Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(CESTAT) 267

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Dilip Gupta, President, Hemambika R. Priya, Member
Ghanshyam Kamra – Appellant
Versus
Principal Commissioner of Customs (Import) – Respondent
CUSTOMS APPEAL NO. 55096 OF 2023 | CUSTOMS APPEAL NO. 55007 OF 2023 | CUSTOMS APPEAL NO. 55005 OF 2023 | CUSTOMS APPEAL NO. 55006 OF 2023 | CUSTOMS APPEAL NO. 55621 OF 2023 | CUSTOMS APPEAL NO. 55622 OF 2023 | CUSTOMS APPEAL NO. 55623 OF 2023

Advocates:
For the Appellants/Petitioners: Mr. T. Chakrapani, Mr. Anil Kumar, 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

Statements recorded during customs inquiries must comply with evidentiary procedures to be admissible; failure to follow such procedures renders them irrelevant.

Headnote:(A) Customs Act, 1962 - Section 14, 108, 138B, 138C - Valuation of imported goods - The Principal Commissioner rejected declared value and imposed penalties under section 114AA on the appellants for mis-declaration - Holding that statements recorded under section 108 were not admissible without examination as witnesses before the adjudicating authority - Compliance with procedures mandated by sections 138B and 138C is crucial for the admissibility of evidence derived from statements made under coercion. (Paras 20-22)

(B) Appeal Procedure - The Tribunal upheld that if mandatory procedures for admitting statements are not followed, the statements cannot be relied upon as evidence; the order impugned was set aside in light of the failure to comply with these procedures. (Paras 21-22)

Facts of the case:
The appellant’s goods were valued under rule 12 of the Customs Valuation Rules. Four substantive appeals were filed against the order of the Principal Commissioner regarding penalties and valuation of goods.

Findings of Court:
The reliance on retracted statements and lack of compliance with evidentiary rules rendered the Principal Commissioner's order unsustainable; thus, the appeals of the appellants are allowed while those of the department are dismissed.

Issues: The appellate court determined whether retracted statements could be used and if the requisites in section 138B and 138C were satisfied.

Ratio Decidendi: The court stressed that all statements must be examined by the adjudicating authority before being admissible as evidence, ensuring procedural fairness and upholding justice principles.

Result: Appeals allowed; impugned order set aside.

Table of Content
1. multiple customs appeals filed against the principal commissioner's valuation order. (Para 1 , 2 , 3)
2. statements must be recorded according to mandated legal procedures to ensure admissibility. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11)
3. adherence to statutory evidentiary requirements is essential for the validity of customs inquiries. (Para 20 , 21)
4. the impugned order can’t stand due to procedural failures, leading to appeals being allowed. (Para 22)

JUSTICE DILIP GUPTA:

Customs Appeal No. 55096 of 2023 has been filed by Ghanshyam Kamra; Customs Appeal No. 55007 of 2023 has been filed by Rajiv Shewaramani; Customs Appeal No. 55005 of 2023 has been filed by Aditya Gupta; and Customs Appeal No. 55006 of 2023 has been filed by Hemendra Rai to assail that portion of the order dated March 10, 2023 passed by the Principal Commissioner of Customs that rejects the declared value of the goods 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 and re-determined under rule 3 and also imposes penalties under section 114AA upon the appellants.

2. Customs Appeal No. 55621 of 2023; Customs Appeal No. 55622 of 2023; and Customs Appeal No. 55623 of 2023 have been filed by the department to assail that part of the order dated March 10, 2023 passed by the Principal Commissioner of Customs that has refrained from imposing penalty under section 112(a)(ii) of the Customs Act .

3. The dispute is in respect of the Bills of Entry that were filed relating to furniture and furniture parts that were imported.

4. 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

5. 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.

6. 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 .

7. 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.”

8. 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 stateme

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