TMI Blog2019 (12) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... pen drive was sealed earlier and was opened in presence of panchas. Even this Panchnama dt. 02.12.2010 is disputable as on Page No.1 it records that the panchnama proceedings of opening of pen drive and taking out printout were started at 5PM, but on the 3rd Page it records that the proceeding started at 3.00 PM and completed at 4.30. We also find that the pen drive was opened on 19.10.2010 during the visit of the officers. However the panchnama dated 19.10.2010 is silent about any alleged sales data found in pen drive. The alleged data finds mention only in panchnama dated 02.12.2010. In such case we find that the panchnama proceedings are not reliable piece of evidence having observed the serious discrepancies in panchnama proceeding - the appellant has vehemently argued that the Pen drive data cannot be relied upon as requirement under section 36B of Central Excise Act, 1944 was not followed. Acceptable evidences or not - HELD THAT:- Section 65B of the Evidence Act, 1872 and Section 36B of the Central Excise Act, 1944 are parimateria and hence the ratio laid down by the Apex Court is squarely applicable for the invocation of the provision of Section 36B of the Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gajera, Advocate Shri. Dinessh Ramani, CA for the Appellant Shri. Govind Jha, Authorised Representative for the Respondent ORDER The present appeals have been filed by M/s Jogi Bearing Co. (for brevity JBC), Partner Shri Sandeep A. Bhalodia and other co-appellants who are buyers/suppliers of goods against impugned Order dt. 20.12.2013 passed by the Commissioner of Central Excise, Rajkot. The brief facts of the case are that M/s JBC are engaged in the manufacturing of tapper roller bearings and were availing SSI exemption benefit on clearances of goods under Notification No. 8/2003 CE dated 01.03.2003. They were also manufacturing KLMN Brand bearing belonging to M/s KLMN bearing, Barut, U.P and were clearing the bearing to said concern. M/s JBC along with others were issued show cause notice dated 08.04.2013 alleging that the factory of M/s JBC was searched on 19.10.2010 during which the sales invoices/ purchase invoices and various documents were seized. The bearings having KLMN brand and dies were also seized. A pen drive seized from the office was opened in presence of panchas and Shri Sandeep Bhalodia. The show cause notice relied upon state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ahul Gajera appearing for M/s JBC submits that there is no reason to demand duty from M/s JBC. He points out that the show cause notice has placed reliance upon the data allegedly found in pen drive seized from the table drawer of Appellant unit. He takes us through the panchanama conducted during the visit of officers on 19.10.2010 to submit that the panchanama only states that the pen drive was found in table drawer and the same was run on computer and the contents were inspected. The panchnama does not state that any sale data was found recorded in pen drive nor does it states that the pen drive was sealed and seized. The lists of documents seized do not find mention of pen drive. It is stated in show cause notice that the said seized Pen drive was opened in presence of panchas vide panchnama dt. 02.12.2010. This panchanama dated 02.12.2010 states that the pen drive was earlier seized and placed in cover and the signature of panchas and Shri Sandeep Bhalodia were obtained, but such sealing of Pen drive does nowhere appears in panchnama dated19.10.2010. The sealing of pen drive was deliberately stated in Panchnama dated 02.12.2010 to hide the fact that on 19.10.2010 the pen drive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nowhere bears the name of Appellant Unit nor does it contain the details of alleged goods removed viz. quantity, description which was also held by the adjudicating authority. 4. He submits that they had requested for cross examination of Shri. Rajnish Tilva, the panch witness in panchnama proceedings of 19.10.2010 and whose statement was recorded and relied upon in show cause notice as Part Time Accountant of Appellant unit. They had also requested cross examination of all persons whose statements were recorded by relying upon the pen drive data. However the cross examination was not granted. He submits that in such facts the statements cannot be relied upon. He relies upon judgments in case of Basudev Garg 2013 (294) ELT 353 (DEL) and Premier Alloys Ltd. 2019 (366) ELT 659 (ALL). There is no evidence of receipt of goods by the buyers as no records of purchase by such alleged buyer were investigated or recovered from the premises of said buyers. There is no evidence of sales of material as alleged on basis of pen drive data. No records of transporters were found and hence there cannot be any demand in the basis of pen drive data. He also submits that no shortage or exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly made to sign the statements written by the departmental officers. They have never purchase any goods from M/s JBC without bills and hence there is no reason to impose penalty upon them. 6. Shri. Govind Jha, Learned (Authorized Representative) appearing for the revenue reiterates the allegations and findings of the impugned order. He submits that the sales details found in pen drive stands accepted by the Partner and buyers of goods and the transporter has stated that the goods without bills were transported and hence the demands are sustainable. 7. Heard both the sides and perused the case records. The demand against the Appellant Unit is based upon the pen drive said to be seized from the table drawer of office in factory. The statement of buyer of goods has been relied upon who on the basis of alleged sales data found in pen drive have stated that they received the goods without payment of duty. Coming to the submission of the Appellant, we find that the pen drive was taken under possession by the officers vide panchanama dated 19.10.2010. One of the panch witness is Shri Rajnish Tilwa who also is part time accountant of the Appellant Unit. The panchnama date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that no computer on which such data was produced or stored was found and none of the above condition of Section 36 B(2) has been fulfilled. Moreover the requirement of certificate as stipulated in section 36B (4) was also not fulfilled which are as under: (4) In any proceedings under this Act and the rules made thereunder where it is desired to give a statement in evidence by virtue of this section, a certificate doing any of the following things, that is to say, - (a) identifying the document containing the statement and describing the manner in which it was produced; (b) giving such particulars of any device involved in the production of that document as may be appropriate for the purpose of showing that the document was produced by a computer; (c) dealing with any of the matters to which the conditions mentioned in sub-section (2) relate, and purporting to be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities (whichever is appropriate) shall be evidence of any matter stated in the certificate; and for the purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) The information contained in the record should be a reproduction or derivation from the information fed into the computer in the ordinary course of the said activity. 14. Under Section 65B(4) of the Evidence Act, if it is desired to give a statement in any proceedings pertaining to an electronic record, it is permissible provided the following conditions are satisfied : (a) There must be a certificate which identifies the electronic record containing the statement; (b) The certificate must describe the manner in which the electronic record was produced; (c) The certificate must furnish the particulars of the device involved in the production of that record; (d) The certificate must deal with the applicable conditions mentioned under Section 65B(2) of the Evidence Act; and (e) The certificate must be signed by a person occupying a responsible official position in relation to the operation of the relevant device. 15. It is further clarified that the person need only to state in the certificate that the same is to the best of his knowledge and belief. Most importantly; such a certificate must accompany t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ination of the buyers of goods, suppliers of raw material and transporter who had accepted the buying of finished goods, selling of raw material and transportation of goods on the basis of pen drive data. However the same was not granted. We find that the pen drive data did not contain the name of Appellant, the quantity and description of goods was also not appearing. When the statements were solely based upon pen drive data with no corroborative evidence either from the Appellant Unit or from side of persons whose statements were recorded, in that case it was incumbent on the part of adjudicating authority to allow cross examination. In absence of same the demands could not have been confirmed against Appellant. In case of M/s Basudev Garg In Basudev Garg v. CC, New Delhi, 2013 (294) E.L.T. 353, the Hon ble Delhi High Court relied upon the earlier decision in J K Cigarettes v. CCE, 2011 (22) S.T.R. 225 (Del.) = 2009 (242) E.L.T. 189 (Del.) and held that, insofar as general propositions are concerned, there can be no denying that when any statement is used against the assessee, an opportunity of cross-examining the persons who made those statements ought to be given to the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of the document needs to be established by independent corroboration. The tribunal held that there being a conspicuous absence of actual diversion of the goods in the domestic market and flow-back of funds, the demand of duty cannot be sustained on the basis of mere statements made by the transporters of goods. We thus do not find any reason to demand duty from Appellant unit. 9. As regard confiscation of goods bearing brand name KLMN we find that the Appellant has produced certificate issued by the Gram Panchayat that the factory is situated in rural area. In terms of para 4 (c) of the Notification No. 8/2003 CE dated 01.03.2003 the factory situated in rural area even if manufacturing others branded goods is eligible for said exemption. Therefore we hold that the Appellants are eligible for SSI Exemption and the goods cannot be confiscated. Since we have held that the demand against M/s JBC is not sustainable, the penalty upon Appellant Unit and other co-appellants is also not sustainable. We therefore set aside the impugned order and allow all the appeals with consequential reliefs, if any. (Pronounced in the open court on 20.12.2019) - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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