The failure to follow statutory procedures for the admissibility of witness statements invalidates reliance on such statements, impacting penalties for mis-declaration.

JUSTICE DILIP GUPTA:

All these four appeals seek quashing of the order dated March 10, 2023 passed by the Principal Commissioner of Customs, ICD-TKD, New Delhi, the Principal 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 , the Customs Act and re-determined under rule 3. Penalties have also been imposed upon the appellants.

2.Customs Appeal No. 55009 of 2023 has been filed by Hemendra Rai (Manager of M/s Prostar Exports Limited);Customs Appeal No. 55010 of 2023 has been filed by Aditya Gupta (Director of M/s Unclear Logistics Pvt. Ltd.); andCustoms Appeal No. 55011 of 2023 has been filed by Rajiv Shewaramani (Director of M/s Prostar Exports Limited) to assail the imposition of penalties upon them under sections 112(ii) and 114AA of the Customs Act, 1962 , the Customs Act Section 138B of the Customs Act.Customs Appeal No. 55091 of 2023 has been filed by Tulsi Das to assail the imposition of penalties upon him under section 114A and 114AA 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. 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.

4. The appeals were heard on two issues relating to the applicability of section 138B and section 138C 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 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 witne