2026-VIL-930-CESTAT-ALH-CU
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CUSTOMS CESTAT Cases

Customs - Determination of Country of Origin – Rejection of Certificates of Origin without Verification from Exporting Country Authority - Whether Certificates of Origin issued by competent authorities of exporting countries can be rejected and the claimed country of origin can be disregarded without conducting proper verification from the issuing authorities of those countries and without evidence of fraudulent procurement of such certificates – HELD - The Certificates of Origin cannot be discarded or rejected without verification of their authenticity from the competent authorities of the exporting countries. When goods are accompanied by Certificates of Origin issued by the competent authorities of exporting countries, these certificates carry presumptive value as they are issued only after verification of the goods by those authorities. The proper procedure for verification is prescribed under Rule 6 of the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020, which requires the customs authorities to make a formal verification request to the Verification Authority of the exporting country when there is doubt regarding the genuineness or authenticity of the certificate. The tribunal observes that no such verification request has been placed on record in the present case - Since the only evidence relied upon to contradict the certificates is inadmissible electronic evidence without corroboration, the country of origin as certified in the valid Certificates of Origin must be accepted - The impugned order to the extent that it rejected the country of origin as declared in Certificates of Origin and concluded that goods were of Chinese origin without proper verification from exporting country authorities is set aside - Customs - Admissibility of Electronic Evidence – Computer Printouts from Hard Disk and Mobile Devices - Whether computer printouts obtained from seized electronic devices can be admitted as evidence in customs proceedings in the absence of a certificate issued under Section 138C(4) of the Customs Act, and whether such documents can be authenticated merely by the fact that the person involved signed the panchnama prepared by the revenue officers – HELD - Computer printouts from electronic devices are not admissible as evidence in customs proceedings without a proper certificate under Section 138C(4) of the Customs Act. Section 138C(4) prescribes a mandatory requirement that any electronic record must be accompanied by a certificate containing specific details about the device, the manner of production, and the conditions under which the computer was operated. The mere fact that the director signed a panchnama does not constitute compliance with this statutory requirement, nor does it authenticate the genuineness of the extracted documents. The signing of a panchnama in a separate room without the person's awareness of whether data was actually extracted does not satisfy the legal requirement for authentication. The oral evidence or panchnama signatures cannot substitute for the mandatory written certificate - The electronic devices were not produced before the adjudicating authority and therefore cannot be treated as primary evidence. Additionally, no independent enquiry was conducted from the persons mentioned in the alleged documents, making the printouts unreliable and unverified - The impugned order is set aside to the extent that it relied upon electronic evidence in the form of computer printouts and WhatsApp chats for establishing allegations against the importer - Valuation of Imported Goods – Application of Customs Valuation Rules to goods cleared for home consumption - Whether the Customs Valuation Rules, 2007 can be applied to determine or re-determine the value of goods that have already been cleared by customs for home consumption, and whether a proforma invoice can be used as the basis for enhancement of the declared value of imported goods – HELD - The Customs Valuation Rules, 2007 can be applied only to imported goods, and goods that have already been cleared by customs for home consumption cease to be imported goods. The definition of imported goods in Section 2(25) of the Customs Act clearly provides that goods brought from outside India remain as imported goods only till their clearance for home consumption. Once cleared by customs, they lose the character of imported goods and the valuation rules become inapplicable. Therefore, the re-determination of value of already-cleared goods cannot be justified - Furthermore, a proforma invoice is in the nature of a quotation or offer and does not constitute a valid basis for enhancement of value of imported goods. The proforma invoices relied upon were recovered from the hard disk in the absence of a valid certificate under Section 138C and are therefore inadmissible as evidence. Additionally, no evidence has been produced to show that the importer actually paid or was required to pay the higher value mentioned in the proforma invoices - The impugned order to the extent that it re-determined the declared value of goods already cleared for home consumption is set aside, and consequently, the differential duty demand based on such re-valuation is not sustainable - Admissibility of Statements – Voluntariness and Corroboration Requirement - Whether statements recorded under duress or coercion without proper procedural safeguards can be relied upon to support a demand of duty, and whether mere confession statements without independent corroborative evidence can form the basis of adjudication – HELD - The statements recorded under duress or coercion cannot be relied upon to support demands or penalties - The impugned order to the extent that it relied upon statements of the director without independent corroborative evidence and without addressing the issue of voluntariness and duress is set aside - Imposition of Penalty – Whether penalties can be imposed on company Directors when the main demand against the company has failed or when specific evidence of individual involvement of the officials is not brought on record – HELD - Since the main allegations against the importing company have not been sustained and the demand for duty is not maintainable, the imposition of penalty on the company under Section 114A is not justified. Furthermore, penalties on company officials cannot survive independently when the main case against the company fails, unless specific and independent evidence of individual involvement of such officials is brought on record. In the present case, no such independent evidence of individual involvement has been adduced against the Director. Mere role in signing documents or making statements when the underlying transaction is not established as fraudulent does not constitute sufficient evidence for imposing penalty on officials - The impugned order to the extent that it imposed penalties under Section 114A against the company and under Sections 112 and 114AA against the company Director is set aside.
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