TaxTMI 
TaxTMI 
2026 (9) TMI 566
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..... Further, 3(three) appeals (C/20032/2020, C/20033/2020 and C/20034/2020) have been filed Ms. Jyothi C Jain, Proprietor of M/s Samaavesh, M/s.Samskruti Interiors through its Proprietor Mr. N. Abhishek Jain and Samaavesh (HUF), through its Karta Mr. Chenraj Jain, respectively against the Order-in-Original dated 17.10.2019. 3. Aggrieved by said impugned orders, above 6(six) appeals were filed before this Tribunal and this Tribunal as per the Final Order No. A/20261-20266/2022 dated 01.08.2022 held that since the request for cross examination was not allowed and considering that it is mandatory as per Section 138B of the Customs Act, 1962, the impugned orders were set aside and matter was remanded for cross examination of witnesses as requested by the Appellant. Aggrieved by said order, Revenue filed appeals before the Hon'ble High Court of Karnataka and Hon'ble High Court in Customs Appeal No.02/2023 vide order dated 13.08.2023 set aside the aforesaid Final Order dated 01.08.2022 and remanded the appeals to the Tribunal for fresh consideration. Since the issues involved in the present appeal are common, all the 6(six) appeals are taken up together for hearing. 4. When the appea....
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....t recorded under section 108 of the Customs Act 1962, Learned Counsel submits that the statement cannot be taken as admissible evidence without undergoing the rigours placed under Section 138B of the Customs Act 1962 i.e. cross-examination. It is an admitted fact that Appellant-Jyothi C Jain had made a request for cross-examination of the persons whose statements were relied in the issue of show cause notice (SCN) to allege illegality in import, however it is denied without any valid reason. In such cases, cross-examination is mandatory to safeguard the law as prescribed under Section 138B of the Customs Act, 1962 and if not granted, no reliance can be placed on such statements. In this regard, Learned counsel drew our attention to following decisions:- 1. G-Tech Industries Vs. Union of India 2016 (339) E.L.T. 209 (P&H) wherein it was held that, "Adjudicating authority cannot straightaway rely on a statement unless rigor of Section 9D(1)(b) is met with". Section 9D(1)(b) of the Central Excise Act, 1944 is pari-materia with Section 138 of the Customs Act, 1962 as held in Elora Tobacco Co Ltd., Vs. CCE, Indore 2017 (347) E.L.T. 614 (Tri-Del). 2. Arya Abhushan Bhanda....
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....e is no authenticity for such invoices since the invoices are only photocopies which are neither certified by the issuing person or countersigned by Customs of respective exporting countries. Learned Counsel further submits that, as per the existing practice, when such investigation is conducted, such documents are routed through COIN offices posted at Indian embassy. Further, the exporting country is supposed to authenticate or verify the authenticity of the document or in the absence of any proper certification, reliance on such a document to invoke the penal provision is prima facie unsustainable and against statutory principle. In this regard, Learned Counsel relied on the following decisions:- 1. S.N. Agrotech Vs. Commissioner of Customs, New Delhi 2018 (361) E.L.T. 761(Tri-Del) wherein it was held that "printouts taken from computer during investigation can only be admitted subject to satisfaction of sub-section (2) of Section 138C of the Customs Act, 1962". 2. CC, Mumbai Vs. Bussa Overseas Properties Ltd., 2007 (216) E.L.T. 659 (S.C.) wherein it was held that, "undervaluation cannot be established when the department is relying on unsigned xeroxed copies of....
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....l owner on the import made by other two legal entities, it is neither proposed in the Show Cause Notice(SCN) nor it is applicable in the present case since the imports are made prior to 31.03.2017. Learned Counsel further submits that appropriation of the amount paid by the Appellant out of the total recovery made during investigation from the Appellant-Jyothi C Jain clearly prove that the DRI treated all the firms as separate entity during the investigation. Further it is an admitted fact that the payment towards the overseas suppliers against each import was routed through the respective Bank accounts of 3(three) IEC holders for that reason also, the impugned order is illegal and unsustainable. In this regard, learned counsel drew our attention to following decisions:- 1. Nalin Z. Mehta Vs. CC, Ahmedabad 2014 (303) E.L.T. 267 (Tri-Mum) wherein the Hon'ble Tribunal held that "Person cannot be held as an importer if Bill of Entry is not filed by him". 2. Bimal Kumar Mehra Vs. CC, Import, Mumbai 2011 (270) E.L.T. 280 (Tri-Mum) wherein it was held that "Person filing Bills of Entry. He is importer of goods and liable to pay duty. It is immaterial that he is mere....
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....n cannot be established unless remittance is proved". 16. Learned Counsel summaries that the e-mails allegedly originated from foreign suppliers were not retrieved from the computer system of the appellant and in the absence of any certificate by sender, system administrator or service provider they have not admissible evidence. As per the law laid down by the Hon'ble Supreme Court in the matter of Tommaso Bruno Vs. State of Uttar Pradesh reported in [2015, 7 SCC 178], it has to be considered as unauthenticated electronic evidence. Such unauthenticated printouts of emails are not primary evidence, do not satisfy Section 138C and cannot be treated as admissible evidence. The origin, accuracy and authenticity of such emails, therefore, remain unproved. 17. Learned Counsel also submits that once the e-mails are excluded and tainted, Section 108 statements are to be disregarded. The remaining evidence is mere circumstantial, inferential and insufficient to establish the alleged offence. 18. As regards confiscation of goods and redemption fine imposed as per the impugned order, Learned Counsel submits that law is settled that in the event of non-availability of goods for confis....
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....rted goods were highly under-valued. The investigating agency requested the foreign suppliers to provide Commercial Invoices, Packing Lists, Bill of Lading, Export Documentation, payment details, and correspondence and communication in respect of goods imported by Samaavesh (HUF) 21. As regards appeal of other appellant, learned AR submits that Mr. Chenraj Jain, Karta of M/s. Samaavesh (HUF) allowed proxy import of above stated goods in the name of his firm for Ms. Jyothi C. Jain. He has neither negotiated nor finalised the deals for import of goods in the name of his firm. All the above stated goods imported by Ms. Jyothi C. Jain were cleared on the basis of manipulated and fabricated documents. They subscribed to declarations certifying the truth of such manipulated and fabricated documents under the respective Bills of Entry knowing or having reason to believe that the same were not true. In this case, he had lent his Import Export Code (IEC) for import of the goods made in the name of his IEC. He lent the said IEC to Applent- Jyothi C. Jain knowing fully that the same would be utilized for import of under-valued goods. He was willing to participate in the duty evasion and Re....
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....ing such statement, Adjudication Authority held that cross examination is not required. In this regard, Learned AR submits that in such quasi-judicial proceedings, the Department need not prove with mathematical precision. 24. Learned AR also draws our attention to the statement recorded from Appellant-Jyothi C. Jain on 19.09.2017 and submits that as per the statement on 15.03.2018, Appellant-Jyothi C. Jain has admitted that she had adopted undervaluation while the goods are imported in the name of three entities and Appellant reiterated her statement on 19.09.2017. It is also admitted that the difference between actual invoice and understated invoice were handed over to the representatives of the overseas supplier in India. Further during the investigation, statement was recorded on 21.08.2018 and admitted the conversation in the WhatsApp and proved the issuances of understated invoices were extracted from the mobile phone. 25. As regards the statement of Ms. Vertika Samar recorded on 29.09.2017, Appellant- Jyothi C. Jain has admitted two invoices for the same order by M/s. Line Kit SP and M/s. Ital Creation NS Di Kaur Harmeek. Learned AR also drew our attention to the compa....
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.... regarding documents supplied from overseas supplier obtained without forensic certification as submitted, Learned AR submits that Section 138C create a deeming provision. Document seized or received from outside India in the course of investigation are presumed authentic unless the contradictory is proved. The Appellant has not placed a single counter document from any supplier refuting the allegation in the show cause notice or finding in the impugned order. 27. As regards the beneficial importer and the averment that the finding is beyond the scope of show cause notice, Learned AR submits that the allegation in the Show Cause Notice and finding in the impugned order are consistent. Both are based on proxy importation and IEC lending and appellants declaration. The impugned order applied the same fact to the same charge and not beyond the show cause notice. Formal proxy front company cannot hide behind formal registration. As regards the allegations that the provisions of Section 12 of the Customs Valuation Rules are not established. Learned AR submits that once Appellant lent IEC credential knowing that they used for undervaluation to import, signing Bill of Entry declaration....
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....cha, Learned AR drew our attention to the finding in the impugned order and submits that Ms. Jyothi Jain was present during forensic imaging and made no objection. Cross-examination of panchas is 'a mere attempt to digress adjudication proceedings and procrastinate imminent action'. Learned AR further submits that Appellant No.1 herself confirmed authenticity of documents in statement under section 108. Cross-examination of panchas serves no purpose when main accused authenticated documents. Cross examination is not mandatory as held in plethora of cases. 29. As regards authenticity of documents and forensic examination, allegation of learned counsel is that electronic /WhatsApp evidence not examined as required under Section 65B of Evidence Act/Section 138C of the Customs Act, 1962. In this regard, Learned AR submits that DRI is not a forensic body; no GEQD examination done. Learned AR further submits that 138C Customs Act, 1962, overrides all other laws regarding admissibility of microfilms, facsimile copies and computer printouts. Learned AR submits that since section 138C is a self-contained code for Customs proceedings and explicitly overrides section 65B, Evidence ....
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....vesh represented by Ms. Jyothi C Jain and proxy front-companies cannot hide behind formal registration. 31. As regarding imposition of penalty under Section 112, Learned AR submits that 'Active collusion and willful misrepresentation of material facts relevant for assessment of duty admitted by Ms. Jyothi Jain in her statement.' Co-noticees are liable under Section 112 for their commissions /omissions. section 114A applies as duty evaded by suppression of material facts with intent. As regards the submission that Transaction value was not formally 'rejected' under Rule 12 of Customs Valuation Rules, 2007 before redetermination, Learned AR submits that Appellant's firms did not declare the Transaction Value and they declared a falsified value. There is a fundamental difference between a wrong value being declared (where Rule 12 applies) and no value being declared at all (where the investigating officer proceeds from first principles). Here, the declared figure was not a 'transaction value'. 32. Heard both sides, perused the documents and the additional submissions made by both sides. 33. Even though the counsel for the Appellant submitted that the matte....
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....goods. Mere doubt not sufficient to reject the declared value and to resort to valuation rules to determine the value. In the present case, allegation regarding undervaluation was initiated on the ground that as per the DRI intelligence report, there were reasonable doubt regarding the declared value and only on such presumption, the Rule 12 of the Customs Valuation Rules is invoked. The finding is given on the invoice copy allegedly recovered during investigation from the premises of one of the appellant. There is no evidence on record to substantiate that the investigating officer had any evidence on record to allege under valuation and entire allegations are made based on the documents /evidence recovered during the investigation. Thus, Rule 12 of the Customs Valuation Rules is not complied. As regarding valuation of goods, we find that though the goods imported by the appellants are general in nature, there is no attempt made by DRI to find out the value of the contemporaneous import as mandated under the Provisions of Valuation Rules. Law is settled that if the manner of doing a particular act is prescribed under any statute, the act must be done in that manner or not at all. ....
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....ropriate for the purpose of showing that the document was produced by a computer; (c) dealing with any of the matters to which the conditions mentioned in Sub-section (2) relate, and purporting to be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities (whichever is appropriate) shall be evidence of any matter stated in the certificate; and for the purposes of this Sub-section it shall be sufficient for a matter to be stated to the best of the knowledge and belief of the person stating it." 39. Sub-section 4 of Section 138C makes it abundantly clear that if any statement is to be read into evidence and when such documents are computer printouts, then a certificate has to be obtained in accordance with (a), (b) and (c) of Sub-section 4, referred to above. 40. We find that the issue regarding evidentiary value of data retrieved from electronic media was considered by Hon'ble Supreme Court in the matter of M/s. Anvar P. V Vs. P. K. Basheer and others - (2014) 10 SCC 473 and held that:- "22. The evidence relating to electronic record, as noted herein....
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....Appellant in connection with Section 138C, by holding that the documents printed out from lap-top will be admissible as evidence in view of the fact that the truth of such documents stand admitted by the proprietor in his statement. However, Hon'ble Supreme court held that "We have gone through the said decision of the Tribunal and we note 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". Further during course of the hearing of those appeals, the learned Counsel appearing for the Revenue provided with a compilation consisting of documents in the form of Record of Proceedings dated 06.07.2015, 21.07.2015 and 21.04.2016 respectively. Relevant para of the judgment is reproduced below:- "19. The Record of Proceeding dated 06.07.2015 reads thus: In connection with the investigations in respect of imports made by M/s. Suresh Kumar & Co. (Impex) Pvt. Ltd. (SKCO) A-17, Sonu Tower, IInd Floor, Dr. Mukherjee Nagar Commercial Complex, Del....
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....5 reads thus: In connection with the investigations in respect of imports made by M/s. Suresh Kumar & Co. (Impex) Pvt. Ltd. (SKCO A-17. Sonu Tower. IInd Floor. Dr. Mukherjee Nagar Commercial Complex. Delhi 110 009. the officers of Directorate of Revenue Intelligence (Hqrs.). 7th floor. I.P. Bhawan. I.P. Estate, New Delhi (herein after referred to as the DRI) vide Panchnama dated 16.06.2015 drawn at office-cum-godown Building No. 1092. Bhalswa Village. Near Azadpur Bypass. Delhi 110 033 had resumed certain documents. Lenovo Make desktop and one laptops from the abovementioned office-cum-godown premises and resumed two laptops (one Sony make and one Asus make). one I-pad and one I-Phone from the residential premises vide Panchnama dated 16.06.2015 drawn at residential premises at B-111/303. 19. Rajpur Road. Delhi 110 054. Another laptop of Sony make was submitted in DRI office by Shri Nikhil Asrani, Director of M/s. Suresh Kumar & Co. (Impex) Pvt. Ltd. On 16.06.2015. 2. In today's proceeding. It was proposed to take the printouts of e-mail/documents from the external Hard Disk of make WD Elements, bearing S/N WX4 1A45DUD6E, which was copied under Records of Proc....
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....drawn at residential premises at B III/303, 19, Rajpur Road, Delhi 110 054. Another laptop of Sony make was submitted in DRI office by Shri Nikhil Asrani, Director of M/s. Suresh Kumar & Co. (Impex) Pvt. Ltd. on 16.06.2015. 2. In today's proceeding, it was proposed to take the printouts of e mail I documents from the external Hard Disk of make WD Elements, bearing S/N WX41A45DUD6E, which was copied under Records of Proceeding dated 29.06.2015. Shri Aseem Asrani, Director of M/s. SKCO presented himself at DRI (Hars.) office to witness the proceedings. One envelope was produced before Shri Aseem Asrani which was sealed with a paper slip containing dated signature of Shri Nikhil Asrani and DRI Officer. The paper seals on the said envelops was checked by Shri Aseem Asrani, which was found intact. 3. Shri Aseem Asrani removed the paper seal of the said envelope and took out one external Hard Disk of make WD Elements, bearing S/N WX41A45DUD6E The said external hard disk was connected to a computer installed in DRI (Hqrs.) office and certain e mail data was extracted in Microsoft Outlook and certain printouts were taken from the said data. The printouts were serially....
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....earch was conducted on 12.09.2017, only Mahazar was drawn and electronic devices including laptop, iPhone, documents related to imports catalogue and pricelist was seized. There is no mention regarding record of proceedings adopted at the time of seizure of the electronic goods. Further inspite of seizure of document under panchanama /mahazar on 12.09.2017, forensic test of the electronic instrument and data was examined only on 23.09.2017 and hash value of the data was not recorded. Thus, in the absence of compliance of the procedure as contemplated under Section 138C(4) of the Act, 1962, the information retrieved from electronic media including retrieval of invoice obtained from system, data retrieved from WhatsApp and emails cannot be considered as having admissible evidence on the ground that Section 138C is a self-contained code for customs proceedings and explicitly overrides section 65B of Evidence Act as submitted by learned AR. 44. As regarding invoice also, we find that as per the judgment of the Hon'ble Supreme Court in the matter of Bussa Overseas Properties Ltd. (supra), undervaluation cannot be established when the department is relying on unsigned xeroxed copies o....