In a pivotal ruling for customs investigations, the Supreme Court of India has simplified the use of electronic evidence, holding that computer printouts seized during raids can be admitted without a formal certificate under Section 138C(4) of the Customs Act, 1962, if assessees acknowledge their contents in statements recorded under Section 108. The decision, delivered on August 20, 2025, by Justices J.B. Pardiwala and K.V. Viswanathan, overturns a Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) order and strengthens the Directorate of Revenue Intelligence (DRI)’s ability to tackle duty evasion cases reliant on digital records.
Case Background: A ₹9.34 Crore Duty Evasion Dispute
The case, Additional Director General (Adjudication), Directorate of Revenue Intelligence vs. Suresh Kumar and Co. Impex Pvt. Ltd. & Ors. (2025 INSC 1050), arose from allegations that the respondent company, an importer of branded food items, evaded customs duties exceeding ₹9.34 crores by under-declaring the Retail Sale Price (RSP) or Maximum Retail Price (MRP) on import documents. On June 16, 2015, DRI officials raided the company’s office-cum-godown in Delhi and the residential premises of its directors, seizing electronic devices including laptops, hard drives, an iPad, and an iPhone. Printouts from these devices, extracted under Records of Proceedings (ROPs) dated July 6, 2015, July 21, 2015, and April 21, 2016, revealed discrepancies in declared prices.
A show-cause notice issued on June 6, 2016, demanded differential duties of ₹9,24,50,644/- from the company and ₹9,83,614/- from another respondent, alongside interest, penalties, and potential confiscation of goods. The Adjudicating Authority’s Order-in-Original (July 17, 2017) upheld these demands, but CESTAT, on April 17, 2018, quashed the order, citing non-compliance with Section 138C(4), which requires a certificate to authenticate electronic records, akin to Section 65B(4) of the Indian Evidence Act, 1872.
Supreme Court’s Ruling: Flexibility in Certification
The Supreme Court, hearing the DRI’s appeal, rejected CESTAT’s strict interpretation. The bench ruled that “due compliance” with Section 138C(4) does not necessitate a standalone certificate in the prescribed format if other documents, such as ROPs and unretracted Section 108 statements, authenticate the evidence. The assessees, including directors Nikhil Asrani and Aseem Asrani, had signed the ROPs (covering 437 pages of printouts) and confirmed their authenticity in statements recorded between August 2015 and May 2016, without ever retracting them.
“When we say due compliance, the same should not mean that a particular certificate stricto senso in accordance with Section 138C(4) must necessarily be on record. The various documents on record in the form of record of proceedings and the statements recorded under Section 108 of the Act, 1962 could be said to be due compliance of Section 138C(4) of the Act, 1962,” the Court stated (para 43).
The Court drew on Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal (2020) 7 SCC 1, applying the Latin maxims impotentia excusat legem (inability excuses the law) and lex non cogit ad impossibilia (the law does not compel the impossible) to support a pragmatic approach. It clarified that while Section 138C(4) is mandatory, substantial compliance through assessees’ acknowledgments suffices. The Court also cited Kum. Shubha @ Shubhashankar vs. State of Karnataka (2025 SCC Online SC 1426), noting that a certificate’s format is not sacrosanct if authenticity is undisputed.
Importantly, the Court distinguished between admissibility and evidentiary value, stating that Section 108 statements’ broader weight must comply with Section 138B (concerning presumptions from statements). The CESTAT’s order was set aside, and the case was remanded for rehearing on merits, excluding the Section 138C(4) issue.
Legal Arguments and Context
Senior Advocate Nisha Bagchi, representing the DRI, argued that the assessees’ signatures on ROPs and unretracted statements constituted sufficient compliance, emphasizing the transparency of the seizure process. Advocate Ashish Batra, for the respondents, contended that strict adherence to Section 138C(4) was essential to ensure evidence integrity, but the Court found the existing documentation adequate.
The ruling builds on Anvar P.V. v. P.K. Basheer (2014) 10 SCC 473, which mandated certificates for electronic evidence, but aligns with Arjun Panditrao Khotkar’s flexibility in cases where compliance is impractical. The Court’s focus on non-retracted statements and signed ROPs underscores the importance of contemporaneous assessees’ acknowledgment.
Case Details: Additional Director General (Adjudication), Directorate of Revenue Intelligence vs. Suresh Kumar and Co. Impex Pvt. Ltd. & Ors. (2025 INSC 1050)
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