Summary
CESTAT set aside a customs duty demand founded on computer printouts taken from the importers' seized devices because no certificate under Section 138C(4) of the Customs Act, 1962 accompanied them. The Supreme Court held that Section 138C(4) is pari materia with Section 65B(4) of the Evidence Act and, following Arjun Panditrao Khotkar, that due compliance depends on the facts: records of proceedings signed by the importers' directors and accountants recording the printouts taken in their presence, together with unretracted Section 108 statements acknowledging them, amounted to due compliance even without a certificate stricto sensu. The Tribunal's order was set aside and the appeals remanded for rehearing on other grounds.
Issues
- Whether the Tribunal erred in holding the computer printouts recovered from the respondents' electronic devices inadmissible for non-compliance with Section 138C(4) of the Customs Act, 1962.
- Whether records of proceedings signed by the respondents and their statements under Section 108 acknowledging the printouts amount to due compliance with Section 138C(4).
Provisions considered
- Section 138C(4), Customs Act, 1962Where a statement contained in computer printouts is to be given in evidence, a certificate identifying the document, giving particulars of the device and dealing with the conditions in sub-section (2), signed by a responsible person, is required. Held pari materia with Section 65B(4) of the Evidence Act; due compliance does not mean a certificate stricto sensu must be on record, and the signed records of proceedings and Section 108 statements constituted due compliance here. (¶¶ 8, 31, 32, 35, 43)
- Section 108, Customs Act, 1962Statements of the respondents' directors recorded under Section 108, acknowledging the records of proceedings and the authenticity of the printouts, were never retracted or disputed in reply to the show cause notice; they were relied on only for deciding compliance with Section 138C(4), their evidentiary value in other respects being left to be decided in accordance with law. (¶¶ 15, 22, 23, 24, 43, 44, 45)
- Section 138B, Customs Act, 1962The Tribunal had not decided the respondents' argument that witnesses were not examined as required by Section 138B; the evidentiary value of the Section 108 statements, including compliance with Section 138B, was left open for the Tribunal on remand. (¶¶ 9, 45, 48)
- Sections 65A and 65B, Indian Evidence Act, 1872Section 65B(4) is pari materia with Section 138C(4). In Arjun Panditrao Khotkar a three-Judge Bench held Section 65B(4) mandatory but, applying the maxims impotentia excusat legem and lex non cogit ad impossibilia, held that whether it has been duly complied with depends on the facts of each case. (¶¶ 33, 34, 35, 36, 37, 40, 41, 42)
- Section 130E, Customs Act, 1962The Revenue's statutory appeals against the CESTAT order were brought under this provision. (¶ 2)
Held
- Sub-section (4) of Section 138C makes it clear that where a statement in computer printouts is to be read in evidence, a certificate has to be obtained in accordance with clauses (a), (b) and (c); the provision is pari materia with Section 65B(4) of the Evidence Act. (¶¶ 32, 35)
- Though Section 65B(4) (and hence Section 138C(4)) is mandatory, Arjun Panditrao Khotkar, applying the maxims impotentia excusat legem and lex non cogit ad impossibilia, holds that how the provision is duly complied with depends on the facts of each case, and a party who has done everything possible to obtain a certificate from a third party beyond its control is relieved of the obligation. (¶¶ 37, 38, 39, 40, 41)
- The records of proceedings, signed by the respondents' directors and accountants, recorded that sealed hard disks were opened in their presence, printouts taken and signed by them as a token of authenticity, and the Section 108 statements acknowledged those printouts; these documents amount to due compliance with Section 138C(4). Due compliance does not mean that a particular certificate stricto sensu must necessarily be on record. (¶¶ 18, 19, 20, 21, 22, 43)
- The Section 108 statements were never retracted and their contents were not disputed even in reply to the show cause notice; this is relevant only to compliance with Section 138C(4), and the evidentiary value of those statements in other respects, including compliance with Section 138B, is to be considered in accordance with law. (¶¶ 44, 45)
- A certificate not given in the prescribed format is not per se invalid, especially where the authenticity of the documents is not in dispute (Kum. Shubha @ Shubhashankar referred to). (¶ 46)
- The Tribunal's order was set aside and the assessees' appeals restored for rehearing on grounds other than Section 138C(4); on remand the Tribunal is to decide the appeals on their own merits uninfluenced by the Court's observations, which are confined to Section 138C(4). (¶¶ 47, 48, 49)
Result
Appeals partly allowed; CESTAT judgment dated 17.04.2018 set aside; assessees' appeals restored to the Tribunal's file to be reheard on grounds other than Section 138C(4) of the Customs Act, 1962, on their own merits; pending applications disposed of.