CESTAT Upholds Digital Trail: Excel Sheet from Assessee’s Gmail Deemed Valid Evidence Without Section 138C Certificate
Introduction
The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) clarified the evidentiary requirements for electronic documents under the Customs Act, 1962. The Tribunal held that an Excel sheet retrieved from the assessee’s own email account can be relied upon for determining the value of imported goods even without a certificate under Section 138C of the Act, as the section applies only to documents produced from computers other than those of the assessee.
Factual Background
The case concerns Royal Blankets, a proprietorship firm owned by Nitin Khandelwal, which was engaged in the import of goods. During the investigation, authorities found an Excel sheet in Nitin’s email account that contained details of import transactions by both Wide Impex and Royal Blankets. This discovery led to a deeper probe into the declared transaction values in various Bills of Entry filed by the assessee.
The investigating officers alleged that the declared transaction values were undervalued compared to the figures in the Excel sheet. The Commissioner treated the prices in the Excel sheet as Free on Board (FOB) values and determined the customs duty accordingly, resulting in a demand of ₹1,85,84,364 under Section 28(4) of the Customs Act, along with interest and penalties.
Procedural Background
A show cause notice was issued to the assessee proposing to reject the declared transaction values under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The Commissioner subsequently confirmed the demand of differential duty and imposed penalties. Aggrieved, the assessee filed an appeal before the CESTAT, New Delhi, challenging the reliance on the Excel sheet and the absence of a certificate under Section 138C of the Customs Act, 1962.
Issues
1. Whether an Excel sheet recovered from the assessee’s email account can be treated as admissible evidence without a certificate under Section 138C of the Customs Act, 1962.
2. Whether the Commissioner erred in treating the prices in the Excel sheet as FOB values instead of CIF values.
3. Whether the differential duty and penalties imposed on the assessee were justified.
Contentions of the Parties
Appellant (Assessee): The entire case was based on unsigned and unstamped Excel sheets recovered from the email of the proprietor. Since the Excel sheet was not accompanied by a Section 138C certificate, it could not be treated as reliable evidence. The authorities wrongly considered the prices in the Excel sheet as FOB values, inflating the duty demand.
Respondent (Department): The Excel sheet was accessed by Nitin Khandelwal himself, who opened his Gmail account in the presence of investigating officers, printed the document, and signed it voluntarily. The sheet reflected actual transaction values and undervaluation practices.
Section 138C was not applicable as the data originated from the assessee’s own email account and not from an external computer system.
Reasoning and Analysis
The Bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that Section 138C applies only when the information is printed from a computer other than that of the assessee. The Tribunal noted that the Excel sheet was located on the Gmail server and was accessed directly by Nitin Khandelwal using his own credentials in the presence of customs officers. He printed and signed the sheet, which demonstrated authenticity and voluntary production. The Bench emphasized that the only person capable of confirming whether the email was used for business during the relevant period was Nitin himself. His statement corroborated the genuineness of the document. Therefore, the absence of a Section 138C certificate did not invalidate the evidence. However, the Tribunal found that there was no justification for treating the prices in the Excel sheet as FOB values; they should instead be considered CIF values for customs assessment. The assessable value and differential duty were ordered to be re-determined accordingly. The Bench also set aside the demand for anti-dumping duty of ₹79,947, while partly allowing the appeal and upholding the penalty under Section 114AA.
Implications
This decision clarifies that Section 138C of the Customs Act is not rigidly applicable when documents originate from the assessee’s own electronic devices or accounts. The decision underscores a pragmatic approach to electronic evidence, acknowledging modern business realities where cloud storage and personal email servers are commonly used. By distinguishing between evidence from external systems and self-generated data, CESTAT has set an important precedent for cases involving digital evidence in customs investigations.
In this case the appellant was represented by Shri Gurdeep Singh and Shri Jaideep Ahuja, Advocates. Meanwhile the respondent was represented by Shri Nikhil Mohan Goyal, Advocate.