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2021 (1) TMI 708 - AT - Central ExciseClandestine manufacture and clearance - under valuation - laminated spring leaves - Mismatch in the books of accounts and invoices - case of the department in the ‘SCN’ is that the difference in the sales value as appearing in the alleged Sales Ledger obtained from the seized Pen drives vis-à-vis the available Central Excise Invoices for the relevant period represents clandestine clearances - Existence of corroborative evidences or not - HELD THAT:- The manner in which the Pen drives were seized and the retrieval of data (printouts) from the Pen drives along with its evidentiary value has been strongly agitated by the Appellants. We find that the seized Pen drives were not sealed with paper seal or otherwise as evident from the Panchnama dated 3 August 2012 drawn at the residence of the Appellant No. 1. Such sealing should have been done in the presence of the persons before whom the pen drives were sealed and signatures should have been obtained on the paper seal/sticker as provided in the Circular dated 1st December 2015 so as to allay any possibilities of tampering. It is also forthcoming from the case records that most of the printouts from the Pen drives were taken after conclusion of Panchnama proceedings. There is considerable force in the contention of the Appellants that the computer printouts relied upon to uphold the charge of clandestine clearance were not obtained in conformity with the mandatory conditions and safeguards laid down in Section 36B(2) & (4) of the Central Excise Act, as these were not produced by a computer which was being used regularly to store or process the information during the period in dispute and Certificate referred to Section 36B(4) of the Central Excise Act was also not obtained. Even the statement of Appellant No. 2 could not be admitted as evidence being not in accordance with the procedure prescribed under clause (b) of section 9D(1)of the Central Excise Act. It is also found from the case records that the printouts from the Pen drives are neither co-relatable with the central excise invoices raised by the Appellant during the relevant period nor corroborated by any independent evidence establishing clandestine manufacture or clearance. No efforts have been made by the investigating agencies to establish the existence of any unaccounted manufacturing activity in the form of unaccounted raw material, shortage of stock, shortage of raw material/finished goods, excess consumption of electricity, unaccounted labour payments, interrogation of buyers/transporters or any incriminating record/document to suggest any flow back of cash etc. The revenue authorities in this case have failed to discharge the burden of proving the serious charge of clandestine clearance or undervaluation with cogent and clinching evidence. It has been consistently held that no demand of clandestine manufacture and clearance can be confirmed purely on assumptions and presumptions and the same is required to be proved by the revenue by direct, affirmative and incontrovertible evidence. The charge of clandestine removal/undervaluation cannot sustain on the basis of the Pen drive data alone more so when the printouts have not been obtained in compliance with the mandatory conditions of Section 36(2) & (4) of the Central Excise Act - Appeal allowed - decided in favor of appellant.
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