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2017 (5) TMI 1336 - AT - Central ExciseLevy of duty and penalty - clandestine manufacture and removal - issuance of parallel invoices - Held that: - no search have been carried out in the premises of M/s SCL. All the documents, pen drive, computer hard disc, etc. on the basis of which demand had been raised, were recovered from the factory & office of M/s PPPL. The proposed demand had been mainly confirmed on the ground that the Director of appellant-M/s SCL have admitted the fact of clandestine removal, to M/s PPPL. The case of the Revenue is based solely on the basis of third-party records which are mainly the computer printouts. No evidence have been brought on record by Revenue in terms of Section 36B (2) of the Central Excise Act, which requires that for admissibility of data obtained from microfilms, computer printouts, etc., satisfaction have to be recorded. Revenue have failed to establish certain fundamental criteria for the allegation of clandestine removal, as there is no tangible evidence of clandestine manufacture by these appellants, and the whole demand is based on mere assumptions and presumptions. There is no investigation with respect to usage of unaccounted or excess raw materials, discovery of any finished goods outside the factory, use of electricity far in excess than what is necessary for manufacture of goods, otherwise manufactured and validly cleared on payment of duty, proof of actual transportation of goods etc. Inferences cannot be drawn about such clearances merely on the basis of notebooks, diaries privately maintained or some computer data recovered from pen drives not maintained in the ordinary course of business. Further, the impugned orders are vitiated for not giving opportunity of cross-examination, including examination of the witnesses of the Revenue. The demand being mainly based on some private records, etc., maintained by third party - M/s Panchwati Prayogshala for their internal control cannot be the sole basis for raising demand against M/s SCL - the demand is not sustainable against M/s SCL - appeal allowed. So far M/s Panchwati Prayogshala Private Limited & its Director Mr. Pankaj Goel are concerned, the matter been settled before the Settlement Commission, as noticed hereinabove and accordingly I set aside the penalties. Appeal allowed - decided in favor of appellant.
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