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2024 (3) TMI 1037 - CESTAT KOLKATAClandestine manufacture and removal - 47658 M.T. of Pig Iron - demand worked out based on the details available in the computer print-out recovered from the premises of the Appellants office and premises associated with them and the statements recorded from the concerned persons - evidentiary value of the computer print-outs - admissible evidences or not - procedure as set out in Section 9D of the Central Excise Act, 1944 was followed in this case or not - reliability of statements recorded under Section 14 of the Central Excise Act, 1944 - penalty on the Appellant companies and it's Director, on the basis of the evidences available on record. Whether the computer printouts taken from the pen drives recovered during the search can be relied upon as evidence to demand duty? - Whether the conditions mentioned in Section 36B has been followed in this case or not, to rely upon the computer printouts as evidence? - HELD THAT:- The procedure prescribed in Section 36B must be followed to rely on the computer sheets as evidence. It is observed that the department has not followed the procedure prescribed in Section 36B. The author of the entries made in the computer has not been identified. The certificate as prescribed under Section 36B(4) has not been obtained. Hence, the computer sheets recovered from the pen drives cannot be relied upon to arrive at clandestine clearance - As the department has not followed the mandate under section 36B, the data recovered from the print outs available in the computer sheets cannot be relied upon to work out the duty liability on the allegation of clandestine removal. Accordingly, the answer to the question are in the negative. Whether the procedure as set out in Section 9D of the Central Excise Act, 1944 was followed in this case or not? - If not followed, then whether the statements recorded under Section 14 of the Central Excise Act, 1944 can be relied upon to demand duty? - HELD THAT:- The adjudicating authority has not followed the procedure prescribed under Section 9D, accordingly, the statements cannot be relied upon to confirm the demands. Thus, the answer to question is in the negative. Whether the demands confirmed in the impugned order on clandestine clearance of finished goods is sustainable in the absence of any evidence of procurement of the major raw materials or sale of the finished goods clandestinely? - HELD THAT:- There is no evidence of clandestine removal, purchase and consumption of unaccounted raw materials, discrepancy between recorded stock and physical stock, seizure of any goods, consumption of excess electricity, actual clandestine removal of finished goods without payment of duty, mode of removal, evidence of transporters and buyers of the clandestinely removed goods and flow back of funds pertaining to clandestine removals have been brought on record in this case. Without having any such tangible evidence, clandestine manufacture and clearance of goods cannot be sustained on the basis of mere assumptions and presumptions. Accordingly, the demand confirmed in the impugned order is not sustainable. Thus, the answer to question is in the negative. Whether penalty is imposable on the Appellant company and it's Director, on the basis of the evidences available on record? - HELD THAT:- The allegation of clandestine removal against the appellant-company is not sustainable. Accordingly, the role of Director of the appellant-company in the alleged clandestine clearance is not established. It is also observed that no benefit of the alleged illegal activities have accrued to the Director. Therefore, the penalty imposed on the Director of the appellant under Rule 26 of the Central Excise Rules, 2002 is not sustainable and the same is set aside. Thus, the answer is in the negative. The demand of duty confirmed in the impugned order is not sustainable. The demand of interest and penalty imposed on the Appellants are also not sustainable - Appeal allowed.
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