Statements recorded under section 108 of the Customs Act are inadmissible if not examined under required procedures, quashing associated penalties.

JUSTICE DILIP GUPTA:

All these three appeals seek quashing of the order dated December 12, 2022 passed by the Commissioner of Customs (Appeals),the Commissioner (Appeals) by which the order dated March 18, 2019 passed by the Additional Commissioner has been upheld. The Commissioner (Appeals) observed that there was a specific finding of the Additional Commissioner that there was evidence of undervaluation in respect of the import of furniture in the form of parallel invoices. Thus, as the appellants were part and parcel of the entire fraud, they cannot escape penal action. The appeals have, accordingly, been dismissed for the said reasons. The Additional Commissioner had relied upon the statements made by the three appellants under section 108 of the Customs Act and on the printouts of emails submitted by Shri Rajiv Shewaramani on January 25, 2016.

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 Commissioner (Appeals) 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 cours