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2019 (12) TMI 587 - AT - Central ExciseClandestine Removal - inputs - search and seizure in the factory premises - shortage of finished excisable goods - Computer printouts - third party documents - admissible evidence or not - Section 36B of Indian Evidence Act - time limitation - whether the search and seizure operation were made according to the provisions of Section 100 of the Cr.P.C. read with Section 18 of the Act or not? - HELD THAT:- The search and seizure proceedings are made in violation of Section 100 of Cr PC read with Section 18 of the Act, for the reason that department has failed to follow the provisions of Section 36-B of the Act. Also, at the time of sealing and desealing of the external data storage device as well as the time of obtaining printouts therefrom, a certificate should have been obtained as per the provision of Section 36-B of the Act. No such certificate has been brought on record without which the evidentiary value of these printout get vitiated. As no certificate from the responsible person of the Appellant was obtained by the department, the credibility of the computer printout gets vitiated. Hon’ble Apex Court in case of ANVAR P.V VERSUS P.K. BASHEER AND OTHERS [2014 (9) TMI 1007 - SUPREME COURT] has held that the computer printout can be admitted as evidence only if the same are produced in accordance with the provisions of Section 65B(2) of the Evidence Act. A certificate is also required to accompany the computer printouts as prescribed under Section 65B(4) of Evidence Act, 1972. It has been clearly laid down in para 15 of this judgment that all the safeguards, as prescribed in Section 65B(2) & (4), of the Act, is required to be met so as to ensure the source and authenticity, pertaining to electronic record sought to be used as evidence. Electronic records being more susceptible to tempering, alteration, transposition, excision etc. without such safeguards, the whole trial based on proof of electronic records can lead to travesty of justice. The provisions of Section 65B of Indian Evidence Act and Section 36B of Central Excise Act, 1944 of the Act are parimateria. The shortage was detected on the basis of eye estimation and also on average weight without physical weighment. The department failed to gather any of documents from the factory of the appellant or elsewhere. Further, the loose documents which were recovered from the residence of Shri Ravi Bhushan Lal were not put to test for ascertaining to the authorship of these documents. Moreover, these documents could not be proved with the corroborative evidences. The investigating authority failed to elucidate the system adopted for the preparation of the relied upon documents which were allegedly based on these documents. The details contained on the loose sheets and third party documents are actually not comprehensible and, therefore, cannot be accepted as admissible piece of evidence. The charges of clandestine removal of the goods cannot be upheld merely on assumptions and presumptions, but has to be proved with positive evidence such as purchase of excess raw materials, consumption of excess electricity, employment of extra labour, seizure of cash, transportation of clandestinely removed goods etc. - The shortage which was detected by the officers is based on average weight method basis and, therefore, mere admission by the directors, who deposited the duty for the shortage, is not enough to proof that the goods were clandestinely cleared from the appellant factory - thus, the shortage was detected on average basis is not sustainable. Penalty - HELD THAT:- There is no no material evidence was brought on record to prove the charges to attract penalty against them, except the statements which were relied upon by the department without following the mandate of Section 9-D of the Act - penalties set aside. A similar issue has come up for consideration of this Tribunal in case of BIHAR FOUNDARY & CASTINGS LTD., M/S. GAUTAM FERRO ALLOYS VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, RANCHI [2019 (8) TMI 527 - CESTAT KOLKATA]. The Tribunal has held that in view of non-compliance of mandatory requirement of 36-B of the Act the case the clandestine removal cannot be made applicable merely based on the printouts taken from the laptop computer obtained during the search. And the appeals were allowed by setting aside the order passed by the Adjudicating Authority - The ratio of this case is applicable in toto in case at hand also thus the demand is not sustainable and liable to be set aside. Appeal allowed - decided in favor of appellant.
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