TMI Blog2024 (1) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... the computer was not shown to have been used regularly to store or process information for the purposes of any activities regularly carried on by the appellants. It was also not shown that information of the kind contained in the computer printout was regularly supplied by the appellant to the computer in the ordinary course of activities. Again, it was not shown that, during the relevant period, the computer was operating in the above manner properly. The above provision also casts a burden on that party, who wants to rely on the computer printout, to show that the information contained in the printout had been supplied to the computer in the ordinary course of business of the company. We find that none of these conditions was satisfied by the Revenue in this case. In the present case, the data was not stored in the computer but the officers had taken the printout from the Hard Disk drive by connecting to the computer. The officers had not obtained any certificate as required under Section 36B of the said Act. It is also noted that none of the conditions under Section 36B(2) of the Act, 1944 was observed. The provisions of Section 65B of Indian Evidence Act and Section 36B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order cannot be sustained and accordingly the same is set aside - Appeal allowed. - HON BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) And HON BLE MR. RAJU, MEMBER (TECHNICAL) Shri Paresh Sheth Advocate for the Appellant Shri Prabhat K. Rameshwaram, Addl. Commissioner for the Respondent ORDER RAMESH NAIR : The above stated appeals are arising out of Order-in-Original No. RAJ-EXCUS-000-PR. COM-24-16-17 dated 11-08-2016 passed by Principal Commissioner of Central Excise Service Tax, Rajkot. Since all the above stated appeals are arising out of a common order-in-original, they are taken together for decision. 2. The brief facts of the case are that M/s. Global Extrusion Pvt. Ltd. (M/s Global) are engaged in the manufacture of the Brass Products viz., Billets, Rods, Wires, Profiles, Sections, etc. On the basis of intelligence, the factory premises of M/s Global were searched by the officers of Anti-evasion team, Rajkot Commissionerate and various incriminating documents were seized under Panchanama dated 19/20.03.2013. A simultaneous search was also carried out at the residential premises of Shri Dhirubhai Chhaganbhai Bhanderi (Patel), Accountant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , cop rod, cop sec, cop sheet etc. The allegation of the department is that the appellant has clandestinely cleared its final products to the tune of Rs. 1,16,62,35,922/- involving 34,64,318.820 Kgs. of various brass products. This allegation is made without producing any corroborative evidences like transport documents, financial flow back, financial transactions etc. Admittedly no difference was noticed in the stock of raw materials or final product in the factory premises during such visit except so called difference of 550 Kg. of billets in comparison of stocks recorded in statutory records. The officers concerned had not physically verified stock or weighed the stock of billets but had decided the difference on their own estimates. 4. He also submits that admittedly on 19/20.03.2013 preventive officers from Central Excise Department visited factory premises and showed Search Warrant for the said premises and during the course of search proceedings recovered one piece of paper marked as New and one Javak Chithi in favour of M/s Jyoti Cutting and on inquiry as stated in the panchnama, director informed the other chithis were with accountant Shri Dhirubhai who also writes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. He also argued that admittedly the department has not produced any corroborative evidences to prove that the appellant has manufactured such huge quantity of final product and clandestinely cleared the same. Department has not produced any evidence of procurement of material and manufacturing of final products as per law laid down by various courts. 7. He further submits that appellant had raised various grounds before the Ld. Adjudicating authority including the ground of reliability and admissibility of computer print out as an evidence in terms of Section 36B of Central Excise Act as also various case laws but the Ld. Commissioner has not properly considered the submission and relevant case laws referred. 8. He also submits that in the present matter Ld. Commissioner ignored the provisions of Section 9D of the Act. Unless the statement are tested by way of examination as required under Section 9D, it cannot be relied upon. He placed reliance on the decisions in the case of M/s Jai Balaji Industries Ltd. 2023-8-TMI-989. 9. He further submits that department has relied upon the statement of Shri Manharbhai Prop. Of M/s Chamunda Metals industries that he has admitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een worked out that during the period from 2010-11 to 2012-13, appellant have cleared finished goods without payment of duty amounting to Rs. 13,06,55,760/-. The directors of the Appellant firm have admitted and confessed that the details mentioned in documentary evidence are with regard to clandestine removal of finished goods. The clandestine removal was further corroborated by the buyer and supplier of raw materials. 13. He further submits that the investigation conducted, have revealed without any doubt, that Appellant had manufactured their finished goods out of raw materials purchased without invoices/bills and subsequently, the same were cleared to various buyers. After accepting their liability of central excise duty in respect of such clandestinely cleared finished goods appellant had paid central excise duty of Rs. 89,50,000/- . 14. He also submits that during the investigation of the case, Shri Bhageshbhai Jayantibhai Chanderia, Director in his statement has admitted that wherever JOB is written against entry under heading Name of Buyer , it means that entry pertains to job works done by them. However, after confronting with such entries and asked to prove that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he records. We have carefully gone through the records, grounds of appeals and submissions of parties and finding of the impugned order and various case laws cited by both the parties. We find that the whole case is made out by the revenue on the basis of computer printouts and this is evident from the Panchanama dated 19/20.03.2013. The computer printouts were taken from the electronics devices viz. external hard disk and Laptop which were recovered from the Flat No. 102, Prince Palace Apartment, Jamnagar. Further on 11.06.2015 under panchanam the department has opened the Laptop HP Compaq nc 6000 (Sr. No. CNU5201M3G) and hard disc Store Jet Transcend -250GB (red Colour) which were seized under Panchanama dated 19/20.03.2013 and derived computer print outs. The adjudicating authority observed that the said evidence was retrieved from the computer and hard disk and the authenticity of all the printouts was admitted by directors of the appellant in their statements. The appellant disputed the veracity and authenticity of the evidences, collected through electronic devices. With regard to reliance on the computerized print out appellants here has objected the mode of reliance for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion during that part of that period was not such as to affect the production of the document or the accuracy of the contents; and (d) the information contained in the statement reproduced or is derived from information supplied to the computer in the ordinary course of the said activities. (3) Where over any period, the function of storing or processing information for the purposes of any activities regularly carried on over that period as mentioned in clause (a) of sub-section (2) was regularly performed by computers, whether (a) by a combination of computers operating over that period; or (b) by different computers operating in succession over that period; or (c) by different combinations of computers operating in succession over that period; or (d) in any other manner involving the successive operation over that period, in whatever order, of one or more computers and one or more combinations of computers, all the computers used for that purpose during that period shall be treated for the purposes of this section as constituting a single computer; and references in this section to a computer shall be construed accordingly. (4) In any pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intouts. In the present matter the computer was not shown to have been used regularly to store or process information for the purposes of any activities regularly carried on by the appellants. It was also not shown that information of the kind contained in the computer printout was regularly supplied by the appellant to the computer in the ordinary course of activities. Again, it was not shown that, during the relevant period, the computer was operating in the above manner properly. The above provision also casts a burden on that party, who wants to rely on the computer printout, to show that the information contained in the printout had been supplied to the computer in the ordinary course of business of the company. We find that none of these conditions was satisfied by the Revenue in this case. In the present case, the data was not stored in the computer but the officers had taken the printout from the Hard Disk drive by connecting to the computer. The officers had not obtained any certificate as required under Section36B of the said Act. It is also noted that none of the conditions under Section 36B(2) of the Act, 1944 was observed. In such situation, it is difficult to accept t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der 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. 16. 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 the electronic record like computer printout, compact disc (CD), video compact disc (VCD), pen drive, etc., pertaining to which a statement is sought to be given in evidence, when the same is produced in evidence. All these safeguards are taken to ensure the source and authenticity, which are the two hallmarks pertaining to electronic record sought to be used as evidence. Electronic records being more susceptible to tampering, alteration, transposition, excision, etc., without such safeguards, the whole trial based on proof of electronic records can lead to travesty of justice. 17. Only if the electronic record, is duly produced in terms of Section 65B of the Evidence Act, would the question arise as to the genuineness thereof and in that situation, resort can be made to Section 45A - opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section36B of Central Excise Act, 1944 of the Act are pari-materia. It is evident from the panchanama, and the appeals records that the investigating officer had failed to follow the safeguard as mandated under Section36B of the Act. We have also considered the judgment of M/s. Popular Paints Chemicals v. C.C.Ex. Cus., Raipur, wherein Tribunal vide Final Order Nos. 52716-52718/2018, dated 6-8-2018 under similar facts and circumstances has set aside the demand based on such unauthenticated data and judgment of Ambica Organics vs. Commissioner of C.Ex. Cus., Surat -2016(334) ELT 97 (Tri. Ahmd), affirmed by Hon ble Gujarat High Court in 2016(334)ELT A67 (Gujarat High Court). 21. We also find that in the present matter appellants disputed the finding of the Ld. Commissioner on the ground that Ld. Commissioner has relied upon the statements of persons, but these statements are not admissible as evidence because the statement of various persons that the same were recorded on computer on already prepared proforma which is stereo typed. In case of raw materials suppliers and buyers statements, in most of case the questions are same and even the answers also same. At the some pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruling of the Hon ble Punjab Haryana High Court in the case of Jindal Drugs (Infra),2016 (340) E.L.T. 67 (P H) wherein the Hon ble High Court laid down the detailed procedure, inter alia, providing for cross-examination of the witness of the Revenue by the Adjudicating Authority and thereafter, if the Adjudicating Authority is satisfied that the statement of the witness is admissible in evidence than the Adjudicating Authority is obligated to offer such witnesses for cross-examination by the other side/assessee. Such view has also been affirmed by the Hon ble Supreme Court in the case of Andaman Timber (Infra) - 2015 (324) E.L.T. 641 (S.C.) = 2017 (50) S.T.R. 93 (S.C.). 22. We further find that Hon ble Punjab Haryana High Court in the case of Sukhwant Singh - (1995) 3 SCC 367 has observed as under:- 8. It will be pertinent at this stage to refer to Section 138 of the Evidence Act which provides : 138. Order of examinations. - Witnesses shall be first examined-in-chief then (if the adverse party so desires) cross-examined, then (if the party calling him so desires) re-examined. The examination and cross-examination must relate to relevant facts but the cross-exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt evidence. CESTAT in the case of Sober Plastic Pvt. Ltd. v. CCE [2002 (139) E.L.T. 562 (T)] has held that demand based on weighment slips, slips recovered from Dharamkanta etc. relied upon for raising demand not verified with reference to transactions is not sustainable. Further, it is settled position of law that proof and evidence of purchase of raw materials and sell of final product clandestinely is necessary to establish the allegation of suppression of production and clandestine removal of goods and that the allegation are to be proved with affirmative evidences. CEGAT in case of Emmtex Synthetics Ltd. v. CCE [2003 (151) E.L.T. 170 (Tri.) has held that the charge of clandestine removal has to be established by the revenue by adducing tangible, convincing and cogent evidences, CESTAT in the case of Esvee Polymers (P) Ltd. v. CCE [2004 (165) E.L.T. 291 (Tri.)] dealt with a case of alleged clandestine production and clandestine removal. The case was based on some private slips. The CESTAT observed that the mere slips or statement are not sufficient for confirmation of demand and allegation of clandestine removal. Evidence in the form of receipt of raw material, shortages there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice that in the present matter there is no supportive evidence found by the revenue with regard to receipt of inputs, place from where inputs are purchased, nor there is shortage of inputs as per raw material accounts, electricity consumption have not been challenged to show that there was excess consumption. Further production capacity of the appellant not challenged by the revenue. It became apparent that the department has not led any corroborative evidence to support the allegations of clandestine clearance. There is no evidence regarding procurement of raw material, transportation of raw material, payment for unaccounted raw material and its transportation to sustain the allegation of clandestine manufacture and removal by the appellant. No evidence has been led by the Department to show that the appellant had sufficient production capacity to produce the quantity of goods alleged to have been produced clandestinely. There is no allegation that the appellant has shown excess production of goods. There is no evidence regarding excess consumption of electricity. No unaccounted cash has been recovered from the unit of the appellant during the search. No evidence has been found ..... X X X X Extracts X X X X X X X X Extracts X X X X
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