Unauthenticated Foreign Authority Documents Can't Be Conclusive Proof In Customs Proceedings: CESTAT Chandigarh

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh has set aside a ₹4.95 crore customs duty demand against Findoc Impex, holding that unauthenticated documents allegedly obtained from the UAE Customs authorities could not, by themselves, establish that dry dates imported into India were of Pakistani origin.

Emphasising that the burden rested on the Revenue to prove its allegations, the tribunal observed, "It is not for the appellant to disprove the allegations of the department. It is for the revenue to prove all the allegations with reasonable proof."

A bench of Judicial Member S.S. Garg and Technical Member P. Anjani Kumar also set aside the penalty imposed on the firm's partner, Vaneet Gupta. It partly allowed the connected appeal filed by TRB International.

The tribunal further observed, "Without solid supporting evidence, these reports are treated merely as a starting point for an investigation, not as final proof of a violation. However, when foreign authorities provide a specific, verified investigative report, backed by strong, independent facts and completely corroborated, the evidence becomes reliable and admissible. In the instant case, we find that the documents are not authenticated."

The Directorate of Revenue Intelligence (DRI) investigated dry date imports made by Findoc Impex in January 2020.

According to the department, consignments declared to be of Saudi Arabian origin had actually originated in Pakistan and were routed through Dubai to avoid the 200% Basic Customs Duty applicable to Pakistani imports.

Following the overseas inquiry, the Department issued a show cause notice demanding ₹4.95 crore in customs duty. It also proposed confiscation of the goods and penalties.

The Commissioner of Customs confirmed the demand, prompting the appeals before CESTAT.

Before the tribunal, the appellants argued that the Department's case rested entirely on unsigned and unauthenticated transshipment documents allegedly obtained from UAE Customs.

They contended that the documents carried no authentication from the foreign customs authorities, did not satisfy the statutory requirements governing the admissibility of electronic records under the Customs Act, and were not backed by the correspondence through which they were allegedly obtained. The appellants also pointed to discrepancies in container numbers and other shipment details relied upon by the Department.

The Revenue, in response, maintained that the documents had been obtained through official channels from the Federal Customs Authority, UAE, under a cover letter.

It argued that matching container details, seal numbers, and shipment particulars showed the goods had originated in Pakistan before being transshipped through Jebel Ali and that the importers had deliberately misdeclared the country of origin to evade customs duty.

Rejecting the department's case, the tribunal ruled that it was for the revenue to establish the allegations with reasonable proof. It noted that the appellants had specifically questioned the authenticity of the overseas documents, while the Department failed to establish their authenticity.

The tribunal also observed that it was not the Department's case that the procedure prescribed under Sections 138 and 139 of the Customs Act had been followed for the electronic records relied upon.

The tribunal also reviewed earlier decisions on the evidentiary value of reports received through the Customs Overseas Intelligence Network (COIN). It observed that unauthenticated foreign documents may trigger an investigation but cannot, without proper authentication and corroboration, be treated as conclusive proof against an importer. Verified investigative reports supported by independent evidence, it added, stand on a different footing.

The tribunal accordingly allowed Findoc Impex's appeal, setting aside the customs duty demand, confiscation, and penalties.

It also allowed Vaneet Gupta's appeal.

In TRB International's connected appeal, the tribunal modified the Commissioner's order. It permitted redemption of certain seized goods on payment of a redemption fine of ₹5 lakh, subject to production of the required phytosanitary certificate, while setting aside the remaining findings on customs duty, confiscation, and penalties.

For Findoc Impex and Vaneet Gupta: Advocates Saurabh Kapoor, Muskaan Gupta and Tanya Kumar,

For TRB International: Advocates Naveen Bindal and Bharat Jain,

For Revenue: Naman Jain, Senior Standing Counsel, and Ms. Vaishali Jain, Authorized Representative