2024 (9) TMI 1257 - AT - Customs

Misdeclaration of goods in respect of value and quantity - goods though were declared as unbranded however branded caps of different non-popular as well as reputed brands like Puma Nike Adidas etc. were found - infringement of Intellectual Property Rights (Imported Goods) Enforcement Rules 2007 - reliability of electronic evidence retrieved from the appellant s e-mail - extended period of limitation - HELD THAT - This provision is arising out of Section 65B of the Indian Evidence Act (the model provision for the admissibility of electronic evidence in judicial proceedings). This section has been dealt with by Hon ble Apex Court in a recent decision in the case of Arjun Panditrao Khotkar v. Kailash Kishanrao Goratyal 2020 (7) TMI 740 - SUPREME COURT . The Hon ble Supreme Court has clarified that the interpretation of Section 65B - Under Section 65B(1) any information contained in an electronic record which has been stored recorded or copied as a computer output shall also be deemed as a document and shall be admissible as evidence without further proof or production of the originals if the conditions mentioned are satisfied. Section 65B(2) lays down the criteria that must be satisfied for the information to be categorized as a computer output. In the present case the original electronic record would be the computer of the Election Commission in which the video footage is first stored. The CDs where the content of the video recording is copied shall constitute the secondary copies of the electronic record. It was held that a certificate under Section 65B(4) shall have to be obtained only when the secondary copies of the electronic record are produced before the Court. Production of a certificate shall not be necessary when the original electronic record is produced. The original electronic record can be adduced directly as evidence if the owner of the computer/tablet/mobile phone steps into the witness box and establishes that the device where the information is first stored is owned/operated by him. If the computer where the electronic record was first stored happens to be part of a computer network or computer system (as defined under the Information Technology Act 2000) and it is not possible to bring such a network/system physically to the Court then secondary copies can be produced along with the certificate stipulated by Section 65B(4). The allegations against the appellant as made out in the show cause notice is that the importer had suppressed/under declared the value of the goods pertaining to 22 past Bill of Entry and the basis of the said allegation is retrieval of some excel sheets from the email of the appellant through his mobile phone. The said excel sheets have been alleged as parallel invoices showing much higher value of the imported goods than what has been declared by the appellant in the Bills of Entry filed during the period from 16.09.2013 to 27.09.2017. Differential duty demand has been confirmed based on re-determinate of value by the department. This entire investigation got initiated based on the live consignment of Bills of Entry No. 3819893 dated 31.10.2017 being intercepted by SIIB and 1009 examined noticing undervaluation mis-declaratiion and even violation of Intellectual Property Rights (IPR). Though a separate Show Cause Notice was issued about said Bills of Entry. There are no proof from appellant to falsify invoices retrieved showing item details deposits adjusted and also the actual cartons loaded compared with cartons shown in BL and to prove that there invoices have no relation to the invoices filed by the appellant-importer with Bills of Entry. It has already been observed as admitted fact that details of both set of invoices (retrieved and those filed with Bills of Entry) have absolute similarity vis- -vis all details of the impugned imported goods except the values have been reduced and goods are declared as unbranded - the excel sheets/invoices retrieved to not need certificate of authenticity. Hence the argument of appellant for setting aside the demand for want of said certificate is not sustainable. It is also found that it cannot be a mere coincidence that the invoice number date container number description of goods number of carton and quantity of goods mentioned in the invoices/documents recovered through e-mail matches with the invoices attached by the importer with Bills of Entry filed for customs clearance. Hence there is sufficient evidence against appellant that the actual invoices have been altered by the appellant to undervalue and mis-declared the imported goods. The act amounts to committing fraud and fraud vitiates everything. Resultantly there is no infirmity in the findings to this effect in order under challenge. Invocation of extended period of limitation - HELD THAT - It is established that the importer has manipulated the invoice presented for clearance of goods and mis declared the value in the Bill of entry by suppressing the actual invoice which could only be unearthed during investigation. The mis-declaration of value of imported goods is thus apparent and has been done with clear intent to evade customs duty. The importer has violated provisions of Section 17(1) and Section 46 of the Customs Act 1962 by not filing truthful declarations in Bills of Entry and proper self-assessment. Therefore for the aforesaid acts of suppression of facts and mis- statement the extended period of five years for demand of customs duty under sub-section 4 of Section 28 of the Customs Act 1962 is invokable in this case. The importer is liable to pay differential duty of Rs.2, 54, 09, 167/- under Section 28(4) along with applicable interest under section 28AA of the Customs Act 1962. The contention of importer that BEs once assessed cannot be re- assessed is not tenable as demand of duty short paid can always be made under section 28 within the period of limitation prescribed therein. The data retrieved from the appellant s proprietor s own mobile is the document admissible into evidence. The requirement of certificate under Section 138C as is impressed upon by the appellant is held not applicable - No infirmity has been found in the manner of redetermining the value and the quantum thereof. Appeal dismissed.

Summary

Issues Involved:
1. Admissibility of electronic evidence under Section 138C of the Customs Act.
2. Compliance with Customs Valuation Rules, 2007.
3. Allegations of undervaluation and mis-declaration of imported goods.
4. Invocation of extended period for demand of customs duty under Section 28(4) of the Customs Act.
5. Amendment of documents under Section 149 of the Customs Act.

Issue-wise Detailed Analysis:

1. Admissibility of Electronic Evidence under Section 138C of the Customs Act:

The appellant argued that the electronic evidence, specifically the excel sheets retrieved from the appellant's email, was inadmissible due to non-compliance with Section 138C of the Customs Act, which mandates a certificate for the admissibility of computer printouts. The tribunal examined Section 138C and referenced Section 65B of the Indian Evidence Act, which deals with the admissibility of electronic records. The tribunal cited the Supreme Court's decision in Arjun Panditrao Khotkar v. Kailash Kishanrao Goratyal, which clarified that a certificate under Section 65B(4) is mandatory for secondary copies of electronic records but not for original electronic records. Since the excel sheets were retrieved directly from the appellant's mobile phone, they were considered original documents, and the requirement for a certificate was deemed unnecessary. Therefore, the tribunal held that the electronic evidence was admissible.

2. Compliance with Customs Valuation Rules, 2007:

The appellant contended that the department's reliance on the excel sheets to re-determine the transaction value was misplaced and that the declared transaction value should be accepted unless exceptions under Rule 3 of the Customs Valuation Rules, 2007, were attracted. The tribunal noted that the excel sheets retrieved from the appellant's email contained detailed information about the imported goods, including invoice numbers, dates, container numbers, descriptions, quantities, and values in Chinese currency (RMB). These details matched the invoices filed with the Bills of Entry, except for the values, which were significantly lower. The tribunal concluded that the department had sufficient evidence to reject the declared transaction value and re-determine it based on the retrieved excel sheets.

3. Allegations of Undervaluation and Mis-declaration of Imported Goods:

The department alleged that the appellant had undervalued and mis-declared the imported goods by using fake and manipulated invoices. The tribunal observed that the retrieved excel sheets, which were titled as invoices and prepared on the supplier's letterhead, contained accurate details of the imported goods, including the actual values, which were higher than the declared values. The tribunal found that the appellant had intentionally manipulated the invoices to evade customs duty. The tribunal upheld the department's findings and confirmed the differential duty demand based on the re-determined values.

4. Invocation of Extended Period for Demand of Customs Duty under Section 28(4) of the Customs Act:

The department invoked the extended period of five years for demanding customs duty under Section 28(4) of the Customs Act, citing suppression of facts and mis-declaration by the appellant. The tribunal noted that the appellant had manipulated the invoices and suppressed the actual values of the imported goods, which could only be unearthed during the investigation. The tribunal held that the extended period was justifiably invoked due to the appellant's intent to evade customs duty and upheld the differential duty demand along with applicable interest.

5. Amendment of Documents under Section 149 of the Customs Act:

The appellant argued that once the Bills of Entry were assessed, they could not be re-assessed. The tribunal referred to Section 149 of the Customs Act, which allows for the amendment of documents based on documentary evidence that existed at the time of clearance. The tribunal noted that the retrieved excel sheets, which were in existence at the time of clearance, provided sufficient evidence for amending the Bills of Entry. Therefore, the tribunal rejected the appellant's contention and upheld the department's actions.

Conclusion:

The tribunal dismissed the appeal, upheld the admissibility of the electronic evidence, confirmed the re-determined values of the imported goods, justified the invocation of the extended period for demand of customs duty, and allowed the amendment of the Bills of Entry based on the retrieved excel sheets. The order under challenge was upheld, and the appeal was dismissed.