Statements recorded under Section 108 of the Customs Act cannot be relied upon unless the statutory procedure under Section 138B is strictly followed, ensuring fairness in evidence acceptance.

JUSTICE DILIP GUPTA:

This appeal seeks to assail the order dated December 03, 2020 passed by the Commissioner of Customs (Appeals), the Commissioner (Appeals) that rejects the appeal filed by the appellant against the order dated March 18, 2019 passed by the Additional Commissioner by which 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 and re-determined under rule 3.

2. An investigation was conducted by the Directorate of Revenue Intelligence regarding undervaluation in imports of furniture and furniture parts. It was believed that large number of importers had formed a cartel and indulged in large scale evasion of customs duty by undervaluation and mis-declaration of the goods. The allegations of mis-declaration and undervaluation of furniture and furniture parts was based mainly on the printouts of emails and statements of persons recorded under section 108 of the Customs Act.

3. It would, therefore, have to be seen whether the statements recorded under section 108 of the Customs Act can be considered as relevant if the procedure contemplated under section 138B of the Customs Act has not been followed.

4. The appeal was 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 Commissioner (Appeals) has relied upon statements made by the appellant 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 appellant in his 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 Customs Act.

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 recorde