TMI Blog2019 (12) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Appeal allowed - decided in favor of appellant. - Excise Appeal No. 76243 of 2017-[DB] And Excise Appeal No. 76244 of 2017-[DB] And Excise Appeal No. 76245 of 2017-[DB] And Excise Appeal No. 76246 of 2017-[DB] And with Excise Appeal No. 76247 of 2017-[DB] - Final Order Nos : 76357-76361/2019 - Dated:- 17-10-2019 - Shri P K Choudhary, Member (Judicial) AND Shri Bijay Kumar, Member (Technical) For the Appellant : Shri Anuraj Mishra And Shri Pragya Pandey, Advocates For the Respondent : Shri T Mondal, Authorized Representative ORDER Per Bijay Kumar: 1. All these appeals are taken up together for disposal since they are arising out of common Order-in-Original No DGR-EXCUS-000-COM-25- 16-17 dated 14.02.2012 passed by the Commissioner of Customs, Central Excise Service Tax, Durgapur, wherein he has confirmed the demand of ₹ 38,96,89,511/- under Section 11A(4) read with Section 11A (1) of the Central Excise Act, 1944 (hereinafter referred to as the Act ) alongwith interest under Section 11AA and Section 11AB of the Act and equivalent penalty under Section 11AC of the Act read with Rule 25 of Central Excise Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by the investigating officer on 30.03.2011. Similarly, the statements of Shri Sudipto Bhattacharya, Shri Deepak Kumar Agarwal and Shri Sitaram Agarwal were also recorded. Further, the statement of one buyer of billets, some of the buyers of M.S. wire rods and one broker were also recorded during the investigation. Accordingly, on the basis of the recovery of the handwritten exercise book, hand written loose sheets, the file and computer printouts recovered from the residence of Shri Ravi Bhushan Lal, the department concluded that the appellant has clandestinely removed the goods valued at ₹ 378,33,93,311/- during the period from 2010 to 2011, and thus evaded the Central Excise duty to the extent of ₹ 38,96,89,511. It was alleged by the department that the appellant had cleared finished goods without assessment and payment of duty and thus, evaded the central excise duty amounting to ₹ 13,11,367/-. Further, it was alleged that the appellant had cleared inputs without payment of duty and, accordingly, a central excise duty of ₹ 9,05,130/- was also demand. Accordingly, a Show cause notice No. 574/CE/84/2011/INV dated 24.09.2013 was issued to the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were carried out without any search warrant and the documents resumed, therefore, cannot be treated as relied upon documents in the proceedings. The learned Counsel relied upon the judgment of Hon ble Karnataka High Court in case of Nenmal Shankarlal Parmer Vs. Assistant Commissioner of Income Tax (Investigation) reported at 1992 (195) ITR 582, and Premier Glass Industries Vs. C.C.Ex. 2000 (123) E.L.T. 703 (Trib). The learned Counsel also submitted that the entire proceedings were conducted in absence of two independent and respectable habitants of the locality and the of search which was conducted without warrant that vitiated the search proceedings under Section 100 of Cr. P.C. and the recovery of documents from the residential premises and factory premises is, therefore, illegal and not sustainable and cannot become a basis for creating such a huge demand against the appellant. 6. The learned Counsel further argued that the panchnama dated 30.03.2011 by which data were obtained from the external data storage device seized from the residence of Shri. Ravi Bhushan Lal should have been carried out in the presence of any Computer expert and certification from the person w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon by the department against the appellant to prove the charges of clandestine removal are not an admissible evidence as per the provisions of Section 36-B of the Act due to above cited reasons. Ld. Advocate heavily relied upon the judgment of Hon ble Apex Court in case of M/s. Anwar P.V. Vs. P.K. Basheer- reported at 2017 (352) ELT 416 (S.C) wherein the Hon ble Supreme Court has prescribed certain guidelines before accepting electronic documents as an admissible piece of evidence. The learned Counsels have also relied upon various other decisions as under; M/s. S.N. Agrotech Vs. CC New Delhi; [2018 (361) ELT 0761( Trib. Delhi)] M/s. Shivam Steel Corporation Vs. CC CCE BBSR [2016 (339) ELT 310 (Trib. Kolkata)] M/s. Jindal Nickel Alloys Ltd. Vs. Commissioner of Central Excise, Delhi [2012 (279) ELT 134 (Trib.-Del.)] Commissioner of Central Excise, Trichy Vs. Sri Ulaganayagi Amman Steels [2009 (241) ELT 537 (Tri.-Chennai)] Copier Force India Ltd. Vs. Commissioner of Central Excise, Chennai-[ 2008 (231) ELT 224(Trib.-Chennai)] Shri UlaganayagiAmmal Steels Vs. CCE, Trichy [2008 (231) ELT 434 (Tri.-Chennai)] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that these are third party documents with glaring infirmities. These infirmities were stated as follows: a. Mr. Ravi Bhushan Lal was an employee of the Company, and any document or material recovered from his residential premises would be thus third party evidence. The counsel for the appellant placed reliance on the case of Santosh Tobacco Vs. Commissioner of Central Excise, Delhi-I, 2014 (311) E.L.T. 465 (Tri. - Del.), Commissioner Of Central Excise, Delhi-I Vs. Vishnu Co. Pvt. Ltd. 2016 (332) E.L.T. 793 (Del.), in support of his argument on this issue. b. The panchanama at the residential premises of Ravi Bhushan Lal on 30.03.2011 was prepared by Ratan Das and Ashok Haldar. The Appellant has prayed for their cross examination which was outrightly denied their cross-examination by the adjudicating authority, as such the panchanama cannot be relied upon in the proceeding. c. The loose paper sheets which were resumed, during the search at the residence of Shri Ravi Bhushan Lal were used as evidence without knowing the author of the said loose sheets, in absence of which the evidentiary value gets destroyed. d. There was also no list of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral statement cannot be relied upon and required to be eschewed as evidence. He further submitted that appellant was allowed the cross examination of few of the witnesses, who has categorically deposed that their statements were extracted under coerosion, threat and under duress. He further submitted that the Adjudicating Authority had failed to follow the requirement of Section 9D of the Act regarding examination in chief of witness placing reliance on the following orders/judgments:- G-tech Industries Vs. Union of India- reported at 2016 (339) ELT 209. C.C. Vs..Bussa Overseas Properties Ltd., reported at 2007 (216) E.L.T. 659 (S.C.) C.C.E. v. Parmarth Iron Pvt Ltd., reported at 2010 (260) E.L.T. 514 (All.) Hukum Chand ShyamLal v. Union of India- reported at (1976) 2 SCC 128. 12. It has also been submitted that the shortage of the goods as detected by the DGCEI officers cannot be admitted since, the stock verification was done on the basis of average weighment and eye estimation and in actual there was no shortage at the time of stock taking of the goods. The officers did not carry out the actual weighment of the raw materials ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der to invoke the extended period of limitation, the impugned SCN has alleged suppression of facts against the appellants. But no suppression of facts by the appellant could be alleged in the case at hand because the search was conducted on 30.03.2011. All the material facts were in knowledge of the department, as the main appellant was paying huge central excise duty on a regular basis and the audits were also conducted from time to time and no such discrepancies were pointed out by the Audit team. He further submitted that the demand is not sustainable both on merit as well as on limitation and, therefore, the impugned order imposing duty, penalty and interest against the appellant and their directors are not sustainable and liable to be set aside. 15. The learned Authorized Representative of the Department reiterated the findings of the impugned order and submitted the panchnamas were drawn in presence of pancha witnesses, which were duly signed by the officer and also by Shri Ravi Bhushan Lal. Therefore, the search proceedings were made in presence of independent witnesses and the same cannot be challenged by the appellant at this stage. It was further submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t clear as if such seal existed and whether it was signed by the panch witnesses and counter by Shri Ravi Bhushan Lal. Second panchanama proceedings for retrieval of data contained in hard disc and laptop computer which was in the office of DGCEI at around 8 p.m. and the print outs were obtained without mentioning the computer which was used for such data retrieval, either from the Laptop or from the external storage Device. It is apparent that the statement of Shri Ravi Bhushan Lal was obtained by the officer after obtaining the printouts from the alleged storage device and the panchanama proceedings started late at about 8:00 p.m. The statement of Shri Ravi Bhushan Lal was obtained only after the Panchanama proceedings were over, and therefore, the officers recorded his statement during his detention in the office that too in night. To test the veracity of the search proceedings the crossexamination of the Pancha witness was necessary, which was not allowed to the appellant and, therefore, we are left with no option; but agree to the contention of the learned Advocate that the veracity of the panchanama is doubtful. We have also considered the judgments cited by the learned Advoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 30.03.2011 that 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. Moreover, none of the 12 persons on whose statement reliance was placed by the department were cross-examined. In C.C.E. Vs. Kuber Tobacco Product Ltd. [2016(339) E.L.T. A-130] the Hon ble Delhi High Court has held that without any corroborative evidence, loose papers, documents cannot be a sufficient to prove charges of clandestine removal. The Hon ble Delhi High Court in case of C.C.Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce are missing in the present case and the evidences brought into the record by the department are incomplete, inconsistent and not a reliable piece of evidence to prove charges of clandestine removal. 20. 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. We have also considered the judgment cited by the appellant in case of C. C. Ex. Lucknow Vs. M/s.Sigma Castings reported at 2012 (282) E.L.T. 414 (Trib.Delhi), M/s. Micro Forge (I) Pvt. Ltd. Vs. C. C. Ex. Rajkot reported in 2004 (169) E.L.T. 251 (Trib.- Mumbai), C.C.Ex. Indore Vs. M/s. Kapil Steel Ltd. V/s 2006 (204) E.L.T. 411 (Trib.-Del.), C.C.Ex. Lucknow Vs. M/s. Kundan Casting (P) Ltd. reported at 2008 (227) E.L.T. 465 (Trib.-Del.), M/s. RHL Profiles Vs. C.C.Ex. Kanpur reported at 2013 (290) ELT 247 (Trib.-Del.). In view of the findings contained in these judgments we hold that the shortage was detected on average basis is not sustainable and, therefore, we set aside the demand. 21. We hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
