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2017 (3) TMI 926

of these witnesses without providing them for cross-examination - reliance was placed in the decision of the case of G. Tech Industries vs. UOI [2016 (6) TMI 957 - PUNJAB & HARYANA HIGH COURT], where it was pointed out that Section 138 of the Indian Evidence Act, 1872, clearly sets out the sequence of evidence, in which evidence-in-chief has to precede cross-examination, and cross-examination has to precede re-examination. - The computer printouts have been taken out as RUD-1 and 2 are in the form of prints taken out from the pen-drive as well as from the hard-disk recovered, the conditions under Section 36B(2) have not been satisfied for the admissibility of evidence in the form of computer printouts, in RUD-1 and 2. - It is true that the evidence which is required to be produced in quasi judicial proceedings should be such that the charges get established on the basis of preponderance of probability. The standard of evidences need not be as high as in criminal proceedings, where the charges are required to be established beyond reasonable doubts - in the present case the allegation of clandestine manufacture and clearance has not been substantiated by any tangible evidenc .....

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ties failed to offer all the witnesses for cross examination by the appellants, and to that extent there was serious infraction of principles of natural justice rendering the order to be bad in law. It has also been contended that the authority could not have relied upon the documents recovered from the possession of the third party namely, Smt. Janaki Sharma, who is nowhere concerned with the business of the appellants. Her statement dated 18.11.2005 was retracted immediately on the day following the day on which statement was recorded. And in that connection, attention was drawn to copy of her letter dated 19.11.2005. As per the show cause notice itself the total daily production from the appellant s factory was 5 tonnes and the factory was running in a single shift and working for about 10 - 15 days in a month. Considering the same, the calculations regarding the production in the appellants factory as disclosed in the above quoted chart, is totally fanciful and without any basis. They relied upon a number of decisions in support of his contention including the decision in the matters of Galaxi Indio Fab Limited vs. CCE, Lucknow as reported in [2010 (258) ELT 254 (TriDel)], Done .....

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lso not taken in the presence of Smt. Janki Sharma or in presence of Shri. J.K. Aggarwal. (d) The Ld. Commissioner in Para 41 of his Order-in-Original (page 127 of Appeal) has found that the appellants could only produce 600MT of ingots during the period from March 2005 to November, 2005. As per RUD-1 and 2 the sale value of ingots is ₹ 25,23,192.30 (page 52 of Appeal). Taking the sale price of ₹ 1,70,000/- per MT the quantity of ingots produced as per RUD-1 and 2 comes to 3132MT as against the production of 600MT as per the production capacity found by the ld. Commissioner. It is, therefore, obvious that RUD-1 and 2 did not belong to the appellants as also stated by Shri J.K. Aggarwal in his statements dated 20.07.2007 and ought not to have been admitted as evidence against the appellants. (e) The Ld. Commissioner has accepted in Para 41 of the order the facts mentioned in Para 2 of the show cause notice i.e. the appellants could produce 5MT of ingots in a day and worked 10 to 15 days in a month. For the period from 17.09.2005 to 12.11.2005 covered by RUD-3 the production as per the production capacity would work out to 135MT. On the basis of the sale value of ₹ .....

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ment Co. - 2014 (309) ELT 411 (All.). The statements of Smt. Janki Sharma and others ought not to have been relied upon by the ld. Commissioner for the following reasons:- (i) Smt. Janki Sharma retracted her statement dated 18.11.2005 vide her letter dated 19.11.2005 to Addl. Director General, DGCEI. (ii) During her cross-examination on 10.02.2009 (page 133137 of Appeal) she deposed that search on 18.11.2005 was not conducted properly, there was no recovery of RUD-1, 2 and 3, she did not work for the appellants, she was working for the other parties on part-time basis, her statements were recorded in the office as dictated by the officer etc. (iii) Shri J.K. Aggarwal, Proprietor in his statement dated 20.07.2006 (RUD-12) stated that Smt. Janki Sharma had never worked with the appellants and no computer was given to her. (iv) Reliance on Smt. Janki Sharma s retracted statements without any independent corroboration and rejection of her deposition during cross-examination as an afterthought by the ld. Commissioner are misplaced and not proper. He ought to have kept her statements which were retracted and contradicted during cross-examination, out of the consideration. (v) The impugne .....

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he same is also apparent from the letter dated 30.7.06 by the appellants themselves. 6. Heard both sides and perused the records. The DGCEI officers searched the factory and residence of the proprietor Shri J.K. Aggarwal and connected premises on 21.09.2005, no discrepancy in the physical stock of inputs as well as finished products viz-a-viz, the recorded balance in the statutory records was found. After about two months on 18.11.2005, the officers searched the residence of one Smt. Janki Sharma said to be an employee of M/s. Kaycee Electricals and following was recovered at the time of search:- (i) Several loose slips were found which were placed in a file and marked 1-56 - (RUD-I) (ii) One pen-drive of Kingston brand of 512MB, one Hard disk drive, Seagat brand of 80GB capacity. Printouts were taken of the contents from the above equipments. The data generated from the pen drive pertain to account of sale pertaining to ATM (RUD-1) and SHIVA (RUD-2). In her statement on the date of search i.e. 18.11.2005, Smt. Janki Sharma stated that data generated under the heads of ATM and SHIVA from the above, pertains to unaccounted and clandestine sales made by the appellant. The ATM account .....

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search, admitted that these printouts are out of Kachchi Parchis given to her by proprietor Shri J.K. Aggarwal and are related to sale of goods made by the appellant clandestinely. However, it is on record that she has retracted her statement immediately thereafter on the next day. At the time of search at her residence, it is recorded that Smt. Janki Sharma is employee of the appellant and that the details culled out as RUD-1 and 2, did not belong to them and hence ought not to be admitted as evidences. In the appeal, it has further been explained that RUD-1 contains entries up to 28.02.2006 and the printouts were taken out on 18.11.2005 from the pen-drive and hard disk seized. This creates serious doubt about the authenticity of the RUDs. Smt. Janki Sharma during her cross-examination before the adjudicating authority has further disowned the printouts and has also submitted that there was no printer at her house at the time of search. This also raises serious doubt how the printouts were taken in the presence of Smt. Janki Sharma and Shri J.K. Aggarwal, proprietor. In the light of the above, it clearly emerges that the conditions under Section 36B(2) have not been satisfied for .....

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well as computer printouts containing certain details of alleged clandestine clearances recovered from Smt. Janki Sharma. The status of Smt. Janki Sharma that she was an employee of the appellant s company has not been established. She has also retracted her statement given at the time of search, promptly. The computer printouts also did not satisfy the conditions prescribed under Section 36B of the Central Excise Act, 1944. Such computer printouts are not eligible to be used as evidence. 11. It is settled law that documents recovered from a third party can be used against the manufacturer to prove clandestine removal only when these are supported with corroborative evidences. The Revenue has alleged that huge quantity of finished products have been manufactured and cleared clandestinely without payment of Central Excise duty. The computer printout of data recovered from the house of Smt. Janki Sharma, no doubt, gives rise to suspicion that these are details relating to clandestine clearance of the goods. However, clandestine manufacture and clearance alleged against the appellant is a very serious charge which needs to be proved by Revenue by producing tangible and reliable eviden .....

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