Legal principle

A declared transaction value may be rejected under Rule 12 of the Customs Valuation Rules, 2007 and re-determined sequentially under Rules 4–9, because voluntary Section 108 statements to Customs officers (who are not police officers) are substantive evidence, and an original electronic record from the importer's own laptop is admissible without a Section 65B(4) certificate.

Court decision

The Tribunal upheld the impugned Order-in-Original in full: it held the Section 108 statements admissible as voluntary admissions of the allegations, the laptop data to be original/primary electronic evidence requiring no Section 65B(4) certificate, the rejection of the declared transaction value under Rule 12 as justified, and the re-determination as correctly made following Rules 4–9 of the Valuation Rules sequentially. The appeal was dismissed.

Facts

M/s Kusum Overseas (proprietor Shri Gagan Vohra) imported food items through ICD Tughlakabad, and DRI received information that the firm was mis-declaring the value and RSP of these imports. A search on 05.05.2016 of the business premises, godown and the proprietor's residence yielded a Dell laptop, incriminating documents and seized goods, and Section 108 statements were recorded in which the appellant admitted under-invoicing, mis-declaration of MRP, duty evasion of around 70–80%, and payment of the balance to suppliers, while depositing Rs. 30,00,000 towards differential duty. The department issued SCN No. 21/2016 dated 04.11.2016 proposing rejection of the declared assessable value, its re-determination at Rs. 16,82,41,741 under Section 14 of the Customs Act, 1962 read with the Customs Valuation Rules, 2007, recovery of differential duty of Rs. 49,74,457 with interest, confiscation under Section 111(m), appropriation of the Rs. 30 lakh deposit, and penalty under Section 114A. These proposals were confirmed by Order-in-Original No. 17/2017-18 dated 26.03.2018, against which the appellant appealed to the Tribunal.

Key provisions

• Section 108, Customs Act, 1962 — Power to summon persons to give evidence and produce documents
• Section 14, Customs Act, 1962 — Valuation of goods
• Section 138B, Customs Act, 1962 — Relevancy of statements under certain circumstances
• Section 3(2), Customs Tariff Act, 1975 — Levy of additional duty equal to excise duty, sales tax, local taxes and other charges
• Section 111(m), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 138, Customs Act, 1962 — Offences to be tried summarily
• Rule 12, Customs Valuation (Determination of value of Imported goods) Rules, 2007 — Rejection of declared value
• Section 114A, Customs Act, 1962 — Penalty for short-levy or non-levy of duty in certain cases