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2024 (5) TMI 143 - CESTAT BANGALORELevy of Penalty u/s 112 (a) and (b) and 114AA of the Customs Act, 1962 - Abetment in mis-declaration of goods and evasion of duty - imported items declaring them as sunglasses but on investigation, it was found to be readymade garments - Dummy IECS - The appellants were accused of being involved in a scheme using dummy Import Export Codes (IECs) - Stolen identity - Documents of ‘H-cardholder’ working for the Customs House Agent (CHA) used for carrying out illegal importation of goods - Denial of cross-examination of witnesses - violation of natural justice - Difference Of Opinion between learned members - Third Member Order - Whether the evidence relied by the adjudicating authority regarding the WhatsApp messages retrieved during investigation can be considered as admissible evidence in view of the provisions u/s 138(c) of the Customs Act, 1962 read with Section 65(B) of the Evidence Act, 1872. Whether the confession statement of first appellant u/s 108 of the Customs Act, 1962 which stood retracted is substantially corroborated by other independent and cogent evidences to sustain the allegation against first appellant. Whether the findings of the adjudicating authority regarding role of second appellant in illegal import is sustainable considering the fact that during investigation, in spite of appearing before the investigating officer, no statement is recorded from the second appellant u/s 108 of the Customs Ac, 1962. ORDER [Per : Ms. Sulekha Beevi. C.S] - HELD THAT:- Undisputedly, the WhatsApp messages have not been retrieved by complying the provisions of Section 138C of the Customs Act, 1962. The Tribunal in the case of Commissioner of Customs, Lucknow Vs Sanjay Soni [2022 (3) TMI 367 - CESTAT ALLAHABAD] had occasion to consider the admissibility of evidence in the nature of WhatsApp messages. It was held that messages retrieved from phone is not reliable or admissible in evidence if provisions of Section 138C of Customs Act, 1962 are not complied. Section 138C is pari materia to Section 36B of Central Excise Act, 1944. While analysing the issue of admissibility of evidence retrieved from electronic items, the Hon’ble Supreme Court in the case of Anwar PV Vs P.K. Basheer & Others [2014 (9) TMI 1007 - SUPREME COURT] had held that the compliance of conditions in Section 138C is mandatory. Similar view was taken in the case of S.N. Agrotech Vs Commissioner of Customs, [2018 (4) TMI 856 - CESTAT NEW DELHI]. In a recent decision, the Mumbai Bench of the Tribunal in the case of M/s. Jeen Bhavani International Vs CC,[2022 (8) TMI 237 - CESTAT MUMBAI] had occasion to analyse similar issue and held that without complying with conditions of Section 138C of Customs Act, 1962, the contents retrieved from electronic items are not admissible in evidence. The evidence in the nature WhatsApp retrieved from phones cannot be considered in evidence without complying the provisions u/s 138C. The law contained in Section 36B of Central Excise Act, 1944, as well as Section 138C of Customs Act, 1962 are safeguards against arbitrary actions for the reason that it is very easy to fabricate or tamper with material contained in electronic items. Though the statement recorded before the Customs Officer may be admissible in evidence, it has to be noted that in the present case all the noticees have retracted their statements at the earliest. Further, the statement of Sahil Moiz Zafar was not recorded at all. Even though he is a co-noticee the said appellant has been implicated on the basis of call records and the statement of other noticees. When the noticees have retracted their statement it was incumbent upon the adjudicating authority to allow cross examination when requested for by the appellants. The rejection of the request for cross examination has caused prejudice to the appellants as they were not able to bring out the credibility of the witnesses and statements recorded before Customs Officers. The evidence in the nature of WhatsApp messages, call records cannot be relied in evidence unless the conditions u/s 138C of Customs Act, 1962 are followed. So also, the denial of cross examination has taken away the right from the appellant to establish their defence. Therefore, there is no independent corroborative evidence. In absence of independent corroborative evidence, the statement which has been retracted cannot be the sole basis to sustain the penalties against either of the appellants. It has to be noted that in spite of appearing before the investigating officer no statement was recorded from him. The statement of the co-noticees having been retracted and cross examination of all other witnesses been denied, there is absolutely no evidence to uphold the confirmation of penalty on second appellant. Thus, I agree with all the four points of difference as recorded by Member (Judicial). Per R. BHAGYA DEVI : - Penalties imposed on Shri Dharaneesh Raju Shetty and Shri Shail Moiz Zafar is upheld. Accordingly, the impugned order is upheld and the appeals are dismissed. Per: P. A. AUGUSTIAN - No presumption can be drawn that evidences brought on record by way of confession which stood retracted is substantially corroborated by other independent and cogent evidences. Thus, appeals are allowed. Penalty imposed on appellants are set aside. MAJORITY ORDER - In view of the majority opinion, the penalties imposed on the appellants are set aside. Consequently, the impugned order is set aside and the appeals are allowed.
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