TMI Blog2022 (5) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the proceedings are in contravention of the provisions of CRPC, we are in agreement with the Authorised Representative that in matters involving evasion of taxes, it would be sufficient if the documents recovered during the search do otherwise constitute reliable evidence. However, under the circumstances, the evidence put forth requires to be weighed in the facts and circumstances of the case and in juxtaposition with the corroborative evidence. Whether or not the recovery of printouts from the hard disc found in alleged secret office of the appellants from the possession of Shri Vicky Kumar, an employee of the appellants, the appellants have vehemently submitted that the hard disc in question was not established to belong to them or established to be used with a computer which was in use by the staff of the appellants in course of regular business; the printouts taken from the said hard disc and recovery of documents thereof is in clear violation of the provisions of Section 36B of Central Excise Act, 1944. The appellants claim that the impugned order has failed to appreciate and ensure due compliance to the procedures and the requirements stipulated under the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rroborated evidence alone. It is now settled principle that cases of this nature need not be proved with mathematical precision. At the same time, a single piece of evidence cannot be accepted to encompass the whole gamut of transactions. A word of caution must be added here that while the principle of preponderance probability demands us to believe that under the given facts and circumstances, the alleged tax evasion must have occurred. However, the principle ends here. Issues like quantification of duty evaded, requires concrete reliable dependable data. Reliance on principle of preponderance of probability, no way confers a License to demand duty on the basis of assumptions/presumptions/ vague imputations. While accepting the fact that there are reasons to believe that there was evasion of duty on the part of the appellants, it is found that the quantification of such duty evaded should be sustainable on the evidence available and needs to be arrived in a logical, rational and legally appropriate manner. In the absence of any corroborative evidence, it would be difficult to uphold the charges levelled on assumption and presumption. Hon ble Supreme Court held in OUDH SUG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and inferences drawn from the printouts, which were taken by the investigating officers themselves from one External Hard Disc (R Transcend Store Jet 500GB 34822-1030 Black Colour with Orange Strip), recovered from the possession of one Vicky Kumar alleged to be a Data Entry Staff of MCPL; there exists absolutely no tangible evidence of suppression of production, clandestine purchase, receipt and use of raw materials, and removal of finished goods or undervaluation; the whole case made out against the Appellants is entirely and exclusively based on unwarranted and factually unsubstantiated, presumptive inferences drawn from data obtained from just one source i.e. printouts of sale data retrieved from the external hard disc recovered from one Mr. Vicky Kumar; evidence relied upon in the case to support the allegations as levelled is not only inadmissible but also utterly uncorroborated from other independent, reliable, affirmative and tangible evidences; the authenticity and genuineness of all such private documents has not been properly ascertained and verified as the authors of these documents have either not been identified; even where identified, none of them have been quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined under Section 36B(2) and 36B(4) of the Central Excise Act, 1944; seized external hard disc did neither qualify to be considered as Computer , nor the seized printouts from the same be called computer printouts ; in the absence of the requisite certificate in terms of sub-section 4 of Section 36B of the Central Excise Act, 1944, the said hard disc and the said printouts retrieved cannot be admitted as evidence. 3. Learned Counsels submit thatthe Search and the seizure proceeding conducted at the referred four places on 04.12.2014 under the four Panchnamas dated 04.12.2015 as drawn at the respective places were all conducted in flagrant violation of Central Excise Act read with Section 100(4) of the Cr PC; the Panch witnesses, Shri Vir Karmarkar and Shri Bhima Lohar are interested Panch witnesses as they have been routinely used as witnesses by the Investigating Authorities in multiple proceedings; the so called secret office is a third-party premises, being actually a godown owned by Cadbury / Bournvita; at the time of the search of this premises no one from the side of the Appellant was present; Panchnama drawn at the premises fails to highlight the basis of the entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot anywhere contain or make a mention of the name of the Appellant Company; method and manner of preparing these reports is not known; neither the persons who actually prepared these reports are identified nor any statement recorded of them, The counsels submit that, even if admitted as evidence, theseprintouts do not constitute requisite and sufficient evidence of production and removal of huge quantity of 26799.732 MTof M.S. Ingots valued at Rs. 97,13,49,575; no corroborative and substantiating evidence to prove purchase and receipt of required quantity of raw materials, consumption of the said raw materials for manufacture of finished goods, transportation of such huge quantity of finished goods has been alleged or proved; 3.2. Learned Counsels submit thatsimilarly, the seized private diaries, private pocket note books allegedly containing party wise and date wise transaction details recovered from the office/ residential premises cannot be relied upon for corroborating the entries appearing in the printouts obtained from the hard disc as no author is identified and documents have not been examined and tested; seized Documents like note books / note pads (allegedly containin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erments during cross examination, to demonstrate and that none of the statements were voluntary and therefore, cannot be admitted, have been ignored; allegation of clandestine removal of any quantity cannot be upheld unless it is established through tangible and affirmative evidence showing raw materials consumption, transportation, sale to various buyers and sale proceeds realised; appellants rely upon the ratio of the judgment of the Hon ble Tribunal in the case of M/s. Kuber Tobacco Products Ltd2013 (290) ELT 545 (Tri. Del.). 4. Learned Counsels submit further that learned commissioner erred in holding that the appellants filed to refute such fact based allegations with fact based replies and instead raised general objections, procedural infirmities, investigation deficiencies, infirmities in Panchnama proceedings seizure etc; the observations and the findings of the Commissioner are erroneous and misleading and proceeds further on the principle of preponderance of probability. They submit that the submissions put forth by the Appellant were substantially based on factual aspects and covered the related legal aspects; Panch witnesses were interested and they were either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , wherein it was held that joining of independent witness is not an empty formality. 4.2. Learned Counsels submit further thatCommissioner held that the condition required under Section 36B(2) of the CEX Act are not required to be fulfilled since the hard disc was seized from the office of MCPL in presence of witnesses and each page of the document was signed; justification given by Commissioner is not only patently erroneous but also misleading; the hard disc was given to Shri Vicky Kumar by one Shri Shekher as deposed by Shri Vicky Kumar during his cross examination; this fact has not been disputed by the DGCEI officers in their comments cited by the Commissioner; moreover, the hard disc was taken out from the bag of Shri Vicky Kumar for the first time by the DGCEI officers after he had just entered the office; Neither the investigating officers ever tried to issue summons to Shri Shekher nor commissioner called him to give evidence; the contents of the seized external hard disc i.e. the printouts of the sale details taken from the said external hard disc by the DGCEI Officers, Jamshedpur are not admissible since they were never resumed in the manner required, fulfilling th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be installed and being used regularly for their activities by MCPL; printouts taken from the seized external hard disc do not even qualify to be described as Computer printout within the meaning of the term computer printout as used in Section 36B of the Act as the seized hard disc cannot by any reasoning or logic be equated be a computer or treated as computer per se , as per Section 36B(2); therefore, the evidence cannot be Computer printouts nor can be admitted in evidence as documents ; the investigating officers ought to have taken steps to obtain a certificate duly signed by a person owning the hard disc and occupying a responsible official position in relation as stipulated under Section 36B(4), ibid; when the condition is not fulfilled none of the printouts taken from the said hard disc have any evidentiary value to substantiate any of the allegations made in the SCN; commissioners reliance on Copier Force India Ltd2008(231)ELT 224(Tri- Chennai);Shri UlaganayagiAmmal Steels 2009(241) ELT 537 ( CESTAT) and 2008(231) ELT 434 (Tri. - Chennai), is misplaced as the facts are distinguishable and as it stands over-ruled by the subsequent decisions of the Apex Court a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d disc and its contents cannot be imposed upon MCPL. Shri Vicky Kumar was not questioned on being influenced by the Appellant No. 2 or MCPL; Shri Vicky Kumar stated on 04.12.2015 that he had not made the entries appearing at Pages 87 to 62 and 88 to 102 of the document No. 05; he denied having made the entries appearing at pages 103-104 pertaining to monthly production and consumption report of MCPL; he had been working as data entry staff of MCPL for the last six months only; Veracity of voluntary nature of the statement was not examined; on the one hand clearly stated that he started making entries from Sep, 2015, and on the other hand commented on the entries appearing on several pages of printouts from the seized hard disc which cover nearly five-year period from Apr, 2011 to Nov, 2015; it could be either his guess work or he was tutored; Deposition made by Shri Vicky Kumar during his cross-examination cannot be dismissed merely as an afterthought and as fabricated evidence; Shri Raj Jaiswal stated on 31.12.2015 that he did not agree with the replies given by Shri Vicky Kumar on 04.12.2015. 4.5. Learned Counsels submit that Commissioner erred in holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Central Excise Invoices issued by MCPL to ascertain and confirm the actual sale proceeds realized so as to establish undervaluation of the goods sold under properly issued excise invoices; allegations have been confirmed without considering that the clandestine removal is required to be proved by the whole chain of activities i.e. from procurement of raw materials, utilization of same with related different overhead expenses viz. payment of wages and salaries, consumption of electricity, transportation of the goods, payment to the transporter, receipt of the goods by recipient and recovery from the same and not by simply interpreting the coded entries. 4.6. Learned Counsels submit that Commissioner was wrong in in holding that the defence of MCPL does not have any legal or technical ground to stand; the record of cross-examination supports the case of the Department; contention of the Appellants that corroboration of sale details entered in the seized hard disc and printouts taken therefrom with other seized private documents is for a very limited period in as much as while the sale details contained in the seized computer printouts pertain to nearly five-year peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified, have not been examined to ascertain and verify the truth and contents; Commissioner wrongly holds that the allegation of clandestine evasion is not required to be proved on the principle of proof beyond reasonable doubt but on the basis of preponderance of probability . But the entire documentary evidence in the case, whether it be the printouts from the seized external hard disc or the seized private handwritten diaries, note book, loose sheets etc., were all recovered and resumed through irregular search and seizure proceedings in violation of the provisions of Section 100 of Cr.P.C. and Section 36B of the Central Excise Act, 1944; this is borne out from the depositions made by the witnesses / panchas during cross examination; while creating and maintaining the said unauthentic private diaries/ loose sheets, no proper and reliable accounting methods have been followed; the said loose sheets and the documents pertain to several parties and are not maintained in a systematic manner so as to facilitate segregation with reference to any specific party; the pocket diary, note book and loose sheets do not contain any details to link the entries appearing therein with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ELT 81 (Tri.) Kuber Tobacco Products Pvt. Ltd. Vs Commissioner2015 (317) ELT A 159 (SC). Superior Steel Products Vs CCE1999 (109) ELT 712 CCE VsLaxmi Engineering Works2001 (134) ELT 811 Flevel International (P) Ltd. Vs CCE2016 (332) ELT 416 (Paras 51 to 55) CCE Vs Saakeen Alloys (P) Ltd 2014 (308) ELT 655 (Guj) Arya Fibres Pvt. Ltd. Vs CCE, Ahmedabad II2014 (311) ELT 529 (Tri. Ahmd.) 4.6. Learned Counsels submit that there is no evidence of procurement and consumption of excess raw-material; even if the allegations of production and clandestine removal of 26799.732 MT of finished excisable goodsis accepted for the sake of argument, it is obvious that for manufacture of aforesaid quantity of finished excisable goods the appellant would have required to procure and consume commensurate quantity of raw-materials likeSponge Iron,Pig Iron, Scrap, Coal etc; Revenue has nowhere made any attempt to calculate the raw material required to manufacture such a huge quantum of finished goods, leave alone adduce evidence of procurement of the same;there exists no positive, factual and legally sustainable evidence of clandestine receipt and consumption of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ects mentioned above, the demand of duty raised in the impugned SCN has no legal tenability and it is therefore, unsustainable in law. They rely on following cases. Ruby Chlorates (P) Ltd. v/s. CCE, Trichy 2006 (204) ELT 60 JagatpalPrem Chand Ltd. v/s. CCE, Delhi-II 2004 (178) ELT 792 (Tri.-Del.) Ghodavat Pan Masala Products Ltd.v/s. CCE, Pune2004 (175) ELT 182 Durga Trading Co. v/s. CCE2002 (148) ELT 967 (Tri.) upheld by SC in 2003 (157) ELT A315 (SC) Sharadha Forge Pvt. Ltd. v/s. CCE, Rajkot 2005 (179) ELT 336 Hyderabad Electrodes v/s. CCE, Hyderabad 2005 (191) ELT 1164 VigiromChem Pvt. Ltd. v/s. CCE, Bangalore2010 (251) ELT 544 (Tri.) Atlas Conductors v/s. CCE, Mumbai2008 (221) ELT 231 (Tri. Mum.) Ramji Dayawala v/s. Invest Import AIR 1981 (SC) 2085 Bareilly Electricity Supply v/s. The Workmen AIR 1972 (SC) 3030 Laxmi Engineering Works v/s. Commissioner2010 (254) ELT 205 (P H) UOI v/s. MSS Foods Products2011 (264) ELT 165 (M.P.) 5. Learned Authorised Representative for the department reiterates the findings in the Order-in-Original and further submits vide written submissions that: During the search o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During the physical verification of stock, shortage was found and the Director voluntarily deposited Rs.31,00,000/- in cash and Rs.6,50,000/- through debit in CENVAT Account. Learned counsel for the appellants though raised the question of proprietary of panch witnesses did not provide any proof to support the same; As held by the Constitutional Bench in the case of Poonam mal: 1974 (1) SCC (345), relevant evidences cannot be ignored on the ground that it is obtained by illegal search seizure. 6. Heard both sides and perused the records of the case. Brief issues concerning this case are as follows:- (i). whether in the facts and circumstances of the case, the Panchnama proceedings are vitiated for violation of procedure laid down under Section 100(3) Cr PC. (ii). whether prints out taken from the Hard Disk recovered in the premises of the alleged secret office (claimed to be a third party premises or godown) are acceptable as evidence?Whether the electronic and other evidence relied upon in the instant case is correctly obtained so as to have evidentiary value and stand judicial scrutiny? (iii). whether the statements relied upon in the impugned order are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wal, Director (on 04.12.2015 and 12/13.01.2016); Raj Jaiswal, Director (on 31.12.2015); Amit Jaiswal, nephew of Gyan Chand Jaiswal (on04.12.2015). 8. The appellants submit that Panchnama proceedings are vitiated inasmuch as the Panch witnesses and particularly Mr. BeerKarmakar has been repeatedly used by the investigating agency all over the places during their searches; the Panch witnesses are either interested parties or suitably tutored by the investigative agency. He submits that during the proceedings at the so-called secret office of the appellants which is basically a Cadbury / bournvita godown, none of the management or staff of Cadbury / bournvita was present; the mandatory search warrant was not shown or served to the holder of the premises; none of the representatives of appellants also were present during the search proceedings; Panch witnesses were made to sign the typed papers; Mr. BirKarmakar and Mr. BheemaLohar did not appear for cross-examination also; this shows to prove that the Panch witnesses were not independent; under the provisions of Section 100 (3) of CRPC and the case law enunciated by judicial pronouncements, the Panch witnesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tower, Opp; Saint Merry Church School, N Road, Bistpur, Jamshedpur, it is mentioned that after knocking the door of the office one Shri Vicky Kumar, Staff of M/s MCPL opened the door; it is not made clear as to how panchas knew it was Shri Vicky Kumar. Similarly, the Panchnama drawn at the godown of Cadbury/Bourn vita in the third para reveals that there second room at the right side was used as secret office by M/s MCPL; it is surprising as to how the Panch witnesses were aware of the fact; narration does not specify the same. In view of the above, it can be held that the proceedings are in contravention of the provisions of CRPC, we are in agreement with the Authorised Representative that in matters involving evasion of taxes, it would be sufficient if the documents recovered during the search do otherwise constitute reliable evidence. However, under the circumstances, the evidence put forth requires to be weighed in the facts and circumstances of the case and in juxtaposition with the corroborative evidence. A harmonious construction of the ratio of various judicial pronouncements cited by the learned adjudicating authority would mean to say that the evidence collected cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icro film of a document or the reproduction of the image or images embodied in such micro film (whether enlarged or not); or (b) a facsimile copy of a document; or (c) a statement contained in a document and included in a printed material produced by a computer (hereinafter referred to as a computer printout ), if the conditions mentioned in sub-section (2) and the other provisions contained in this section are satisfied in relation to the statement and the computer in question, shall be deemed to be also a document for the purposes of this Act and the rules made thereunder and shall be admissible in any proceedings thereunder, without further proof or production of the original, as evidence of any contents of the original or of any fact stated therein of which direct evidence would be admissible. (2) The conditions referred to in sub-section (1) in respect of a computer printout shall be the following, namely:- (a) the computer printout containing the statement was produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period by the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice or the management of the relevant activities (whichever is appropriate) shall be evidence of any matter stated in the certificate; and for the purposes of this sub-section it shall be sufficient for a matter to be stated to the best of the knowledge and belief of the person stating it. (5) For the purposes of this section, - (a) information shall be taken to be supplied to a computer if it is supplied thereto in any appropriate form and whether it is so supplied directly or (with or without human intervention) by means of any appropriate equipment; (b) whether in the course of activities carried on by any official, information is supplied with a view to its being stored or processed for the purposes of those activities by a computer operated otherwise than in the course of those activities, that information, if duly supplied to that computer, shall be taken to be supplied to it in the course of those activities; (c) a document shall be taken to have been produced by a computer whether it was produced by it directly or (with or without human intervention) by means of any appropriate equipment. Explanation. - For the purposes of this section, - (a) comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicating authority did not conduct any counter check; it was simply held that the deposition in the course of cross examination was tutored; this allegation can stick to the initial statements also. Only the tutors could be different. We find that the appellants claim that the external hard disc recovered from the personal possession of Shri Vicky Kumar does not even qualify to be described as Computer printout within the meaning of the term computer printout as used in Section 36B of the Act. But the fact remains that is electronic media and the printouts taken from the hard disc, though in the presence of Shri Vicky Kumar and panchas. We are of the considered opinion that the rigours of section 36(B)ibid are also applicable to evidence contained in the Hard Disc as the data in Hard Disc is evidence stored in electronic form. The spirit of Section 36(B) is violated. Nothing would have stopped the agency to seal the Hard Disc, take a certificate from the owner and to send it for aforensic examination. Procedural infirmities in taking the printout have added to the violations of the provisions of Section 100 of CrPC. We find that Tribunal in the case of S.N. Agrotech 2018 (361) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord under the Evidence Act; in view of Sections 59 and 65A, can be proved only in accordance with the procedure prescribed under Section 65B . - Section 65B deals with the admissibility of the electronic record. The purpose of these provisions is to sanctify secondary evidence in electronic form, generated by a computer. It may be noted that the section starts with a non obstante clause. Thus, notwithstanding anything contained in the Evidence Act, any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer shall be deemed to be a document only if the conditions mentioned under sub-section (2) are satisfied, without further proof or production of the original. 15. 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 certif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided the evidence collected is corroborated by other evidence. 14. We proceed to examine the same. The impugned order relies heavily on the computer printouts and the diaries resumed from the residence of the Director and office premises and the statements of different personnel of the appellants. The appellants submit that the statement of Mr. Vicky Kumar is sketchy and does not reflect the true picture; Mr. Vicky Kumar on the one hand says that he has been working with the company for last 3-4 months but confirms the data recovered from the hard disc covering a period of more than 4 5 years for which he does not have any authority or competence or locus standi; he himself stated categorically that he attended the data entry work from September 2015 only; his claim of receipt of hard disc from one Shri sheker was not questioned or claimed either by the investigating agency or by the Commissioner; the retraction of the statement dated 4.12.2015, by Mr. Vicky Kumar, during the cross-examination was not rebutted by the learned Commissioner. Regarding the other documentary evidence, the appellants submit that the diary from the residence of the Director was seized without men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s such, in case of clandestine activities involving a longer period, say for five years, though the details of clandestine activities may be found stored in any electronic device for the entire period, the corresponding hard documents may be found and recovered for a limited. period only. As such, the investigating officers would be able to lay hands on only those evidences that shall be left in spite of the best care taken by the person involved in such clandestine activity. 16. We find that the argument of the learned Commissioner is not correct. It is not for the appellant-noticees to disprove the clandestine removal and evasion. It is for the investigating agency to gather evidence and it is for the adjudicating authority to appreciate the evidence and confirm the demand of tax. We find that as submitted by the appellants, charge of suppression of production and clandestine removal is a serious charge which is required to be established by production of sufficient tangible and positive corroborative evidence of clandestine manufacture and clearance and not merely on the basis of inferences and assumptions. In the instant case of the appellant the entire demand of duty has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... weight it should be attached to the same. The Apex Court in NagubaiAmmal and Others v. B. Shama Rao Others reported in AIR 1956 SC 593 had ruled that an admission is not conclusive as to the truth of the matters stated therein. It is only a piece of evidence, the weight to be attached to which matters depend on the circumstances under which it is made . It was further held that it must be shown that there is a clear and unambiguous statement such as will be conclusive, unless explained. .. 52. Even assuming that the documents disclosed certain entries that by itself is not sufficient to contend that the same necessarily relate to the clandestine removal of the goods. As rightly pointed out by the Senior Advocate for the appellants that Hisaba Book makes reference to various firms and persons as the buyers of the quantity mentioned therein. However, there was no attempt to record any statement of any such person at all. Contention was sought to be raised that the names were fictitious and attempt to locate did not yield fruitful result. In fact, there is no material to support this contention. Besides, the statement recorded of the appellants Director discloses the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elies entirely on the same instead of giving his own findings and comments on appreciating the facts. The copy of the same was also not given. Under these circumstances we need to evaluate the evidence, by the available corroborative evidence. 18. Further the appellants submit that the allegation of clandestine removal is a serious charge and it needs to be proved with adequate corroborative and independently reliable evidence in regard to installed capacity of production, procurement/purchase and utilization of various raw-materials required for the manufacture of the finished excisable goods, labour employed, power consumed, transportation, sale and receipt of finished goods sold to buyers, accounting of sold goods in the books of account of the buyers; and, realisation of sale proceeds from the buyers etc.; no evidence of procurement and consumption of excess raw material, excess consumption of electricity and excess deployment of labour have been placed on record; no evidence to show surplus production and stock of finished products has been put on record and no single removal without payment of duty has been established and therefore, the charge of clandestine removal ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eared on payment of duty (g) Statements of buyers with some details of illicit manufacture and clearance; (h) Proof of actual transportation of goods, cleared without payment of duty (i) Links between the documents recovered during the search and activities being carried on in the factory of production, etc. 20. We agree, prima facie, with the proposition of the learned Commissioner that the department is not required to prove clandestine removal by mathematical precision. However, the instant case, we find that not even single evidence has been brought on record to show clandestine removal, conclusively establishing at least by way of sample transaction. We also find that no commensurate discrepancy in the finished stocks and raw material was found. The discrepancies found, adopting a method of averaging, were nominal and explainable. The allegation is about clandestine removal of a huge quantity of 26799.732 MT valued at Rs 97.13 Cr. To prove evasion of such magnitude, the department should have established the purchase of raw material, consumption of electricity, deployment of labour, arrangement of transportation, receipt at the customers end and financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the facts in issue. In grave cases like forgery, fraud, conspiracy, misappropriation, etc. seldom direct evidence would be available. Only the circumstantial evidence would furnish the proof. There must be evidence direct or circumstantial to deduce necessary inferences in proof of the facts in issue. There can be no inferences unless thereare objective facts, direct or circumstantial from which to infer the other fact which it is sought to establish. The standard of proof is not proof beyond reasonable doubt 'but' the preponderance of probabilities tending to draw an inference that the fact must be more probable. Standard of proof cannot be put in a strait jacket formula. No mathematical formula could be laid on degree of proof. The probative value could be gauged from facts anti circumstances in a given case. The standard of proof is the same both in civil cases and domestic enquiries. 22. As per our discussion above, we find that the standard of proof in taxation cases is different from criminal offences. It is now settled principle that cases of this nature need not be proved with mathematical precision. At the same time, a single piece of evidence cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty demand for the period 1.4.2011 to 30.11.2015, the so-called corroboration from other documents/ evidences, is not however, forthcoming. As per the records of the case, seized Documents like note books / note pads (allegedly contain details like buyers name, date, amount received and expenditure incurred in cash) have details for the period June, 2015 and July, 2015; diary seized from the residence (allegedly containing details like parties name, date, amount received, and other transactions) pertain to the period from Apr, 2015 to July, 2015 and the data available from the hard disc from the alleged secret office and the data recovered from office premises contains data for the period 1.4.2011 to 30.11.2015. However, in addition to the disputable manner of collection of evidence, the concerned persons who have been alleged to have been maintaining such records have not been questioned. The handwritings thereof have not been identified/ established. Procurement of raw materials, consumption of labour, manufacture, removal and realisation of sale proceeds in a clandestine manner has not been established even by a sample case. Sad part is that, the investigation did not deem it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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