TMI Blog2019 (12) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... based on the documents which do not belong to the appellant company. There were 5 computers installed in the office when the Panchanama was drawn and it was found that no incriminating documents or data was present in the said 5 computers. This clearly proves that the department does not have any source data of the said pen-drive and in absence of any certification to support the alleged data of the pen-drive, the said electronic data cannot be relied upon to prove the charges of clandestine removal. Hence, demand based on the said alleged pen-drive is not maintainable in the eyes of law and thus liable to be set aside. No evidence as regards to purchase of excess raw material, use of excess electricity, deployment of extra labor force to prove the illicit manufacturing and clearance activity has been brought into the record. No evidence as regards to purchaser of the raw material, transportation of finished goods, receipt of cash payment etc has been brought into the record. The Department is solely relying upon the statement of the Director of the company and only some of their employees. The statement of the Director is not conclusive and mere observatory in nature where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mises. The officers also recovered a pen-drive of Kingston make 4GB from the possession of Director of the company Shri Promod Kumar Agarwal. Although 5 computers were found installed in the said office premises which were browsed in the presence of the panchwitnesses, nothing incriminating was found. The computer printouts obtained from the said pen-drive were kept in FileNo.01/DGCEI/JRU/CRMPL/0/2013 and 02/DGCEI/JRU/CRMPL/0/ 2013. The other documents which were recovered, were also kept by the officers with different serial numbers for further investigation. 3. Another office premises situated at 201, Om Sai Villa, Near Rajeshwari Nursing Home was also searched by the officers and from the table drawer of Shri Akshya Kumar Sinha Accountant, one pendrive of Kingston make of 4GB was found by the officers. The officers also recovered some loose documents from the said office premises. The said pen-drive and the documents recovered from the said premises were found to be irrelevant. The officers also obtained statement dated 26.07.2013 from the Director of the company Shri Promod Kumar Agarwal in respect of computer printouts mentioned in as File No.01/DGCEI/JRU/CRMPL/0/13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with File No.01/DGCEI/JRU/CRMPL/0/13 02/DGCEI/JRU/CRMPL/0/13 and it was found that some of the entries made in the said document was corroborative with File No.01/DGCEI/JRU/CRMPL/0/13 02/DGCEI/JRU/CRMPL/0/13 and accordingly it was concluded that the said documents were related to clandestine removal of clearances of their finished goods without payment of excise duty. Documents mentioned as No.27/DGCEI/JRU/CRMPL/0/13 which were in the form of hand written note pads were compared with daily stock account (daily summary) for the period 21.07.2013 to 22.07.2013 and it was found that excess clearances were effected over and above the clearances reflected in daily summary. 5. Accordingly, demand of Central Excise duty amounting to ₹ 5,96,81,985/- was demanded from the appellant on the basis of the documents as No.01/DGCEI/JRU/CRMPL/0/13 and 02/DGCEI/JRU/CRMPL/0/13 which were retrieved from the pen drive alleged to have been recovered from the office of the appellant and the entries made in these computer documents were compared with the sale invoices for the corresponding years. Documents mentioned as Sl.No.12/DGCEI/JRU/CRMPL/0/13 and 27/DGCEI/JRU/CRMPL/0/13 which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. They emphasized that according to the Panchanama, there were 5 other computers which were installed in the office premises of the appellant and nothing incriminating has been found by the officers in the said computers. It is certain that the data which was in the pen drive was taken from some computer installed at the office of the appellant. In this case, no evidence for source of the data contained in the pen drive has been brought on the record and in the absence of source of data, sole reliance cannot be placed on an alleged planted pen drive. Similarly, it is not mentioned how the print outs were obtained from the said pen drive. There is no mention in the Panchanama as to which computer was used to attach the said pen drive to obtain the printouts. Similarly, it is also not mentioned that whether the printouts were obtained from a printer attached in the office premises or somewhere else. They further submitted that in the instant case, heavy reliance has been placed on the data retrieved from the electronic device. However, this entire data is inadmissible and under challenge since, the mandate under Section 36B for the resumption of data from electronic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /13, 19/DGCEI/JRU/CRMPL/13,21/DGCEI/JRU/CRMPL /0/13 and 27/ DGCEI/JRU/CRMPL/0/13 which are in the nature of loose sheets and hand written sheets, they submitted that the said documents were indiscriminately resumed at the time of the search without proper authentication and verification as to who is author of the said documents. The said documents were further compared by the department as per their convenience with the Invoices or from sale register or from data obtained from the computer pen drive or from daily summary reports. On some occasions, these documents were compared with each other also and most of the time it was found that entries were recorded in the books of account. No specific allegations in respect of these documents were made and vague allegations of under valuation, suppression of production and charges of clandestine removal has been made. These documents were compared with the statutory documents according to the convenience of the department and charges of the clandestine removal have been alleged against the appellant without any further corroboration. It is a well settled principle of law that no demand can be raised on the basis of unauthenticated documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iry in respect of these vital ingredients and the entire case is based on illogical theories and comparison of documents of each other and that is too as per the convenience of the department. The charges of clandestine removal which is not based on any corroborative evidence cannot be held sustainable. Oral statement of the Director is also merely based on the printouts obtained from the alleged pen drive and not on the loose sheets which were compared each other and were some statutory records and conclusion has been drawn that some clandestine removal has taken place on the basis of the said loose documents. 13. They relied upon the judgments of Chandan Tobacco Company Vs. Commissioner Of C. Ex., Vapi, 2014 (311) E.L.T. 593 (Tri. - Ahmd.), Rama Spinners Pvt. Ltd. Vs. Commissioner Of Cus. C. Ex., Hyderabad-I, 2017 (348) E.L.T. 321 (Tri. - Hyd.), Commissioner of Customs, C. E. S.T., Ghaziabad Vs. Auto Gollon Industries P. Ltd. 2018 (360) E.L.T. 29 (All.), Continental Cement Company Vs. Union Of India 2014 (309) E.L.T. 411 (All.), Commissioner Of C. Ex., Coimbatore Vs. SVA Steel Re-Rolling Mills Ltd. 2018 (362) E.L.T. 411 (Mad.), Commissioner Of C. Ex. S.T., Udaipur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l especially when it is admitted by the representatives of the company. He further submitted that the loose documents pertains to the appellant factory and recovered from their office and compared with each other and wherever they were not matched with the corresponding invoices, the demand was correctly raised. He stated that some of the entries shown in the loose papers and document obtained from the recovered pen-drive does not match with the corresponding statutory records which clearly proves that the goods were clandestinely cleared from the appellant s factory. He further submitted that in case of admission, corroborative evidence in the form of recording statement of the raw material supplier, purchaser of the goods and other clinching evidence are not required to prove the charges of clandestine removal. 15. Heard both sides and pursued the appeal records. 16. We have considered the rival submissions and it is evident from the Panchanama that the Kingston make pen-drive was recovered from the possession of the Director of the company, Shri Pramod Kumar Gupta. Whereas the appendix to the recovery memo clearly indicates that the documents were retrieved and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been brought into the record. No evidence as regards to purchaser of the raw material, transportation of finished goods, receipt of cash payment etc has been brought into the record. The Department is solely relying upon the statement of the Director of the company and only some of their employees. The statement of the Director is not conclusive and mere observatory in nature wherein he has stated that it might be possible that some of the entries will not match the corresponding invoices. Such a statement cannot be said to be of conclusive proof of clandestine removal in absence of corroborative evidence as discussed above. Similarly, the statement of employees cannot be relied upon when the request of cross-examination has been denied on vague ground. Even otherwise Revenue chose not to examine any witnesses in adjudication, and in such a case their statements cannot be considered as evidence. Reliance is placed on the judgement of G-tech Industries v. Union of India- 2016 (339) ELT 209. Therefore, we set aside the demand of duty, penalty and interest against the appellant and its Director and allow both the appeals with consequential relief to the appellants. (Order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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