TaxTMI 
TaxTMI 
2026 (2) TMI 344
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....in-Appeal No. & Dt. Penalty imposed 1. C/75368/2025 OIO No. 103/ADC/(P)/CUS /WB/19-20 dated 05.06.2020 OIA No. KOL/CUS/CCP/KS /674/2023 dated 08.09.2023 Rs.10,00,000/- u/S 114AA of the Act 2. C/75369/2025 OIO No. 100/ADC/(P)/CUS /WB/19-20 dated 05.06.2020 OIA No. KOL/CUS/CCP/KS /648/2023 dated 23.08.2023 Rs.10,00,000/- u/S 114AA of the Act 3. C/75370/2025 OIO No. 101/ADC/(P)/CUS /WB/19-20 dated 05.06.2020 OIA No. KOL/CUS/CCP/KS /672/2023 dated 08.09.2023 Rs.10,00,000/- u/S 114AA of the Act 4. C/76038/2025 OIO No. 102/ADC/(P)/CUS /WB/19-20 dated 05.06.2020 OIA No. KOL/CUS/CCP/KS /673/2023 dated 08.09.2023 Rs.10,00,000/- u/S 114AA of the Act 3. The case of Revenue against the appellant are that during the course of investigation by DRI, Kolkata Zonal Unit in the matter of fraudulent exports made by various exporters through Petrapole Land Customs Station by a syndicate using the IECs of two firms, namely M/s. Spak Enterprises Pvt. Ltd. and M/s Samiran Biswas wherein the goods were either found to be mis-declared in terms of quality, quantity and value or junk to earn undue duty drawback, a DVD was found at the premises....
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....shows Sri Mondal was in export & import business from the year 2009 in absence of the appellant. ▪ Appellant joined in the department after his probation in 2011. ▪ 17.07.2015: Demand-cum-Show Cause Notice issued to four exporters including Sri, Rudra Prasad Mondal for non-fulfilment of Draw Back Rules. ▪ 09.10.2015: Original Authority confirmed demand of two exporters including Rudra Prasad Mondal. ▪ 29.07.2016: DRI, Kolkata, claimed to have seized one DVD which latter on found broken inside the sealed cover under DRI custody. ▪ 03.08.2016: Calcutta High Court dismissed writ filed by the exporters Sri, Rudra Prasad Mondal. ▪ 26.08.2016: concluding investigation on broken DVD, DRI, issued Show Cause Notice to exporters, where appellant was not made co-noticee. ▪ 21.09.2016: DRI searched house of Joti Biswas and found no evidence, drawn NIL Panchanama. ▪ 22.09.2016: DRI recorded statement of Joti Biswas which he retracted in Court on same day. ▪ 25.09.2016: DRI recorded statement of defaulted Exporter Rudra Prasad Mandal, who claimed innocent by shif....
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....over, is not available to connect the appellant with the alleged offence to justify any conspiracy by Shri Vikash Kumar in any stretch of imagination. 6.2. It is also mentioned by the Ld. Counsel for the appellant that the adjudicating authority mechanically relied on the retracted statements of the said private person i.e., Shri Jyoti Biswas knowing that such retraction was made before the Ld. CMM, Court, Alipore in 2016 on which no objection petition has been filed by DRI; that further, statement of the said private person is not supported with compliance of Section 138B of the Customs Act,1962 and hence, cannot be valid evidence to be relied upon under Indian Evidence Act, r/w BSA in the impugned order. 6.3. Moreover, by way of written submissions filed on various dates, the Ld. Counsel for the appellant has advanced various additional submissions, which inter alia can be summarized as under: - (i) That new facts came to light as to electronic records like DVD being fabricated with the preloaded agenda to extend un-due favor to illegal exporters by implicating the appellant, then destroyed such electronic evidence which was ultimately exposed. (ii) These ....
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....r No. CFSL (c)- 727/ 2017/PHY/243/2017/ 225 dated 12.04.2017 had not accepted the said DVD and Micro SD card send by DRI, Kolkata and returned such electronic records to DRI. (viii) In in response to CSFL Chandigarh, Shri Manish Chandra the then Additional Director, of DRI, Kolkata, vide letter dated 21.04.2017 dispatched after 12 days on 03.05.2017 stated that "original recording media as well as the recording device cannot be provided." (ix) Appellant's request as Charged Officer for the cross-examination of Shri Manish Chandra the then Additional Director, DRI, Kolkata, was first denied and then permitted by Ld. Inquiry Authority vide letter dated 10.11.2025, and on 26.12.2025, but the said DRI officer Shri Manish Chandra preferred not to give evidence in the inquiry. (x) It is established that DRI, Kolkata, fabricated such false case against appellant. The adjudicating authority and first appellate authority have mechanically passed orders without evaluating the admissibility of vital evidences and reached to such wrong conclusion. (xi) Admittedly the impugned orders are for demand of Drawback amount due to non-realization of export pro....
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....es of the said exporters and their bank records that the authors of the export invoices-cum-packing list & ARE-1 containing signature of the concerned exporters, which establishes that the allegation of forgery on which impugned orders are passed are far from reality. (xvii) In this connection the appellant relies on the Order dated 10.07.2025 of this Hon'ble Tribunal in the case of Sandeep Kumar Dikshit Vs. Principal Commissioner of Customs (Port), Custom House, Kolkata [Customs Appeal No. 75713 of 2025], on the same cause of action as involving this appellant. 6.4. In view of the above submissions, the Ld. Counsel for the appellant prayed for setting aside the penalties imposed on him under Section 114AA of the Act, as upheld by way of the impugned orders. 7. On the other hand, the Ld. Authorized Representatives of the Revenue appearing before us have supported the impugned orders. Accordingly, they justified the imposition of penalty on the appellant under Section 114AA ibid. 7.1. Additionally, the Revenue has taken the ground that the appeals are not maintainable before this Tribunal in terms of the proviso to Section 129 of the Customs Act, 1962 as these appe....
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....ng only the penalty imposed on them, under the provisions of Section 114AA of the Customs Act, 1962. Therefore, the objection raised by the Ld. Authorized Representatives of the Revenue on this count is turned down. 10.1. We have also examined the case-law of Sans Frontier (supra) and Titagarh Wagons Ltd. (supra) cited by the Revenue in support of its above contentions. However, we find that both the above cases were related to claims of duty drawback whereas, in the present case, the only issue involved is the imposition of penalty on the individual, Shri Vikash Kumar (i.e., the appellant herein), under Section 114AA of the Customs Act, 1962. Hence, the above decisions cited by the Revenue are distinguishable on facts and not applicable to the facts of the case on hand. 10.2. Accordingly, we hold that the appeals are maintainable before this Tribunal. 11. On the merits of the case, we find that the main issues that arise for our consideration are as under: - (1) Whether, the electronic record in the form of the so-called DVD in the instant case can be admissible as evidence for imposition of penalty under Section 114AA of the Customs Act, 1962 on the appellant in....
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....ed the so-called DVD from beginning, fabricated another DVD using a computer device, and on the other, denied access to the original computer device by which said disputed & destroyed DVDs were created, thereby keeping the origin of such electronic evidence out of the reach of fair investigation. 12.2. We find that after about two months from seizure of the DVD in July, 2016 the DRI officers searched the house of Shri Jyoti Biswas and arrested him in September 2016, on 22.09.2016, who was allegedly said to have been involved with the appellant in the export done by the said four exporters, as per his statement recorded by DRI on 22.09.2016. The seizure of the DVD and arrest of Shri Jyoti Biswas after two months from seizure of DVD, therefore, raises serious question on the conduct of the investigation. 12.3. It is well settled that the source and authenticity of electronic records, such as the said DVD in this case, are required to be ensured, in order to be used as evidence. Since electronic records are more susceptible to tampering, alteration, transposition, excision, etc., without such safeguards, an order based on unproved or unverified electronic records like DVDs can l....
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....Spak Enterprises Pvt. Ltd. Since the original DVD seized from the premises of M/s. Spak Enterprise Pvt. Ltd. is unavailable, which is the main source of information based on which the impugned proceedings have been initiated, we are of the opinion that without verifying the original DVD, the information available in the re-constructed DVD cannot be relied upon to implicate the appellant in the alleged offence. Therefore, the allegations of the Revenue to this extent are without any basis, as no corroborative evidence has been adduced in support of the same. 14. In view of the aforesaid facts, so far as the present proceedings are concerned, in the absence of the original DVD or the computer device used in the alleged act of forgery, the allegations levelled against the appellant in relation to forging alleged export documents or any act in relation to such forgery for imposition of penalty under Section 114AA ibid., are found to be unsubstantiated. 15. In this connection, we have also examined the contentions raised by the appellant as to non-compliance of the provisions of Section 138C of the Customs Act, 1962 by the Revenue as far as the purported contents of the DVD in que....
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....omputer 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 document or the accuracy of the contents; and (d) the information contained in the statement reproduces or is derived from information supplied to the computer in the ordinary course of the said activities. (3) Where over any period, the function of storing or processing information for the purposes of any activities regularly carried on over that period as mentioned in clause (a) of sub-section (2) was regularly performed by computers, whether - (a) by a combination of computers operating over that period; or (b) by different computers operating in succession over that period; or (c) by different combinations of computers operating in succession over that period; or (d) in any other manner inv....
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....ves, stores and processes data, applying stipulated processes to the information and supplying results of these processes; and (b) any reference to information being derived from other information shall be a reference to its being derived therefrom by calculation, comparison or any other process." 15.2. A similar issue came up for consideration before the Tribunal at Mumbai in the case of M/s. Jeen Bhavani International Versus Commissioner of Customs, Nhava Sheva-III [(2023) 6 Centax 11 (Tri.Bom)]. The relevant observations made by the Tribunal in the above Order are reproduced below: - "12.1 Section 138C ibid deals with the situation, where the computer printouts cannot be considered having evidentiary value in certain circumstances. Various conditions have been prescribed under the statute. Admittedly, in this case, the prescribed conditions have not at all been complied with by the department. More particularly, the required certificate in terms of sub-section (4) of Section 138C ibid has not been furnished by the department. In this context, the Tribunal in the case of S.N. Agrotech (supra) has held that in absence of certificate required under section 138C....
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.... 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 paper, stored, recorded or copied in optical or magnetic media produced by a computer shall be deemed to be a document only if the conditions mentioned under sub-section (2) are satisfied, without further proof or production of the original. 15. Under Section 65B(4) of the Evidence Act, if it i....
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....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 evidence pertaining to that electronic record, is inadmissible." 11. Upon perusal of the judgment of the Hon'ble Supreme Court in the case of Anvar P.V. (supra), we note that the Apex Court has categorically laid down the law that unless the requirement of Section 65B of the Evidence Act is satisfied, such evidence cannot be admitted in any proceeding. We note that the Section 138C of the Customs Act is parimateria to Section 65B of the Evidence Act. Consequently, the evidence in the form of computer printouts, etc., recovered during the course of investigation can be admitted as in the present proceedings only subject to the satisfaction of the sub-section (2) of Section 138C. This refers to the certificate from....
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....the actual invoice values have been shown, which were less than the declared invoice values. We find that the procedures laid down under section 138C have not been observed by the department, in addition to non mentioning of the details of the CPU, the place of installation in the premise, custodian of the CPU etc. Therefore, we find that as per the ratio laid down in the above referred judgments, the documents retrieved, lost their evidentiary value and cannot be relied upon for upholding the charges of undervaluation of goods and demand of the differential duty." 15.2.1. We find that the above decision has been affirmed by the Hon'ble Supreme Court as reported in (2023) 6 Centax 14 (S.C.). 15.3. Therefore, by applying the ratio laid down in the decisions cited supra, we are also of the view that the information available in the said DVD cannot be relied upon as admissible evidence against the appellant in the impugned proceedings in the absence of compliance of the provisions of Section 138C ibid. 16. In view of the detailed discussions in the foregoing paragraphs, we hold the electronic record, in the form of the so-called DVD in the present case, cannot be treated as a....
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....able doubt. However, apart from the said statement, no tangible or documentary evidence has been adduced by the Revenue to substantiate its case. We also take note of the fact that Shri Jyoti Biswas, i.e., the person from whom the above said statement/s have been recorded, is a co-accused in this case. Therefore, such statement/s cannot be the sole basis to implicate the appellant in the alleged offence. The role of the appellant, if any, was required to be proved by means of cogent and independent evidence, for the purpose of imposition of penalty under the Act. 19. We also take note of the appellant's submission that the said statement/s relied upon against him in this case were allegedly recorded under duress and coercion and retracted later and thus such retracted statements have no evidentiary value in the absence of any corroborative evidence. Since the statement of Shri Jyoti Biswas has been retracted, we agree with the contention of the appellant that the same cannot be relied upon as evidence for implicating the appellant in the alleged offence, in the absence of any corroborative evidence. Reliance in this regard is placed on the decision of Jeen Bhawani International ....
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....ent evidence. Madras High Court in the case of Shri Nandi Dhall Mills India Private Limited 2022 (60) G.S.T.L. 227 (Mad.)] held that merely because an assessee has, under the stress of investigation, signed a statement admitting tax liability and has also made a few payments as per the statement, cannot lead to self-assessment or self-ascertainment. Though the judgement was pronounced in respect of GST, it goes to indicate that acceptance by the appellant during the course of recording the statement is not just enough and the same has to be confirmed by adducing independently corroborative evidence. The whole case cannot rest simply on the basis of a retracted statement though belatedly. 14.2 We find that the appellants have shown enough cause for delayed retraction. Learned Commissioner has simply brushed the same aside. He should have examined the appellant during the adjudication proceedings in terms of Section 138(B) of the Customs Act, 1962, to confirm the veracity. Learned adjudicating authority could have examined the officers too. Section 138B (1) ibid deals with the aspect of relevance of statements under certain circumstances. It has been provided that a statemen....