Digital evidence retrieved from an assessee's mobile device via a lawful panchnama is admissible under the Customs Act even without a formal section 138C certificate, provided the device ownership is uncontested and chain of custody is established.

P.V.SUBBA RAO

1. The Order dated 22.12.2023 passed by the Principal Commissioner (Inland Container Depot)(Import), TKD, New Delhi is assailed by M/s Proweld Industries Private Limited¹Proweld and its Director Shri Dinesh Juneja²Dinesh in these two appeals in so far as it is pertaining to them. In the impugned order, the Commissioner has confirmed demand of customs duty of Rs. 1,53,17,038/- on Proweld under section 28(4) of the Customs Act, 1962³Act along with applicable interest and imposed an equal amount as penalty under section 114A of the Act. He has also imposed a penalty of Rs. 40,00,000/- on Proweld under section 114AA of the Act. The Commissioner has also imposed penalty of Rs. 10,00,000/- on Dinesh under section 114AA of the Act.

2. Proweld is a private limited company which imports and sells welding machines and its parts and Dinesh is its Director. Acting on intelligence, the Directorate General of Revenue Intelligence⁴DRI initiated investigation suspecting undervaluation of imported good by Proweld to evade customs duty. In the course of the investigation the officers of DRI retrieved parallel invoices from the mobile phone of Dinesh and also recorded statement of Dinesh, some buyers and also gathered certain other evidence. After completing the investigation, a Show Cause Notice⁵SCN dated 25.09.2020 was issued by DRI to Proweld and Dinesh proposing to reject the transaction value, re-determine the value, recover differential duty, hold the imported goods liable to confiscation and to impose penalties. Both the appellants resisted the proposals in the SCN which were, however, confirmed in the impugned order. Hence these two appeals.

Submissions of the appellant.

3. Shri Devesh Tripathi, learned counsel for the appellant has made the following submissions:

(i) Proweld is a private company established by its Director Dinesh and his wife Mrs. Jyoti Juneja in 2012 and in 2015 it started importing welding machines and its parts and accessories.

(ii) During May 2015 to August, 2016, the appellant imported goods from various suppliers in China and filed Bills of Entry and cleared goods accordingly.

(iii) On 01.10.2019, DRI issued summons to Dinesh alleging that the appellant evaded customs duty by undervaluing imported welding machines and on 07.10.2019. Dinesh gave his statement under section 108 of the Act accepting the allegation of undervaluation.

(iv) On 07.10.2019 and 27.12.2019 Dinesh submitted two demand drafts towards the partial discharge of the differential customs duty. On 16/17.10.2019 the Mobile phone of Dinesh was examined and documents were retrieved.

(v) The department also recorded statements of two buyers Shri Mohit Diwan and Shri Shankar Mirchand Bhawani, in which they said that Proweld had issued invoices for lower prices to them than the actual sale price and collected the differential amount in cash.

(vi) During hearing, the appellant was allowed to cross-examine both buyers and they retracted their earlier statements.

(vii) On 19.06.2020, another statement of Dinesh was recorded and the show cause notice was issued on 25.09.2020.

(viii) On 09.08.2023 Dinesh appeared before the Commissioner for personal hearing, submitted written reply and during hearing he retracted his previous statement recorded under section 108 of the Act;

(ix) The Commissioner passed the impugned order erroneously.

(x) The alleged documents retrieved from Dinesh’s mobile phone cannot be used to dete