit of duty drawback. During the course of investigation, statements of various persons namely Shri Nitesh Gangwani, working as an executive of DP Logistics, statement of Shri Arun Kumar, Superintendent, Preventive (appellant), Shri Vishal Punjabi proprietor of M/s. Dynamic International, Shri Sumit Valecha etc. were recorded as per the provisions of Section 108 of Customs Act, 1962. After the investigation, show cause notice dated 12.02.2016 was issued to various persons including the appellant for omission and commission committed by them with regard to mis-declaration of export consignments with intent to avail undue benefit of duty drawback scheme. The matter got adjudicated vide impugned order-in-original dated 23.05.2017 whereunder a penalty of Rs. 25Lakh has been imposed on Shri Arun Kumar (appellant) under Section 114(iii) of Customs Act, 1962. The appellant is before us against the above mentioned impugned order-in-or....
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....f the misdeclaration of export consignment. 2.5 The entire case of the department is that M/s. Dynamic Industries in whose name the export shipping bills were filed by the person involved in misdeclaring the export consignment and M/s. Dynamic Industries was not real exporter and one Shri Vishal Punjabi was real mastermind behind the entire offence of misdeclaration of the export consignment. The investigation conducted revealed that Shri Vishal Punjabi, his brother, his nephew and his wife whose statements were recorded under Section 108 of Customs Act, 1962 none of these persons even knew the appellant. 2.6 Learned advocate contended that it was the case of the department that Vishal Punjabi wanted to export chindis by misdeclaring the same as fancy scarves and thus claiming undue duty drawback benefit. It has been alleged that Shri Vishal Punjabi contacted one Shri Sumit Valecha and Shri Sumit Valecha in turn asked Shri Arun Kumar (appellant herein) for appointment with Customs Broker who can get arrange clearance of the misdeclared cargo. It has been alleged that appellant has introduced Shri Sumit Valecha to Shri Nitesh Gangwani for undertaking clearance of the misdeclar....
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....anki vs. Union of India 2009 (13) STR 337 (S.C.). (b) Rajeev Kumar vs. Commissioner of Customs (Preventive), New Delhi 2022 (382) ELT 209 (Tri - Delhi). (c) Birendar Kumar Singh vs. Commissioner of Customs, Lucknow 2006 (198) ELT 460 (Tri - Delhi). (d) Mahabir Prasad vs. Commissioner of Customs (Preventive), INB, Patna 2000 (126) ELT 803 (Tribunal). (e) Narayan Das vs. Commissioner of Customs, Patna 2004 (178) ELT 554 (Tri - Kolkata). 2.9 Learned advocate further submits that as far as the WhatsApp messages sought to be relied against the appellant, as already submitted above, there is absolutely nothing in the said WhatsApp messages which could lead to an inference that appellant was involved in the aforesaid scandal or that appellant even had knowledge about the same. Without prejudice to the same, it is submitted that even otherwise said WhatsApp messages cannot be relied in evidence against the herein for the purpose of imposing penalty on him u/s. 114(iii) (supra). It is so because the provision of Section 138C of the Customs Act is not complied. Said Section 138C of the Customs act, 1962 is para-materia to Section 65B if the Indian Evide....
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....tion to earn undue duty draw back benefit, Shri Punjabi contacted to one Shri Sumit Valecha and enquired about the CHA (Customs House Agent) who can help them in completing the clearance formalities of export consignments. The case of the department is that Shri Sumit Valecha on behalf of Shri Vishal Punjabi contacted Shri Arun Kumar (present appellant) and Shri Arun Kumar introduced Shri Sumit Valecha to Shri Nitesh Gangwani, H-card holder of a Customs Clearance Agent. From the entire proceedings, it transpires that CHA firm M/s. DP Logistics and its owner did not know the appellant. The appellant has never contacted the CHA M/s. DP Logistics and its owner. It was only Shri Nitesh Gangwani who worked with M/s. DP Logistics and the appellant was having some acquaintance and there are some references in whatsapp chats in these proceedings. 4.1 We take not of the fact that entire case against the appellant has been made on the basis of statements of various persons such as Shri Nitesh Gangwani, Shri Sumit Valecha, Shri Jyoti Prakash Preventive Officer etc. Second, evidence which has been adduced in the proceedings against the appellant is the Whatsapp messages exchanged with Shri ....
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.... and taken up the matter to Dy. Commissioner (Dock Examination), Customs, Mundra and, thereby, the conspiracy was completely got exposed." We find that appellant at the relevant time was neither posted for assessment of export consignments nor he was responsible for physical examination of the export consignment. He was posted primarily for post clearance audit work which in turn has nothing to do with the day to day clearances of export consignments i.e. to say that he could not directly involve himself in helping the clearance of misdeclared export consignments or for facilitating in misdeclaring the export consignment. 4.2 The learned Adjudicating Authority after examining statements of various persons involved in misdeclaration of subject consignment reached to the conclusion that appellant was part of conspiracy in misdeclaring the export consignment for undue duty drawback benefits. We take note of the fact that what transpires is Shri Vishal Punjabi is the master mind behind the entire attempt for export of misdeclared export consignment and the statements of Shri Vishal Punjabi and his brother clearly mentioned that they did not know the appellant. In these circumstan....
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.... to be provided by the Adjudicating Authority for reaching at truth of the matter. It is essential for the Revenue that the Adjudicating Authority has himself to satisfy regarding the veracity of such statements for considering the statement as an evidence. 4.4 We also take note of the decision of the Hon‟ble Apex Court in the case of Andaman Timber Industries vs. CCE, Kolkata-ii reported at 2015 (324) ELT 641 (SC) which is as follows:- "6. According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudica....
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....ings, of the statement, recorded before a Gazetted Central Excise Officer during inquiry or investigation, would arise only after the statement is admitted in evidence in accordance with the procedure prescribed in clause (b) of Section 9D(1). The rigour of this procedure is exempted only in a case in which one or more of the handicaps referred to in clause (a) of Section 9D(1) of the Act would apply. In view of this express stipulation in the Act, it is not open to any adjudicating authority to straightaway rely on the statement recorded during investigation/inquiry before the Gazetted Central Excise Officer, unless and until he can legitimately invoke clause (a) of Section 9D(1). In all other cases, if he wants to rely on the said statement as relevant, for proving the truth of the contents thereof, he has to first admit the statement in evidence in accordance with clause (b) of Section 9D(1). For this, he has to summon the person who had made the statement, examine him as witness before him in the adjudication proceeding, and arrive at an opinion that, having regard to the circumstances of the case, the statement should be admitted in the interests of justice. 20. In fa....
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....o. 2 to summon the makers of the said statements, so that the Revenue would examine them in chief, before the adjudicating authority, i.e., before Respondent No. 2. (ii) A copy of the said record of examination-in-chief, by the Revenue, of the makers of any of the statements on which the Revenue chooses to rely, would have to be made available to the assessee, i.e., to Ambika and Jay Ambey in this case. (iii) Statements recorded during investigation, under Section 14 of the Act, whose makers are not examined-in-chief before the adjudicating authority, i.e., before Respondent No. 2, would have to be eschewed from evidence, and it would not be permissible for Respondent No. 2 to rely on the said evidence while adjudicating the matter. Neither, needless to say, would be open to the Revenue to rely on the said statements to support the case sought to be made out in the show cause notice. (iv) Once examination-in-chief, of the makers of the statements, on whom the Revenue seeks to rely in adjudication proceedings, takes place, and a copy thereof is made available to the assessee, it would be open to the assessee to seek permission to cross-examine the persons ....
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.... agreed to the contents of earlier statement dated 20.08.2015 but my signature was obtained under pressure on the earlier statement at the time of recording this statement dated 26.08.2015. 1 Rather state that answer to Q.No.13 of this statement is not as stated by me t prepared the invoice after Shri Vishal Punjabi informed me on phone about the revised rate, i.e., US $ 3.79 per piece. I also state that answer to Q.No.14 is not as stated by me. Shri Arun Kumar has never told me that he has talked to the partner. I know that Shri Vishal Punjabi is the exporter. My signatures were obtained on all pages of this statement under pressure by the officers of Customs, Mundra. Contents of statement 26.08.2015 are otherwise true and correct, except to the extent stated above. I have put my dated signature on the last page of this statement in token of having gone through the same. 4.6 Though the above cross-examination which is only pertaining to departmental inquiry it indicates that Adjudicating Authority is required first to examine the witnesses in chief and also form an opinion that in the given facts and circumstances of the matter the statements of various persons can be rel....
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....nd shall be admissible in any proceedings thereunder, without further proof or production of the original, as evidence of any contents of the original or of any fact stated therein of which direct evidence would be admissible. (2) The conditions referred to in sub-section (1) in respect of a computer print out shall be the following, namely:- (a) the computer print out containing the statement was produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period by the person having lawful control over the use of the computer; (b) during the said period, there was regularly supplied to the computer in the ordinary course of the said activities, information of the kind contained in the statement or of the kind from which the information so contained is derived; (c) throughout the material part of the said period, the computer was operating properly or, if not, then any respect in which it was not operating properly or was out of operation during that part of that period was not such as to affect the production of the documen....
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....nstant case, it is found that the entire case proceeded on the basis of the electronic documents as evidence. But the investigating officers had not taken pain to comply with the provisions of the law to establish the truthfulness of the documents and merely proceeded on the basis of the statements. Hence, the evidence of electronic devices, as relied upon by the adjudicating authority cannot be accepted. 10. The Hon'ble Supreme Court in the case of Anvar P.V. (supra), while dealing with Section 65B of the Evidence Act, 1872 (Pari materia to Section 138C of the Act, 1962), observed as under : "14. Any documentary evidence by way of an electronic record under the Evidence Act; in view of Sections 59 and 65A, can be proved only in accordance with the procedure prescribed under Section 65B. - Section 65B deals with the admissibility of the electronic record. The purpose of these provisions is to sanctify secondary evidence in electronic form, generated by a computer. It may be noted that the section starts with a non obstante clause. Thus, notwithstanding anything contained in the Evidence Act, any information contained in an electronic record which is printed on a p....
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................................. "22. The evidence relating to electronic record, as noted hereinbefore, being a special provision, the general law on secondary evidence under Section 63 read with Section 65 of the Evidence Act shall yield to the same. Generalia specialibus non derogant, special law will always prevail over the general law. It appears, the Court omitted to take note of Sections 59 and 65A dealing with the admissibility of electronic record. Sections 63 and 65 have no application in the case of secondary evidence by way of electronic record; the same is wholly governed by Sections 65A and 65B. To that extent, the statement of law on admissibility of secondary evidence pertaining to electronic record, as stated by this Court in Navjot Sandhu case, does not lay down the correct legal position. It requires to be overruled and we do so. An electronic record by way of secondary evidence shall not be admitted in evidence unless the requirements under Section 65B are satisfied. Thus, in the case of CD, VCD, chip, etc., the same shall be accompanied by the certificate in terms of Section 65B obtained at the time of taking the document, without which, the secondary evi....
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....ote that the judgment of the Hon'ble Supreme Court in the case of Anvar P.V. (supra) has not been cited and was never brought to the notice of the Bench. Consequently, we are of the view that the decision in the case of Laxmi Enterprises is not applicable to the facts of the present case. 13. It is submitted by the Ld. Counsel for the appellant that the adjudicating authority had not examined the witnesses, as per the provisions of Section 138B of the Act, 1962. He has relied upon the decision of Hon'ble Delhi High Court, in the case of J&K Cigaratte v. Collector of Customs - 2009 (242) E.L.T. 189 = 2011 (22) S.T.R. 225 (Del.). In that case, the Hon'ble High Court, while dealing with Section 9D(1) of the Central Excise Act, 1944 (Pari matria to Section 138B of the Customs Act, 1962) have held that the procedure as prescribed in the statute is required to be followed for proving the truth of the statement. The said decision of the Hon'ble Delhi High Court has also been relied upon by the Hon'ble Punjab & Haryana High Court, in the case of G-Tech Industries v. Union of India - 2016 (339) E.L.T. 209 (P & H). We find force in the submissions of the Ld. Counsel for the appellan....