2016 (1) TMI 390 - HC - Central Excise

Clandestine removal of goods - admissibility of computer print out as evidenced against the manufacturer during a raid, the Department had collected a USB device and print out of data contained therein were obtained. - The Tribunal observed that reliance on such material was impermissible in view of non-fulfilling the conditions contained in sub-section (2) of section 36-B of the Central Excise Rules. - Held that - the entire issue of establishing clandestine removal against the assessee is one of facts. Even with the aid of the contents of print out, the allegation could not have been sustained. As noted, cross-examination of random four witnesses was permitted, all of whom disowned their statements. There were little other evidence on record. Keeping the question of law suggested by the Revenue open, these tax appeals are, therefore, dismissed.

Summary

Issues:
1. Admissibility of computer print out as evidence in a case of clandestine removal of goods.
2. Validity of sustaining allegations based on material from print out without fulfilling statutory conditions.

Issue 1: Admissibility of computer print out as evidence:
The central issue in the case was the admissibility of a computer print out as evidence against the manufacturer in a case of alleged clandestine removal of goods. The Department had collected a USB device and obtained a print out of the data contained therein during a raid. The print out was presented before the authorities to support the allegation. The assessee requested cross-examination of the persons whose statements were recorded by the Department, and selective cross-examination of four witnesses was permitted. However, these witnesses disowned their statements. The Commissioner (Appeals) upheld the allegation based on the material from the print out. The Tribunal, in its judgment, ruled that reliance on such material was impermissible due to non-compliance with the conditions in sub-section (2) of section 36-B of the Central Excise Rules.

Issue 2: Validity of sustaining allegations based on print out material:
The Tribunal's decision was challenged by the Revenue in appeal, raising questions on the Tribunal's alleged errors of law. The Tribunal's judgment was based on the finding that the evidence from the print out did not meet the statutory conditions for admissibility. However, the High Court declined to delve into this question extensively, as the core issue of proving clandestine removal against the assessee was a matter of fact. Even with the contents of the print out, the allegation could not be substantiated, especially since the witnesses permitted for cross-examination disowned their statements. With little other evidence on record, the High Court dismissed the tax appeals, emphasizing the factual nature of the issue at hand and the insufficiency of evidence to support the allegations.

This detailed analysis of the judgment highlights the key legal issues, the arguments presented, and the court's reasoning in dismissing the appeals.