Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(CESTAT) 271

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Dilip Gupta, President, Hemambika R. Priya, Technical Member
Rambhaj – Appellant
Versus
Principal Commissioner of Customs (Import) – Respondent
Customs Appeal No. 51054 of 2020 | Customs Appeal No. 51156 of 2020 | Customs Appeal No. 51029 of 2020 | Customs Appeal No. 51154 of 2020 | Customs Appeal No. 50907 of 2020

Advocates:
For the Appellants/Petitioners: Bharat Bhushan, A.K. Seth, Chinmaya Seth, Khushboo Seth, Garima Thirani
For the Respondents: Nikhil Mohan Goyal, Rajesh Singh, Shiv Shankar, M.K. Shukla

Statements under section 108 of the Customs Act must follow due process per section 138B to be admissible in adjudication; non-compliance renders them inadmissible.

Headnote:(A) Customs Act, 1962 - Sections 114A, 114AA, 112(ii), 108, 138B, 138C - Penalties imposed for undervaluation and mis-declaration - The investigation revealed cartel formation among importers for evasion of customs duty through undervaluation; reliance was placed on statements made under section 108, which were later retracted - The court emphasized that the statements recorded under section 108 must follow due process as per section 138B before being admissible as evidence - Failure to comply with statutory requirements invalidated the reliance on such statements - The order by the Principal Commissioner, hence, cannot stand and was set aside. (Paras 1-25)

(B) Compliance with Due Process - The court reiterated that procedural safeguards in statutory provisions must be adhered to for admitting evidence in adjudication - Non-compliance with mandatory provisions renders statements inadmissible. (Paras 7, 12-20)

(C) Evidentiary Procedure - The necessity of cross-examination as per established legal standards for the admissibility of statements was upheld to ensure justice. (Paras 21-24)

Table of Content
1. multiple appeals contesting penalties under the customs act. (Para 1 , 2 , 3 , 4 , 5)
2. discussion on procedural adherence for evidential statements under section 108. (Para 6 , 12 , 14 , 20)
3. final judgment based on the necessity of due process in customs adjudication. (Para 10 , 11 , 24 , 25)

JUSTICE DILIP GUPTA:

Customs Appeal No. 51054 of 2020 has been filed by Rambhaj to assail that portion of the order dated May 12, 2020 passed by the Principal Commissioner of Customs that imposes penalties upon him under sections 114A and 114AA of the Customs Act , 1962, the

2. Customs Appeal No. 51156 of 2020 has been filed by Rajiv Shewaramani to assail that portion of the order dated May 12, 2020 passed by the Principal Commissioner of Customs that imposes penalties upon him under sections 112(ii) and 114AA of the Customs Act .

3. Customs Appeal No. 51029 of 2020 has been filed by Hemendra Rai to assail that portion of the order dated May 12, 2020 passed by the Principal Commissioner of Customs that imposes penalties upon him under sections 112(ii) and 114AA of the Customs Act ;

4. Customs Appeal No. 51154 of 2020 has been filed by Aditya Gupta to assail that portion of the order dated May 12, 2020 passed by the Principal Commissioner of Customs that imposes penalties upon him under sections 112(ii) and 114AA of the Customs Act ;

5. Customs Appeal No. 50907 of 2020 has been filed by Praveen Chand Kaushik to assail that portion of the order dated May 12, 2020 passed by the Principal Commissioner of Customs that imposes penalties upon him under section 112(ii) of the Customs Act .

6. 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 .

7. 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 has not been followed.

8. 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

9. 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.

10. 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 .

11. 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

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