TaxTMI 
TaxTMI 
2026 (4) TMI 1286
X X X X Extracts X X X X
X X X X Extracts X X X X
....on 114A of the Act. He has also imposed a penalty of Rs. 40,00,000/- on Proweld under section 114AA of the Act. The Commissioner has also imposed penalty of Rs. 10,00,000/- on Dinesh under section 114AA of the Act. 2. Proweld is a private limited company which imports and sells welding machines and its parts and Dinesh is its Director. Acting on intelligence, the Directorate General of Revenue Intelligence [DRI] initiated investigation suspecting undervaluation of imported good by Proweld to evade customs duty. In the course of the investigation the officers of DRI retrieved parallel invoices from the mobile phone of Dinesh and also recorded statement of Dinesh, some buyers and also gathered certain other evidence. After completing the investigation, a Show Cause Notice [SCN] dated 25.09.2020 was issued by DRI to Proweld and Dinesh proposing to reject the transaction value, re-determine the value, recover differential duty, hold the imported goods liable to confiscation and to impose penalties. Both the appellants resisted the proposals in the SCN which were, however, confirmed in the impugned order. Hence these two appeals. Submissions of the appellant. 3. Shri Devesh Tri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rieved documents do not match the imported goods of the appellant. (xv) Re-determination of value on the basis of average percentage is legally unsustainable. (xvi) The transaction value cannot be rejected in the absence of evidence of payments over and above the transaction value. (xvii) The two buyers of Proweld had retracted the statements during cross-examinations; (xviii) The impugned goods were not liable to confiscation under section 111(m) of the Act because there was no misdeclaration. (xix) Extended period of limitation was wrongly invoked and the demand is time barred. (xx) Penalties imposed on Proweld and Dinesh cannot be sustained. Submissions of the Revenue 4. Learned authorized representative appearing for the Revenue vehemently supported the impugned order and submitted as follows: (i) Proweld is a private limited company and Dinesh is the Director of Proweld and it is engaged in importing welding machines. (ii) Suspecting undervaluation, DRI initiated investigation during which documents were retrieved from Dinesh's mobile phone which formed the basis for rejection of the transaction valu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....9 and 27.10.2019, Dinesh also submitted two demand drafts towards partial discharge of duty liability. Thereafter, the SCN was issued on 25.09.2022. (x) The retraction claimed by the appellant was submitted in the written reply in the show cause notice on 09.08.2023 almost four years after the first statement was recorded. The assertion that the statement were recorded under threat and coercion has no legs to stand on. (xi) What is admitted need not be proved. Dinesh has admitted to the undervaluation and did not retract his statement for at least four years. Further, undervaluation was proved on the basis of the documentary evidence recovered from Dinesh's phone. In view of the above, the impugned order is correct and proper and calls for no interference. 5. We have considered the submissions advanced by both sides and perused the records. 6. The arguments of the learned counsel for the appellant is based on (a) that no certificate under section 138C has been issued by the department and, therefore, the evidence collected from his mobile phone cannot establish a case against either of the appellants and (b) the statement of Shri Dinesh rec....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be relevant only insofar as determining whether there has been due compliance of Section 138C (4) of the Act, 1962 is concerned. The evidentiary value of such Section 108 statements in any other proceedings, if any would have to be considered in accordance with law, including the compliance of Section 138B of the Act, 1962. 46. At this stage, we must also look into the observations made by this Court in the case of "Kum. Shubha @ Shubhashankar v. State of Karnataka," reported in 2025 SSC online SC 1426 relied upon by the learned counsel appearing for the revenue. We quote:- "A certificate not given in the prescribed format per se will not make it invalid, especially when the authenticity of these marked documents is not in dispute." 47. In view of the aforesaid, we partly allow these appeals of the revenue. 48. The judgment and order passed by the Tribunal is hereby set aside. The appeals filed by the assessees before the Tribunal are ordered to be restored to its original file and to be reheard by the Tribunal on grounds other than Section 138C(4) of the Act, 1962. 49. It is needless to clarify that on remand the Tribunal shall rehear ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s did not correspond in value to what was declared in the Bills of Entry, the imported goods were liable for confiscation and it has correctly been held so in the impugned order. However, since the goods were not physically available, they were not confiscated or nor any redemption fine was imposed on the appellant. 12. The contention of the learned counsel for the appellant is that the demand was time barred. 13. Demand under section 28(4) can be raised if non-payment or short payment of duty is by reason of any collusion, willful mis-statement or suppression of facts. In this case, the appellant had submitted some invoices with the Bill of Entry while certain other invoices were found in the mobile phone of Dinesh. There was no explanation as to why the invoices were different in the mobile phone. It would have been a different case, if Dinesh had explained the documents retrieved from his mobile phone and how they did not pertain to him or were not relatable to the imported goods. This could have been done at the first instance, once through forensic examination, the invoices were retrieved. 14. We, therefore, find no infirmity in invoking the extended period of limitat....