TaxTMI 
TaxTMI 
2026 (5) TMI 879
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....ny Ltd., Hongkong and disallows benefit of Notification No.46/2011-Cus dated 01.06.2011 in respect of 28 Bills of Entry; (ii) Rejects the declared origin of goods in 24 Bills of Entry on the ground that the goods were of Chinese origin; (iii) Rejects the value of imported goods in 79 Bills of Entry as Rs.17,80,05,344/-, under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and re-determine the value of goods at Rs.29,51,82,320/- under Section 14 of the Customs Act, 1962 read with Customs Valuation (Determination of Value of Imported Goods) Rules, 2007; (iv) Confirms demand and recovery of differential customs duty amounting to Rs.10,22,11,057/- short-levied/short-paid on goods under 79 Bills of Entry and appropriates amount of Rs.1,82,893/- deposited during investigation; (v) Imposes penalty of Rs.10,22,11,057/- under Section 114A of the Act; 2. The facts of the case in brief are that the Appellant is a company engaged in export of steel products as well import of Cold Rolled Stainless Steel Coils [CRSS Coils] from China, Malaysia, UAE, Indonesia and Hong Kong. For importing CRSS Coils, the Appellant neg....
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....er he was asked to sit in a separate room, hence he was not aware as to whether data relied upon by Revenue has been actually extracted from the laptop, hard disk and iPhone or not. 3. Learned Advocate Shri Abhinav Kalra and Shri Nishant Mishra appeared on behalf the Appellant submitted that during the course of recording of statement of Shri Puneet Kumar, Director of Appellant dated 08.08.2023 [RUD-3] he was shown printouts of WhatsApp chat between him and one Shri Sanjay Jain, alleged to be extracted from his iPhone. Though he had some chats with Shri Sanjay Jain and the same were also explained by him, remaining chats could not be explained and he was asked to make statement tutored by the officers. 3.1 During the course of recording statement dated 11.01.2024 [RUD-4], he was again shown pages of some WhatsApp chats, alleged to be extracted from his iPhone and was asked to make tutored statement to the effect that the same relates to import of CRSS Coils from China through Malaysian routes. 3.2 During the course of recording statement dated 16.01.2024 [RUD-5], he was shown copy of an e-mail dated 15.04.2021 sent by one Mr. K. Kipgen, Attache' (Commerce), High Commission....
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.... printouts of documents allegedly extracted from gadgets resumed during search dated 13.05.2023 and was asked questions and was made to give tutored answers. 3.5 From the enquiries subsequently made by the Appellant, it appears that in some other case of evasion of customs duty by way of routing Chinese origin CRSS Coils via Malaysia, statement of Mr. Sanjay Jain was recorded on 02.02.2023 [RUD-10], during which he stated that he established a company M/s EVG Metals Industries, in Malaysia, in which he used to purchase CRSS Coils from China and containers were then being changed in Malaysia after preparing documents of Malaysian company. 4. Learned Advocate contended that in the meanwhile, acting on the email of MITI and list of unauthentic COO certificates prepared on the said basis, wherein serial No.65 to 86 related to the imports made against COO certificates issued to M/s Pioneer ULT Enterprises, Malaysia, Show Cause Notice [SCN] No.06/2022 dated 22.07.2022 was issued for demand of customs duty amounting to Rs.31,25,847/- in respect of 17 bills of entry, for which the COO certificates were found to be not authentic. Once the Appellant became aware of the said company, th....
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....to sign on the panchnama prepared by the officers; (ii) Printouts of documents alleged to be extracted from laptop, hard disk and iPhone cannot be read as evidence in absence of certificate under Section 65B of the Indian Evidence Act, 1872 and Section 138C of the Customs Act, 1962; (iii) Authenticity of some COO certificates, for which separate SCN dated 22.07.2022 has been issued, is not relevant for the purpose of the present show cause notice; (iv) In absence of any defect found in COO certificates or its authenticity found to be in dispute, benefit of valid COO certificates cannot be denied; (v) There is no evidence to the effect that the goods imported by Pioneer ULT Enterprises, Malaysia were the same goods which were exported by it to the Appellant. There is no information that COO certificates submitted in respect of the imports made from Ruking International Company Limited, Hang Kong are not authentic; (vi) Imports made from Sky Emirates General Trading, Dubai, UAE were having country of origin Indonesia, Vietnam, Taiwan and there is no evidence that COO certificates submitted in respect of such goods were not authentic; ....
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....overseas suppliers [Para 38.3]: - (i) Shandong MenyinHuarun Import & Export Co. Ltd., China - Goods imported against 4 BoE from the said overseas supplier was admittedly of Chinese origin and was also declared by the Appellant; (ii) Ruking International Co. Ltd., Hongkong : Goods imported against 6 BoE were same as supplied by Shandong to Ruking as is clear from WhatsApp chats and documents retrieved from the hard disk and iPhone during search dated 13.05.2023; (iii) EVG Metal Industries, Malaysia & Excelvantage Global (HK) Ltd., Hongkong - Goods imported against 1 & 2 BoE respectively from the said overseas suppliers are of Chinese origin as is clear from statement dated 02.02.2023 of Shri Sanjay Jain and since he was the owner of Excelvantage Global (HK) Ltd., Hongkong; (iv) Pioneer ULT Enterprises, Malaysia - Goods imported against 24 BoE from the said overseas supplier were of Chinese origin as is clear from the documents retrieved from the Hard Disk recovered during search dated 13.05.2023; (v) PT Best Stainless Steel Corporation, Indonesia - Goods imported against 1 BoE from this overseas supplier were of Chinese origin as is clear....
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.... Advocate appearing for the Appellant submitted that the impugned order dated 22.07.2025, to the extent challenged, is completely without jurisdiction, without authority of law and illegal. The entire case of the Revenue is based on the following materials:- (i) Printouts of documents and WhatsApp chats, allegedly retrieved from the laptop, hard disk and iPhone resumed during search dated 13.05.2023 and thereafter printed; (ii) Statement of Shri Sanjay Jain; (iii) Statements of director of the Appellant Shri Puneet Kumar. 10. Learned Advocate further submitted that so far as the printouts of documents and WhatsApp chats allegedly retrieved from laptop, hard disk and iPhone relied upon by the Revenue are not an admissible evidence in absence of certificate issued under Section 138C(4) of the Act. The fact that no such certificate was issued has been admitted in Para 33 of the impugned order. Reliance in this regard is placed on Arjun Panditrao Khotkar vs. Kailash Kushanrao Gorantyal (2020) 7 SCC 1, which after considering pari-materia provision under Section 65B of the Evidence Act held as under:- "61. We may reiterate, therefore, that the cert....
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.... the evidence produced in the form of electronic evidence were held as not reliable." 11. Learned Advocate contended that the finding in Para 32 of the impugned order that Panchnama dated 13.06.2023 indicates that all conditions and certifications required under Section 138C are complied with, is incorrect and in any case in teeth of Trikoot Iron & Steel Casting Ltd. vs. Additional Director General in Excise Appeal No.55779/2023 Final Order No.58546/2024 dated 09.09.2024 (Tri.-Del.), wherein the following has been held:- "33. The Adjudicating Authority, on its own, examined the oral evidence on the points required to be stated in the certificate. This is not permissible in law. The confirmation of demand is based only on the printouts taken after connecting the hard disk and the pen drive to the computer. 34. It is, therefore, not possible to accept the contention advanced by the Learned Authorized Representative appearing for the department that panchnama itself should be treated as a certificate or that the Adjudicating Authority was justified in itself examining whether the conditions set out in Section 36B(4) of the Central Excise Act had been satisfied." ....
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....." 14. Learned Advocate further placed reliance on Andaman Timber Industries vs. Commissioner of Central Excise, Kolkata-II [2017 (50) S.T.R 93 (SC)] wherein the following has been held:- "7. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above." 15. Learned Advocate further submitted that even the statements of Shri Puneet Kumar does not takes the case of Revenue further, as the same were not voluntary, since no person will self-incriminate himself. The Adjudicating Authority was therefore required to ....
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.... the Revenue's case, since what he stated was explanation of contents of printouts and once the printouts itself are not admissible in evidence, then any statement explaining the inadmissible evidence cannot form the basis of demand. At any rate, mere statement in absence of any corroborative evidence does not form the basis of demand. Further, in none of the statements, it was admitted that the goods were of Chinese origin, except that 4 BoE. On the contrary, director tried to explain that import of goods was on the strength of authentic and genuine COO certificates, which was not found to be fake after any investigation. Once no enquiry from issuing Authority has been conducted in respect of COO certificates submitted by the Appellant and the same were also not found to be not authentic or defective, Revenue cannot be allowed to go behind the COO certificates for rejecting the Country of Origin of imported goods. Even on merits, the finding that the imports made by Appellant was of CRSS Coils of Chinese origin, is incorrect, perverse and based on irrelevant material, as under:- (i). M/s Pioneer ULT Enterprises, Malaysia in respect of imports made from 6 overseas supplier....
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....so incorrect, in as much as there is no evidence on record to even remotely suggests that the Appellant has made some excess payments to the overseas suppliers over and above the value disclosed in the commercial invoice. In absence of any such evidence, any material to show under valuation, including any contemporaneous import of goods at higher value, the allegation of incorrect transaction value and under-value, is without any basis and therefore, the impugned order to the extent, is clearly without jurisdiction. Once the demand is not maintainable on merits, no penalty can be imposed on the Appellant under Section 114AA and therefore, the penalty is also liable to be set aside. Learned Advocate appearing for the Appellant prayed that in view of the aforesaid submissions and pleadings as well as grounds stated in the memo of appeal, the impugned order dated 22.07.2025, to the extent challenged by the Appellant, is liable to be set aside with consequential reliefs to the Appellant. 18. Learned Departmental Authorised Representative appearing for the Revenue reiterated the findings given in the impugned order and stated that there of huge evidence discussed in the impugned orde....
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....er Section 138C of the Customs Act,62 are complied with. Identifying the relevant electronic records relating to the certificate and describing the manner in which it was produced is clearly narrated in the above cited Panchnama. Similarly, details of the device producing it is also clearly mentioned. Satisfying the conditions of 138C(4), i.e., the computer from which the output was produced was used regularly to store or process information during its regular course of activities and throughout the material part of the said period and the computer was operating properly is also described. The officer in charge of the operation or management of the related activities of the company Shri Puneet Kumar has signed that said Panchnama. The objection of the Noticee that certificate as required under Sub-section (4) of Section 138C is not obtained is completely baseless and have no weightage. I do not find any force in such objection. 33. Other objection of the Noticee is that Hard Disk does not find place in definition of 'computer' as given under Explanation (a) of Section 138C. I find that a computer Hard Disk is a device that stores digital data using magnetic storage technol....
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....e in that manner alone. The Directorate of Revenue Intelligence had obtained the documents from hard disc which was not property of the Appellant but was owned by Shri Gaurav brother Shri Puneet who does not have any locus standii in the affairs the Appellant. The conditions prescribed under Section 138C(4) of the Customs Act were not fulfilled as the certificate giving the details was not produced. Thus, as the provisions of Section 138C(4) of the Customs Act have not been satisfied for the reason that the certificate prescribed therein has not been furnished, the documents obtained by DRI from various banks outside India cannot be admitted as evidence. Reliance cannot, therefore, be placed on these documents for this reason. In the case of Kuber Impex Ltd. [2023 4 Centax 266 (Tri.-Bom.), it has been held by the Tribunal that:- "16. It is further clarified that the person need only to state in the certificate that the same is to the best of his knowledge and belief. Most importantly, such a certificate must accompany the electronic record like computer printout, compact disc (CD), video compact disc (VCD), pen drive, etc., pertaining to which a statement is sought to be g....
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.....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 ibid, the electronic documents in the form of computer printouts cannot be relied upon by Revenue for confirmation of the adjudged demands." 25. In view of above facts and judgment, we are of the view that the printouts from electronic devices relied upon to make allegation against the Appellant and are not admissible as evidence. In absence of compliance to the provisions of Section 138C the evidence produced in the form of electronic evidence were held as not reliable. We also find that since all the above exercise right from the seizure of hard disks. Even otherwise we find that apart from relying upon t....
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....e or the information provided by importer is found to be insufficient. Such a request shall seek specific information from the Verification Authority as may be necessary to determine the origin of goods. (2) Where information received in terms of sub-rule (1) is incomplete or non-specific, request for additional information or verification visit may be made to the Verification Authority, in such manner as provided in the Rules of Origin of the specific trade agreement, under which the importer has sought preferential tariff treatment. (3) When a verification request is made in terms of this rule, the following timeline for furnishing the response shall be brought to the notice of the Verification Authority while sending the request : (a) timeline as prescribed in the respective trade agreement; or (b) in absence of such timeline in the agreement, sixty days from the request having been communicated. (4) Where verification in terms of clause (a) or (b) of subrule (1) is initiated during the course of customs clearance of imported goods, (a) the preferential tariff treatment of such goods may be suspended till conclusion of the ve....
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....a vs. Commissioner of Customs, Bangalore [2000 (120) E.L.T. 67 (Kar.)], the Hon'ble Karnataka High Court has observed as follows:- "9. A valid certificate has been issued and the said certificate, even as on date, has not been withdrawn or cancelled for any alleged violation of the condition by the appellant. Unless the said certificate is cancelled, the Customs Authorities cannot impose customs duty. The seizure of the equipment is only a consequential act that would follow the cancellation of the certificate issued in favour of the appellant. So long as the certificate is not cancelled, the respondents could not, in our opinion, have initiated seizure proceedings in the case on hand. Petitioner-appellant was sent only a questionnaire and the said questionnaire has been answered by the appellant herein. No further action has been taken by the respondents. The Director General of Health Services has also not issued any cancellation of certificate as on date. In these circumstances, we are clearly of the view that without withdrawing or cancelling the certificate already issued, the present seizure cannot stand. Therefore we hold that the seizure effected by the respondents....
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....nstitute valid basis for enhancement of value of the imported goods. This finding of the lower appellate authority is squarely supported by the Tribunal's decision in the case of Mahavir Spinning Mills Ltd. reported in 1992 (61) E.L.T. 730 and the Hon'ble Supreme Court's judgment in Civil appeal No. 5263/92 in the case of M/s Sai Impex - 1996 (84) E.L.T. A47 (S.C.). In the circumstances, we do not think that it is necessary to look into the issue whether it was open to the lower appellate authority to admit additional evidence. Valuation done by the original authority on the basis of quotation was not on any legally sustainable basis. Learned Commissioner (Appeals) has set things right. The impugned order does not call for interference. The appeal stands dismissed." 30. In the case of Chirag Enterprises Vs. Commissioner of Customs (EP), Mumbai [2008 (232) E.L.T. 730 (Tri.-Mum.)] it has been held that enhancement in value on the basis quotation is not justified. Enhancement can be made only on the basis of contemporaneous data. 31. As regards the contention of the Appellant that Section 14 of the Customs Act, 1962 and Customs Valuation Rules are applicable only on imported goo....
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....been proposed to be redetermined by applying provisions of the Customs Valuation Rules, 2007 are not 'imported goods' as they have already been cleared by the customs for home consumption. Hence, the said rule cannot be applied for redetermination of declared value. In a series of judgments, the Supreme Court has held that in case words in a statute are clear and plain and only one meaning can be inferred, one is bound to give effect to the said meaning irrespective of consequences. In the support of the above contention, reliance is placed on the decision of the Hon'ble Supreme Court in Dilip Kumar & Company [2018 (361) E.L.T. 577 (SC)]. The Court has observed thus:- "19. The well-settled principle is that when the words in a statute are clear, plain and unambiguous and only one meaning can be inferred, the Courts are bound to give effect to the said meaning irrespective of consequences. If the words in the statute are plain and unambiguous, it becomes necessary to expound those words in their natural and ordinary sense. The words used declare the intention of the Legislature." 34. When it is clearly given that the Customs Valuation Rules, 2007 would be applicable on i....