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TMI Blog2022 (9) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 138C of the Act were not complied as regard use of printouts as evidence. From the facts of the case and the Panchnama prepared for opening up of hard disks and their mirror image, it is clear that the same were not undertaken in presence of any authorized person. The entire case is based upon the electronic documents as evidence. However no compliance with the provisions of Section 138C has been made to establish the truthfulness of neither the documents nor the seizure memo was made and neither the same was presented before adjudicating authority. Thus the evidence of electronic devices in the form of printouts cannot be relied upon as evidence. When the department conducted market survey and the persons were there witness, it was their duty to mention name of person on such Proforma invoice or to find such person from cross examination as the Appellant were not made present during market survey. The market survey was conducted in absence of Appellant and they could not be expected to name the person who has issued such Proforma invoice. When the revenue itself does not knows as to who has issued such Proforma invoice and there is no statements of makers of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. However, the value declared in the B/Es was objected to by the Customs authorities at the port of import. On objection, the importer had submitted documents to justify consideration of the declared value for the purpose of duty assessment. Statement of Shri Kapil Garg was recorded on 19.10.2010 and 22.10.2010. The importer s business premises was searched, by the jurisdictional Central Excise Officers, under Panchnama on 19.10.2010, in presence of Part time Accountant Shri Rajendra; records and import related papers, a pen drive and a hard disk of Shri Rajendra Mangal, two hard disks of computers in business premises and the stock of imported batteries lying at go down were also seized. Allegedly from the seized records, an invoice bearing LHI1010290001 dated 27.07.2010 issued by M/d Shenzhen Leoch Battery Technology having unit value of US$ 5.75 FOB and consignment value of 10000 batteries as FOB value of US $ 57500 and freight cost US$1200, was found. It was alleged that in case of Bill of Entry No. 785027 dated 10.08.2010 showing unit price of US$ 1.17, the invoice by the supplier showing per unit price of US$ 1.17 presented for clearance is fake and manipulated and the invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect the declared value on consignments covered by BE No. BE No. 803525 dated 25.08.2010 and 827979 dated 07.09.2010 and to re-determine and finally re-assess the same under Rule 3 (1) of the Customs Valuation (Determination of Value of imported goods) Rules 2007. It also demanded duty in respect of 62 other Bills of Entry. Out of said 62 BE s, it was proposed to reject the declared value under Rule 12 (1) of the Customs Valuation (Determination of value of imported goods) Rules, 2007 (for 46 imports imported affected on and onwards 10.10.2007) under Rule 10A of Customs Valuation (Determination of value of imported goods) Rules, 1988 (for 17 import affected prior to 10.10.2007) and to re-determine the same under Rule 3(1) of Customs Valuation (Determination of value of imported goods) Rules, 2007 (in 30 cases being actual transaction value), Rule 3(1) of Customs Valuation (Determination of value of imported goods) Rules, 1988 (in 16 cases being actual transaction value), Rule 5 of Customs Valuation (Determination of value of imported goods) Rules, 2007 (in 16 cases by applying method of valuation of similar goods). It was proposed to demand duty of Rs.3,46,78,022/- on 62 Bills of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onic record which is called as computer output, is subject to the satisfaction of the four conditions of Section 138C (2) and (4). None of the conditions has been complied with as no computer has been shown to have been used regularly for the purpose of any activity regularly carried on over that period by the person having lawful control over the use of that computer. There is no evidence of such regular use. Most importantly as required in terms of Section 138 C (4), there is no certificate. Even the hard disks were not opened in presence of the director or authorized person of the Appellant unit but by the officers themselves. The alleged printouts of the data from the pen drive and hard disks or from the alleged mirror images thereof were not taken under any Panchnama or in presence of Appellant. Even when they sought inspection of seized records, pen drive and hard disks, the Deputy Commissioner of Customs, SIIB, Nhava Sheva vide letter dated 04.11.2016 informed the Commissioner that the seized documents, hard disks and pen drive on the basis of which the show cause notice was issued are not traceable and cannot be produced for the Appellant s inspection nor for the perusal by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not reliable as the market survey was done in absence of any authorized person of the Appellant concern. The Appellant had sought cross examination of representative of M/s. Global Power Survey (I) Pvt Ltd. M/s Shivam Sales and M/s. Ratandeep Electronic and Electrical whose bills and proforma invoices were relied upon to show that the price of similar batteries in local market is much more. The adjudicating authority held that no specific names were specified in request and hence cross examination cannot be given. The adjudicating authority did not appreciate the fact that except name of Mr. Dipal Udeshi of M/s. Global Power Source (I) Pvt. Ltd on Proforma invoice in case of two other shops i.e. M/s. Shivam Sales and M/s. Ratandeep Electronic and Electricals the no name of person who issued such invoice was appearing. When the department has conducted market survey at their own and that too in absence of appellant, then it was their duty to mention name of person issuing such Proforma invoice. Instead now the department is denying cross examination on ground that the person name was not given. Neither the Appellant knows the shop owners nor was the market survey carried out in thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and above the Invoice price, no reliance can be placed on the said retracted statements. Reliance is placed upon judgments in case of Vinod Solanki v UOI- 2009 (233) ELT 157, Mohtesham Mohd Ismail v Special Director- 2007 (220) ELT 3, Fact Paper Mills Ltd v CCE 2014 (314) ELT 449, Commissioner Vs. Fact Paper Mill Ltd 2015 (322) ELT 283. 2.3. The Learned Counsel submitted that vide Final Order No. 50767-50678/2020 dated 14.09.2020 passed by CESTAT, Delhi in case of other Bills of Entry covered by the same investigation which were imported through ICD, Pithampur, the CESTAT after considering all the above aspects held that the alleged printouts or the data from the Hard Disks and Pen did not satisfy the requirements of Section 138C of the Customs Act 1962 and therefore cannot be relied upon. It also held that there was no correlation between the Bills of Entry and the alleged wire transfers and further there was no investigation or confirmation from the persons whose names appeared in the emails for wire transfer. The NIDB data was not comparable to the Appellant s goods. Thus the allegation on basis of electronic device and statement of Shri Kapil Garg are not sustainable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 41. 2.5. He submits that re-determination under Rule 5 in respect of imports made from Suqian Yongda Imp Exp Trade Co Ltd and Guangzhou NPP Power Co. Ltd is illegal as there is no evidence of any price other than the Invoice price or of any remittance over and above the Invoice Price even in alleged printouts. Yet the Show Cause Notice proposed to reject the transaction value by relying upon the alleged e-mail correspondence with local buyers and other documents allegedly recovered from the seized Hard Disks and Pen Drive. Since the basis for rejection of the Transaction value itself is bad in law, the re-determination of value is not sustainable. Without prejudice it is submitted that even otherwise, the comparison with stray imports involving small quantities of 10,000 to 50,000 per importer, is not justified considering that the Appellants imports are of Bulk quantity of over 6, 60,000 pieces from the said supplier. There is no evidence to show that quality of the alleged contemporary imports were comparable to the Appellants imports. The Ld. Counsel submitted that in view of above facts and submission the impugned order be set aside and the appeal be allowed as there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration office premises of Appellant importer. Panchnama dated 19.10.2010 was prepared in respect of recovery of document and hard disks said to be retrieved from the office computer and one pen drive and one hard disk from bag of Shri Rajendra Mangal, part time accountant. The hard disk seized from Shri Rajendra Mangal could not be opened and hence no printout was relied upon. The other two hard disks alleged to have been taken from the computers were opened by the officers themselves and mirror images were made and the printout of the same were relied upon. The Officers also recorded statement of Shri Kapil Garg on different dates and this has been made basis to allege under valuation. The demand of duty was confirmed for the period from 2006 to 2010 on the importation of 6 V and 12 V batteries on the ground of undervaluation. 5.1. The Appellant on the other hand has disputed the veracity as well as the authenticity of the evidences, collected through electronic devices on the ground that neither there is any seizure memo nor the mandatory provisions of Section 138C has been followed. Further that neither the hard disks and seized records were opened in presence of any authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icro films, facsimile copies of documents and computer printouts as documents and as evidence. (1) Notwithstanding anything contained in any other law for the time being in force, - (a) a micro film of a document or the reproduction of the image or images embodied in such micro film (whether enlarged or not); or (b) a facsimile copy of a document; or (c) a statement contained in a document and included in a printed material produced by a computer (hereinafter referred to as a computer printout ), if the conditions mentioned in sub-section (2) and the other provisions contained in this Section are satisfied in relation to the statement and the computer in question, shall be deemed to be also a document for the purposes of this Act and the rules made thereunder and shall be admissible in any proceedings thereunder, without further proof or production of the original, as evidence of any contents of the original or of any fact stated therein of which direct evidence would be admissible. (2) The conditions referred to in sub-section (1) in respect of a computer printout shall be the following, namely :- (a) the computer printout containing the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any of the matters to which the conditions mentioned in sub-section (2) relate, and purporting to be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities (whichever is appropriate) shall be evidence of any matter stated in the certificate; and for the purposes of this sub-section it shall be sufficient for a matter to be stated to the best of the knowledge and belief of the person stating it. (5) For the purposes of this section, - (a) information shall be taken to be supplied to a computer if it is supplied thereto in any appropriate form and whether it is so supplied directly or (with or without human intervention) by means of any appropriate equipment; (b) whether in the course of activities carried on by any official, information is supplied with a view to its being stored or processed for the purposes of those activities by a computer operated otherwise than in the course of those activities, that information, if duly supplied to that computer, shall be taken to be supplied to it in the course of those activities; (c) a document shall be taken to have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority and it was communicated that the same was not traceable. The same were not available for examination before adjudicating authority during adjudication proceedings. The entire case is based upon the electronic documents as evidence. However no compliance with the provisions of Section 138C has been made to establish the truthfulness of neither the documents nor the seizure memo was made and neither the same was presented before adjudicating authority. Thus the evidence of electronic devices in the form of printouts cannot be relied upon as evidence. In case of S.N. Agrotech Vs. CC 2018 (361) ELT 761 (SC), the Tribunal has placed reliance upon the Apex Court judgment in case of Anvar P.V. v. P.K. Basheer Others - (2014) 10 SCC 473 = 2017 (352) E.L.T. 416 and decision of Tribunal, in the case of Tele brands Pvt. Ltd. v. C.C. - 2016 (336) E.L.T. 97 holding as under : 8 . On close reading of Section 138C of the Act, 1962, it is seen that the Legislature had prescribed the detailed procedure to accept the computer printouts and other electronic devices as evidences. It has been stated that any proceedings under the Act, 1962, where it is desired to give a statement in ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Evidence Act, any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer shall be deemed to be a document only if the conditions mentioned under sub-section (2) are satisfied, without further proof or production of the original. 15. Under Section 65B(4) of the Evidence Act, if it is desired to give a statement in any proceedings pertaining to an electronic record, it is permissible provided the following conditions are satisfied : (a) There must be a certificate which identifies the electronic record containing the statement; (b) The certificate must describe the manner in which the electronic record was produced; (c) The certificate must furnish the particulars of the device involved in the production of that record; (d) The certificate must deal with the applicable conditions mentioned under Section 65B(2) of the Evidence Act; and (e) The certificate must be signed by a person occupying a responsible official position in relation to the operation of the relevant device. 16. It is further clarified that the person need only to state in the certific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to that electronic record, is inadmissible. 11. Upon perusal of the judgment of the Hon ble Supreme Court in the case of Anvar P.V. (supra), we note that the Apex Court has categorically laid down the law that unless the requirement of Section 65B of the Evidence Act is satisfied, such evidence cannot be admitted in any proceeding. We note that the Section 138C of the Customs Act is parimateria to Section 65B of the Evidence Act. Consequently, the evidence in the form of computer printouts, etc., recovered during the course of investigation can be admitted as in the present proceedings only subject to the satisfaction of the sub-section (2) of Section 138C. This refers to the certificate from a responsible person in relation to the operation of the relevant laptop/computer. After perusing the record of the case, we note that in respect of the electronic documents in the form of computer printouts from the seized laptops and other electronic devices have not been accompanied by a certificate as required by Section 138C(2) as above. In the absence of such certificate, in view of the unambiguous language in the judgment of the Hon ble Supreme Court (supra), the said electronic d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity had not followed the procedures prescribed under Section 138B of the Act, 1962. We have already observed that the demand of duty cannot be sustained, as the evidences as available for the alleged undervaluation cannot be accepted under the law, as per the mandates of Section 138C of the Act. Hence, there is no need to discuss the said issues, as raised by the appellants regarding consideration of the provisions of Section 138B ibid. 14. In view of the above discussions and analysis, we do not find any merits in the impugned order, in confirming the adjudged demands against the appellants. Therefore, the impugned order is set aside and the appeals filed by the appellants are allowed. 6. In view of above facts and judgment we are of the view that the printouts from electronic devices relied upon to make allegation against the Appellant and are not admissible as evidence. Similarly in case of Premier Instruments Controls Ltd v CCE 2005 (183) ELT 65, M/s Ambica Organics Vs. CC 2016 (334) ELT 97, M/s Agarvanshi Aluminium Ltd v CC 2014 (299) ELT 83 and M/s Sunrise Stainless Steel P. Ltd v CCE 2019 (12) TMI 280-CESTAT-AHD in absence of compliance to the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be undertaken on the basis of merely quotation of one battery. Further the same is not comparable as the Appellant has imported lakhs of batteries in bulk. From the quotations, it cannot be made out from the said Proforma invoice as to who the person who prepared was and as to how the price was arrived at. The market survey was conducted at the back of Appellant. Shri Kapil Garg in his statement before the investigating officer has stated that the market survey was wrong and that survey of comparable batteries has not been done. As the show cause notice placed reliance on market survey, the Appellant had requested for cross examination of representative of M/s Global Power Survey (I) Pvt. C-10, Satyam Shipping Centre, M.G. Road, Ghatkopar. East, Mumbai - 77, M/s Shivam Sales, Shop No. 2, Gr. Floor, Pahelvi Building, Lamington Road, Grant Road (East), Mumbai - 7, M/s. Ratandeep Electronic and Electrical who have given Performa invoice during market enquiry. The adjudicating authority rejected the request on the ground that no specific names were specified in request. We find that the Appellant had sought cross examination of representative of M/s. Global Power Survey (I) Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the SIIB had undertook investigation which included the market survey and chemical examination of battery. Though the Ld. AR has submitted that there is no evidence of such exercise, however we find from Page 163 and 165 of the Appeal papers that the SIIB conducted market survey and the Chemical Examiner; Nhava Sheva conducted Chemical examination of battery. The lead content was found to be 37% to 38%. The department thereafter enhanced the value from US $ 0.25 per piece to US $ 0.41 per piece. The Appellant accepted the valuation as they were incurring demurrage. We find that when the valuation, of the batteries in question was arrived at after testing and market survey, at 0.41 US $, rejection of declared price based on allegations of show cause notice in present appeal is not sustainable. Our views are also based upon judgment in Appellant s own casein case of import of batteries the declared value of 0.25 US $ was disputed by the department in reference to 6 Volt batteries in September 2005 and the same was enhanced based on the ground that the prices under contemporaneous imports were high. The enhancement was set aside vide Order-in-appeal dated 20.10.2005. The said order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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