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2026 Supreme(Online)(CESTAT) 265
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Dilip Gupta, President, Hemambika R. Priya, Member (Technical)
Rajiv Shewaramani – Appellant
Versus
Principal Commissioner of Customs (Import) – Respondent
CUSTOMS APPEAL NO. 50432 OF 2024 | CUSTOMS APPEAL NO. 50431 OF 2024 | CUSTOMS APPEAL NO. 50493 OF 2024 | CUSTOMS APPEAL NO. 50851 OF 2025
For the Appellants/Petitioners: Mr. A.K. Seth, Mr. Chinmaya Seth, Ms. Khushboo Seth, Ms. Garima Thirani
For the Respondents: Mr. Nikhil Mohan Goyal, Mr. Rajesh Singh, Mr. Shiv Shankar, Mr. M.K. Shukla
Mandatory compliance with evidentiary procedures in customs proceedings is required for the admissibility of statements under the Customs Act.
Headnote:(A) Customs Act, 1962 - Section 14, 108, 138B and 138C - Customs Valuation - The declared value of goods was rejected, and penalties imposed under the Act were challenged - It was found that statements relied upon regarding mis-declaration were retracted and not admissible per the mandatory provisions of the Act. (Paras 1-19)
(B) The court ruled that compliance with mandatory procedures outlined in sections 138B and 138C regarding the admissibility of statements is essential for the collection of evidence in customs proceedings, emphasizing that failure to do so invalidates the reliance on such statements. (Paras 9-12)
Facts of the case:
The appellants contested penalties and valuations arising from customs declarations of furniture imports, which were reportedly undervalued based on statements made during an inquiry that were later retracted by the appellants.
Findings of Court:
The Tribunal found that the rejection of declared values lacked adequate statutory compliance, necessitating the appeals' acceptance.
Issues: The applicability of sections 138B and 138C regarding the admissibility of statements recorded under the Customs Act and the assessed value of the goods.
Ratio Decidendi: The mandatory nature of procedural provisions must be followed in adjudication processes to ensure fairness and justice. The appeals were allowed due to procedural lapses in admitting evidence.
Result: All appeals are allowed.
| Table of Content |
|---|
| 1. challenging penalties and customs valuations. (Para 1 , 2) |
| 2. discussing the reliance on statements made during customs inquiries. (Para 3 , 4 , 6 , 7 , 9) |
| 3. mandatory procedures for statement admissibility. (Para 8 , 10 , 11 , 12 , 13) |
| 4. outcome of the appeals based on evidentiary issues. (Para 19 , 20) |
JUSTICE DILIP GUPTA:
All these four appeals seek quashing of the order dated February 12, 2024 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 Bills of Entry that were filed relating to furniture and furniture parts that were imported.
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 the truth of the facts which it contains only when the person who made the statement is examined as a witness before the Court and such Court is of the opinion that having regard to the circumstances of the case, the statement should be admitted in evidence, in the interests of justice, except where the person who tendered the statement is dead or cannot be found. In view of the provisions of sub- section (2
