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TMI Blog2024 (6) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... made by various Courts and therefore it is held that none of the statement is admissible as an evidence against the appellant. Admissibility of WhatsApp messages as evidence u/s 138C of the Customs Act, 1962 - HELD THAT:- The exchanges of messages nowhere specifically mentions that the appellant is involved in misdeclaration of export consignment - the retrieval of the data from mobile phone of a person is as good as taking out data print out from a hard disk of a computer. Thus, the procedure laid down under Section 138C (supra) should have been followed. Since the procedure as mentioned above has not been followed by the Adjudicating Authority, it looses its evidentiary value. Thus, the statements and whatsapp messages on the basis of which the penalty has been imposed cannot be taken as an evidence against the appellant without following due legal procedure laid down under the Customs Act, 1962 - the impugned order-in-original, so far as imposition of personal penalty of Rs. 25 Lakh under Section 114(iii) of the Customs Act, 1962 is legally not sustainable and therefore, set aside - appeal allowed. - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. C.L. MAHAR, MEMBER (TECHNICAL) Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the subject export consignment liable for confiscation and therefore it was wrong on the part of the Adjudicating Authority to impose penalty on him only on the basis of statements given by certain persons which were retracted before the matter was adjudicated. 2.1 Learned advocate has submitted that it was only on the basis of statement dated 20.08.2015 and 26.08.2015 of Shri Nitesh Gangwani (H-Card holder of M/s. DP Logistics), it has been alleged that appellant abetted in an attempt to export mis-declared export consignment for availing monetary benefit in the form of availing undue duty drawback benefit. 2.3 After the issue of impugned show cause notice, the department has also initiated disciplinary proceedings against the appellant in accordance with Rule 14 of CCS (CCA) Rules, 1965. It has been submitted that before the Inquiry Officer, Shri Nitesh Gangwani had remained present. He was allowed to be examined by the Presenting Officer and then Shri Nitesh Gangwani was further put to cross-examine by the Defense Assistant of the appellant. Learned advocate submitted that in the Examination-in-Chief as well as cross-examination Shri Nitesh Gangwani has specifically denied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the export consignment. It has further been submitted that statement of owner of Customs House agent M/s. DP Logistics was recorded during the course of investigation and the CHA has nowhere named the appellant and there is nothing in the statement of the owner of CHA firm which can lead to inference that appellant was involved in the said scandal or he had any knowledge of misdeclaration. 2.7 During the course of departmental enquiry, the Preventive Officer Shri Jyoti Prakash was also examined and then cross-examined before the enquiry officer. From the cross-examination it is clear that the allegation which has been made in the impugned show cause notice that Shri Nitesh Gangwani offered bribe amount at the instance of Shri Arun Kumar (Appellant) has been found completely incorrect and wrong. At the end, it has been submitted by the learned advocate that since the appellant was not aware and involve in abetment of offence of misdeclaration of the export consignment therefore, imposition of penalty of Rs. 25 Lakh under the provisions of Section 114(iii) of the Customs Act, 1962 is legally not sustainable and requested that same need to be set-aside as the career and livelihood of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to consider the chat messages as evidence, requirements of section 138C (2) are required to be complied. It requires that the WhatsApp messages must be produced by a cell phone during the period in which it was regularly used to store or process WhatsApp messages by the person having lawful control over the cell phone; the WhatsApp messages were regularly supplied to the said cell phone; the cell phone was operating properly during the entire period when it received and sent the WhatsApp messages: and the WhatsApp messages are derived from the messages supplied to the cell phone in ordinary course of activity. As provided in Section 138C(4), if the WhatsApp messages are required to be used as evidence, a certificate certifying, identifying the WhatsApp messages and describing the manner in which it were produced; giving particulars of cell phone involved in production of the WhatsApp message to show that the WhatsApp message was produced by the cell phone, dealing with the matters of subsection (2), all the aforesaid conditions was required to be produced. However, as no such certificate is produced, even otherwise, the WhatsApp messages are not reliable as an evidence at all. Sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontacts having with Shri Sumit Valecha. Shri Arunkumar knew Sumit Valecha for the last 7 to 8 years. Shri Arunkumar had a meeting with Shri Valecha. In the said meeting Shri Arunkumar suggested the name of Shri Nitesh Gangwani for handling the work of Custom Broker who is known to him for 8 years. Shri Arunkumar also shared mobile number of Shri Nitesh Gangwani to Sumit Valecha for his contact. As per the statement of Shri Nitesh Gangwani dated 20.08.2015 Shri Arunkumar insisted upon him to file the Shipping Bills from Service Centre, Mundra only through Mis D.P. Logistics as against their routine practice of filing Shipping Bills from Ahmedabad office. Also as already discussed above Shri Arunkumar was in constant touch with Shri Sumit Valecha for collection of information for preparation of export documents by Nitesh Gangwani. As per the said whatsapp conversation Shri Arunkumar was receiving feedbacks from Shri Sumit Valecha ESTE Bout the dispatch and arrival of containers at Mundra Port from time to time. Shri Arunkumar also, as per the statement of Shri Nitesh Kumar dated 20.08.2015, advised him to change and declare price of goods at Rs. 240/- per piece against proposed rates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant have been penalized are not admissible as an evidence because the mandatory legal procedure as laid down in Section 138B of the Customs Act 1962 has not been followed by the Adjudicating Authority. It will be relevant to have a glance at the provisions of Section 138B of the Customs Act, 1962 which reads as under:- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 7 . As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17-3-2005 [2005 (187) E.L.T. A33 (S.C.)] was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, for cross-examination, can arise. 22 . Clearly, if this procedure, which is statutorily prescribed by plenary Parliamentary legislation, is not followed, it has to be regarded, that the Revenue has given up the said witnesses, so that the reliance by the CCE, on the said statements, has to be regarded as misguided, and the said statements have to be eschewed from consideration, as they would not be relevant for proving the truth of the contents thereof. 23 . Reliance may also usefully be placed on Para 16 of the judgment of the Allahabad High Court in C.C.E. v. Parmarth Iron Pvt Ltd., 2010 (260) E.L.T. 514 (All.), which, too, unequivocally expound the law thus : If the Revenue choose (sic chose?) not to examine any witnesses in adjudication, their statements cannot be considered as evidence. 24 . That adjudicating authorities are bound by the general principles of evidence, stands affirmed in the judgment of the Supreme Court in C.C. v. Bussa Overseas Properties Ltd., 2007 (216) E.L.T. 659 (S.C.), which upheld the decision of the Tribunal in Bussa Overseas Properties Ltd. v C.C., 2001 (137) E.L.T. 637 (T). 25 . In the light of the above, respondent no. 2 is directed to adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor, 2000 (122) E.L.T. 641 (S.C.). 4.5 The learned advocate during the course of hearing submitted that examination in chief of Shri Jyoti Prakash and Shri Nitesh Gangwani which has taken place on 24.10.2019 and 26.09.2019 as well the cross-examination on the same date before the inquiry officer in a case of departmental proceedings initiated against the appellant, as per Rule 14(18) of CCS (CCA) Rules, 1965, the answer of questions 2 and 5 of cross-examination of Shri Jyoti Prakash, then Preventive Office Dock examination, Customs Mundra, are reproduced here below:- Q.2 Now please say whether Shri Nitesh Gangwani told you that he offered you the bribe amount at the instance of Shri Arun Kumar, then Superintendent, Customs, Mundra? Ans: No. Q.5 . Did Shri Arun Kumar, then Superintendent, Customs, Mundra ever approach you for any work relating to alleged attempted export of waste clothes by M/s. Dynamic International, Surat? Ans : No. Similarly, Shri Nitesh Gangwani during the course of examination in chief, answered the question No. 4 as follows:- Q.4 You are shown photocopy of your further statement dated 26.08.2013 recorded under section 108 of the Customs Act, 1962. Please go th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s admissible as an evidence against the appellant. 4.7 Now coming to the second evidence which has been adduced by the department for alleging that the appellant has been part of the conspiracy in the case of mis-declaration of export consignment is the whatsapp messages which are being exchanged between the appellant and Shri Nitesh Gangwani. The learned Adjudicating Authority has got certain portions of messages which are reproduced below:- We find that above exchanges of messages nowhere specifically mentions that the appellant is involved in misdeclaration of export consignment. 4.8 We also take note of the fact that Section 138C which is reproduced below, provides certain procedures for admissibility of computer print-out as an evidence:- 138C. Admissibility of micro films, facsimile copies of documents and computer print outs 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 mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled 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 evidence of electronic devices, shall be evidences of any matter stated in the certificate. In the present case, we find that the provisions of Section 138C of the Act were not complied with to use the computer printouts as evidence. The Ld. Counsel for the appellants submitted that there is a gross illegality committed during the retrieval of the electronic documents. It appears from the Panchnama and record of proceedings that the alleged date recovered from electronic documents, so seized, were copied in a hard disk in presence of one person and, thereafter, it was opened in front of other persons. It is noted that the certificate was not prepared during the seizure of the electronic devices, as required under the law. 9 . The investigation is normally started after collecting the intelligence/information from various sources. The investigating officers are procuring the evidences in the nature of documents, statements, etc., to establish the truth. During the evolution of technology, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition in relation to the operation of the relevant device. 16. It is further clarified that the person need only to state in the certificate that the same is to the best of his knowledge and belief. Most importantly, such a certificate must accompany the electronic record like computer printout, compact disc (CD), video compact disc (VCD), pen drive, etc., pertaining to which a statement is sought to be given in evidence, when the same is produced in evidence. All these safeguards are taken to ensure the source and authenticity, which are the two hallmarks pertaining to electronic record sought to be used as evidence. Electronic records being more susceptible to tampering, alteration, transposition, excision, etc., without such safeguards, the whole trial based on proof of electronic records can lead to travesty of justice. 17. Only if the electronic record, is duly produced in terms of Section 65B of the Evidence Act, would the question arise as to the genuineness thereof and in that situation, resort can be made to Section 45A - opinion of Examiner of Electronic Evidence. 18. The Evidence Act does not contemplate or permit the proof of an electronic record by oral evidence if r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nguage in the judgment of the Hon ble Supreme Court (supra), the said electronic documents cannot be relied upon by the Revenue for confirmation of differential duty on the appellant. In the present case, the main evidence on which, Revenue has sought to establish the case of undervaluation and misdeclaration of the imported goods is in the form of the computer printouts taken out from the laptops and other electronic devices seized from the residential premises of Shri Nikhil Asrani, Director in respect of which the requirement of Section 138C(2) has not been satisfied. On this ground, the impugned order suffers from uncurable error and hence, is liable to be set aside. 12 . The Ld. AR for Revenue relied upon the decision of the Tribunal in the case of M/s. Laxmi Enterprises (supra) in which the Tribunal upheld the charge of undervaluation and demand for differential duty. In the said decision, Tribunal overruled the objection of the appellant in connection with Section 138C, by holding that the documents printedout from laptop will be admissible as evidence in view of the fact that the truth of such documents stand admitted by the proprietor in his statement. We have gone through ..... X X X X Extracts X X X X X X X X Extracts X X X X
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