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2026 Supreme(Online)(CESTAT) 273

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Dilip Gupta, President, Hemambika R. Priya, Member (Technical)
Aditya Gupta – Appellant
Versus
Principal Commissioner of Customs (Import) – Respondent
CUSTOMS APPEAL NO. 55004 OF 2023|CUSTOMS APPEAL NO. 55008 OF 2023|CUSTOMS APPEAL NO. 55536 OF 2023

Advocates:
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

Statements under section 108 of Customs Act inadmissible in adjudication without examining maker as witness, authority's opinion for admission in justice's interest, and cross-examination opportunity per section 138B; computer printouts need section 138C certification.

Headnote:(A) Customs Act, 1962 - Sections 108, 114AA, 138B, 138C - Statements recorded under section 108 during inquiry are relevant for proving truth of facts only if person is examined as witness before adjudicating authority which forms opinion for admission in interests of justice, followed by cross-examination opportunity - Procedure mandatory; non-compliance renders statements inadmissible (Paras 6-14). Where statements retracted, cannot be relied upon without following section 138B(1)(b).

(B) Customs Act, 1962 - Section 138C - Computer printouts admissible only upon satisfying conditions in sub-section (2) and certificate under sub-section (4) - Mere recovery and retracted statements insufficient; no compliance shown, hence inadmissible (Paras 15-18).

Facts of the case:
Appeals against order imposing penalties for mis-declaration and undervaluation of imported furniture and parts, based on retracted statements under section 108 and email printouts recovered from supplier's email, allegedly supplied during statements.

Findings of Court:
Impugned order rejecting declared transaction value and imposing penalties set aside for violating mandatory procedures under sections 138B and 138C.

Issues: Admissibility of retracted section 108 statements and computer printouts without following sections 138B and 138C procedures.

Ratio Decidendi: Statements under section 108 inadmissible without examining maker before adjudicating authority, forming opinion for admission, and providing cross-examination; printouts require section 138C compliance including certificate - Rationale to prevent coerced statements; failure vitiates findings of undervaluation.

Result: Appeals allowed; impugned order set aside.

Table of Content
1. dispute over mis-declaration and undervaluation of imported furniture. (Para 1 , 2 , 3)
2. section 138b requires witness examination for statement relevancy. (Para 4 , 5 , 6 , 7)
3. mandatory procedure under 138b/9d; retracted statements inadmissible. (Para 8 , 9 , 10 , 11 , 12 , 13 , 14)
4. section 138c demands certificate for computer printouts admissibility. (Para 15 , 16)
5. non-compliance with 138b/138c invalidates reliance on evidence. (Para 17 , 18 , 19)
6. impugned order set aside; appeals allowed. (Para 20)

JUSTICE DILIP GUPTA:

All these three appeals seek quashing of the order dated March 10, 2023 passed by the Principal Commissioner of Customs, ICD-TKD, New Delhi, the Principal Commissioner that adjudicates the show cause notice dated November 01, 2019. The Principal Commissioner has imposed penalties upon all the three appellants under section 114AA of the Customs Act, 1962, the Customs Act

2. The dispute is in respect of the Bills of Entry that were filed relating to furniture and furniture parts that were imported. The allegation of mis- declaration and undervaluation of furniture and furniture parts is based on various statements of the supplier, customs broker and the importer made under section 108 of the Customs Act and the printouts of invoices recovered from the email of M/s Prostar Exports Limited. These printouts are said to have been supplied by Rajiv Shewaramani and Hemendra Rai during the course of their statements made under section 108 of the Customs Act. It is from the statements made under section 108 of the Customs Act and invoices recovered from the email of M/s Prostar Exports Limited that the Principal Commissioner has drawn a conclusion regarding undervaluation of the imported goods.

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

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2026 Supreme(Online)(CESTAT) 273

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNALDilip Gupta, President, Hemambika R. Priya, Member (Technical)Aditya Gupta – AppellantVersusPrincipal Commissioner of Customs (Import) – RespondentCUSTOMS APPEAL NO. 55004 OF 2023|CUSTOMS APPEAL NO. 55008 OF 2023|CUSTOMS APPEAL NO. 55536 OF 2023

Statements under section 108 of Customs Act inadmissible in adjudication without examining maker as witness, authority's opinion for admission in justice's interest, and cross-examination opportunity per section 138B; computer printouts need section 138C certification.