The court ruled that statements made under coercion cannot be admitted into evidence unless the procedural compliance of examination and cross-examination is satisfied.

JUSTICE DILIP GUPTA:

All these three appeals seek quashing of the order dated December 15, 2023 passed by the Principal Commissioner of Customs. The declared value of the goods has been rejected under rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 , the 2007 Valuation Rules read with section 14 of the Customs Act, 1962 , the Customs Act and re-determined under rule 3. Penalties under section 112(a)(ii) and section 114AA have been imposed upon the appellants.

2. The dispute is in respect of the 66 Bills of Entry that were filed during the period from April 2016 to November 2016 relating to furniture and furniture parts that were imported. The allegation of mis-declaration and under-valuation of furniture and furniture parts is based on the printouts of original invoices recovered from the email and various statements, including that of the supplier made under section 108 of the Customs Act.

3. The appeals were heard on two issues relating to the applicability of section 138B and section 138C of the Customs Act.

Section 138B of the Customs Act

4. The Principal Commissioner has relied upon statements made by the appellants under section 108 of the Customs Act to record a finding regarding mis-declaration and under-valuation of the goods, but these statements were retracted by the appellants in their replies.

5. Section 108 of the Customs Act deals with power to summon persons to give evidence and produce documents. It provides that any Gazetted Officer of customs shall have the power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under the Customs Act.

6. Section 138B of the Customs Act deals with relevancy of statements under certain circumstances and it is reproduced below:

“138B. Relevancy of statements under certain circumstances.

(1) A statement made and signed by a person before any Gazetted Officer of customs during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, —

(a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the court considers unreasonable; or

(b) when the person who made the statement is examined as a witness in the case before the court and the court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice.

(2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a court, as they apply in relation to a proceeding before a court.”

7. It would be seen that section 108 of the Customs Act enables the concerned Officers to summon any person whose attendance they consider necessary to give evidence in any inquiry which such Officers are making. The statements of the persons so summoned are then recorded under this provision. It is these statements which are referred to in section 138B of the Customs Act. A bare perusal of sub-section (1) of section 138B makes it evident that the statement recorded before the concerned Officer during the course of any inquiry or proceeding shall be relevant for the purpose of proving t