WhatsApp Chats & Hard Disk Data Inadmissible Without S. 138C Certificate: CESTAT Quashes Rs. 10.22 Crore Customs Demand

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad Bench has set aside a customs duty demand of over Rs. 10.22 crore raised holding that electronic evidence such as WhatsApp chats, hard disk data and printouts obtained during investigation could not be relied upon in the absence of mandatory certification under Section 138C of the Customs Act. The bench of P. K. Choudhary (Judicial Member) and P. Anjani Kumar (Technical Member) emphasized that no conclusive evidence had been brought on record to establish that the imported CRSS coils were actually of Chinese origin. Once valid Certificates of Origin issued by competent authorities were produced, and their authenticity was never disproved through proper verification, the benefit of preferential duty could not be denied merely on suspicion. The dispute arose from allegations by the Directorate of Revenue Intelligence (DRI) that Uttam Steel Alloys Pvt. Ltd. had imported Cold Rolled Stainless Steel (CRSS) coils of Chinese origin through intermediary entities located in Malaysia, Hong Kong, Dubai and Indonesia to wrongly avail preferential customs duty benefits under Notification No. 46/2011-Cus. The department alleged that the importer used fake or manipulated Certificates of Origin (COO) to portray Chinese goods as originating from ASEAN countries and thereby evade anti-dumping duty, countervailing duty and other customs levies. The Commissioner of Customs, Noida had rejected the declared origin and transaction value of imported goods covered under 79 Bills of Entry and re-determined the value from ₹17.80 crore to ₹29.51 crore. Differential customs duty of ₹10.22 crore was confirmed along with equivalent penalty under Section 114A of the Customs Act. During investigation, DRI officers had searched the premises of the importer and seized electronic devices including a laptop, iPhone and hard disk. The department relied heavily upon WhatsApp chats, printouts of invoices and packing lists allegedly extracted from those devices, as well as statements recorded from the company’s director and a third party. Before the Tribunal, the appellants argued that the electronic evidence was inadmissible because the mandatory certificate prescribed under Section 138C(4) of the Customs Act and Section 65B of the Indian Evidence Act had not been furnished. It was also contended that the forensic extraction of data was not conducted in a transparent manner and the statements relied upon by the department were involuntary and uncorroborated. Accepting the importer’s contention, the Tribunal observed that Section 138C specifically prescribes the conditions for admissibility of computer printouts and electronic records in customs proceedings. The Bench held that when the statute requires a particular procedure to be followed, the same must be strictly complied with. The Tribunal noted that the required certificate under Section 138C(4) had admittedly not been produced by the department. Referring to the Supreme Court judgment in Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal and several tribunal precedents, the Bench held that electronic evidence without statutory certification cannot be treated as admissible evidence. CESTAT further held that the department failed to conduct independent verification from the authorities of exporting countries regarding the authenticity of Certificates of Origin. The Bench observed that the customs authorities could not disregard COO certificates without following the verification mechanism prescribed under the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020. The Bench ruled that reliance solely on proforma invoices allegedly recovered from hard disks was legally unsustainable. It observed that no evidence existed to show that the importer had made any extra payment over and above the declared transaction value. The department also failed to produce contemporaneous import data of identical or similar goods to justify enhancement of value. The Tribunal additionally observed that once imported goods had already been cleared for home consumption, they ceased to retain the character of “imported goods” under the Customs Act, and therefore the Customs Valuation Rules, 2007 could not subsequently be invoked to re-determine their value. The CESTAT held that the customs duty demand, denial of exemption benefits, re-determination of value and penalties imposed on the company and its directors were unsustainable in law. Case Details Case Title: M/s Uttam Steel Alloys Pvt. Ltd. Versus Commissioner of Customs, Noida Citation: JURISHOUR-1266-CES-2026(ALL) Case No.: Customs Appeal No.70027 of 2026 Date: 14.05.2026 Counsel For Appellant: Abhinav Kalra, Advocate & Shri Nishant Mishra, Advocate Counsel For Respondent: Santosh Kumar Authorized Representative Click Here To Read Order Read More: CESTAT Dismisses Service Tax Appeal Filed After 20-Month Delay, Calls Assessee’s Plea “Fraudulent Attempt”

WhatsApp Chats & Hard Disk Data Inadmissible Without S. 138C Certificate: CESTAT Quashes Rs. 10.22 Crore Customs Demand

Membership Required

Latest articles

When Are Credit Card Rewards Taxable? IRS Rules Explained for Cashback, Miles and Referral Bonuses

RBI Unveil Tax Exemptions to Attract Foreign Capital, Strengthen Rupee

Consumer Forums Have Jurisdiction Over Co-Operative Bank Deposit Disputes: Kerala High Court

Royalty Is Linked To Mineral Dispatch And Cannot Be Frozen By Contract: Supreme Court

More like this

When Are Credit Card Rewards Taxable? IRS Rules Explained for Cashback, Miles and Referral Bonuses

RBI Unveil Tax Exemptions to Attract Foreign Capital, Strengthen Rupee

Consumer Forums Have Jurisdiction Over Co-Operative Bank Deposit Disputes: Kerala High Court

About us

Company

Categories