9911796707
TMI Blog2025 (5) TMI 1626X X X X Extracts X X X X X X X X Extracts X X X X ..... amended by Notification No.09/2004 dated 08.01.2004 in respect of goods imported in various firms/companies created in the name of his relatives, employees and business partners and being controlled/managed by the Appellant No.(1). Name of said firms are as below : (i) Tirupati Overseas (ii) NeelKanth Enterprises (iii) Saraswati Enterprises (iv) Bhagwati Enterprises (v) M/s Jain Impex (vi) M/s Cosmic Enterprises (vii) M/s Radhe Tradelinks (viii) M/s Sovitec International (ix) M/s Jain Prints (x) M/s Evershine Industries (xi) M/s Emm Kay Associates (xii) M/s Pragati Enterprises 2.1 It is pertinent to mention here that M/s Jain Impex is proprietorship firm of the Appellant No.(1) himself. M/s Cosmic Enterprises, M/s Jain Prints, and M/s Sovitec International are also Proprietorship/partnership firms of family members (son/nephew) of Appellant No.(1). 2.2 Searches were conducted by DRI Officers at the premises of Appellant on 01.08.2007 and various other premises. During searches at premises of Appellant CPU, several note books/diary, files containing import documents pertaining to some of the above firms, blank cheque pertaining to some of the above firms e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with personal penalty. 2.7 Aggrieved from the said order, the appellants are in appeal before us. 3. The ld.Counsel for the appellants submits as under : (i) The allegation of violation of condition of Notification No. 25/1999 has been made on the basis of visits/searches conducted by the DRI Officers at premises of concerned firms availing the said benefit wherein, as per the department, it was found that no manufacturing activities were going on, neither were there any plant and machinery to manufacture the required goods by using imported goods. (ii) The allegation of customs duty evasion on account of undervaluation has been made on the basis of certain entries found in the notebook/diary resumed from premises of Appellant which were explained by him during recording of his statements by DRI during investigation. It is pertinent to mention that the entire demand has been raised and confirmed on the basis of entries alleged to have been mentioned in the diary/note book resumed from the premises of Appellant in relation to only eleven bills of entry. The same have been made applicable to all the Bills of Entries pertaining to all the firms without any independent corroborat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his Chinese buyers in order to save customs duty likely to incur by his buyers in China. It has been further alleged that differential amount in relation to his exports to his Chinese buyers were being paid to the suppliers of Appellant (Sh. P. C. Jain) towards differential amount in respect of imports made by the Appellant No.(1) in different firms and equivalent payment in Indian currency used to be made by the Appellant No.(1) to Sh. D. P. Jain here in India. It is pertinent to mention that neither any documentary evidence regarding remittance of differential amount in respect of imported goods has been adduced by the department in the SCN, nor have there been any discussion of any such evidence in the Impugned Order. All the allegations are based on statements. (vii) The show cause notice was issued without RUDs. So request to provide RUDs were made vide letter dated 07.10.2010. Several reminder requests were also made by the Appellant No.(1). However, without providing documents, hearing notices were issued to the Appellant No.(1) in January, 2012. (viii) The Appellant No.(1) along with his son Gaurav Jain and nephew Sh. Rajesh Jain approached the Hon'ble High Court o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on account of violation of condition of Notification No.25/1999 as well as in respect of the allegation of undervaluation and other allegations made on the basis of entries in diary resumed from premises of Appellant No.(1). (xiii) The appellant, in response to subsequent hearing notices issued by the Adjudicating Authority, inter alia, submitted that they are unable to prepare defence reply without having aforesaid RUDs and also that not providing the same is clear violation of Hon'ble High Court's directions. However, the personal hearing was further fixed on 25.09.2024 with an intimation that the case shall be adjudicated on the basis of RUDs which were already provided to the appellant. The appellant, in response, vide letter dated 21.09.2024, inter alia, requesting for documents as earlier sought, also requested for cross-examination of persons whose statements have been relied upon in the show cause notice to make allegation against them so that they could get chance to bring out the truth. (xiv) However, the adjudication order has been passed without allowing cross-examination and without giving requested RUDs by observing that the appellant herein is just atte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o so", in our opinion, does not enable the Department to defer the determination of the notices for an indeterminate period of time. The legislature in its wisdom has provided a specific period for the authority to discharge its functions. The indifference of the concerned officer to complete the adjudication within the time period as mandated, cannot be condoned to the detriment of the assessee. Such indifference is not only detrimental to the interest of the taxpayer but also to the exchequer." (xviii) He also relied on the judgment of this Tribunal in case of Kopertek Metals (P) Ltd. Vs. Commissioner of CGST (West), New Delhi reported in (2025) 29 Centax 28 (Tri-Delhi), wherein, the CESTAT, by following the judgment in case of Swatch Group of Delhi High Court (supra), decided 209 appeals by setting aside the adjudication orders passed beyond the period stipulated in sub-section (11) of section 11A of the Central Excise Act (which is pari materia to unamended Section 28 (9) of the Customs Act). (xix) He also submits that the Kolkata Bench of this Tribunal also, in case of M/S Redtech Network India Pvt. Ltd Vs. Commissioner of Service Tax, Kolkata, in a service tax matter, by fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of time "where it is possible to do so" cannot be countenanced as a license to keep matters unresolved for years. The flexibility which the statute confers is not liable to be construed as sanctioning lethargy or indolence." It further held, in para, 86, ".... The inaction and the state of inertia which prevailed thus leads us to the inevitable conclusion that the respondents clearly failed to discharge their obligation within a reasonable time. The issuance of innumerable notices would also not absolve the respondents of their statutory obligation to proceed with promptitude bearing in mind the overarching obligation of ensuring that disputes are resolved in a timely manner and not permitted to fester. Insofar as the assertion of the assessees' seeking repeated adjournments or failing to cooperate in the proceedings, it may only be noted that nothing prevented the respondents from proceeding ex parte or refusing to reject such requests if considered lacking in bona fides." (xxii) He submitted that the Adjudication Order has been passed by relying upon statements without complying with statutory requirements of Section 138B of the Customs Act, 1962. The entire liability of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1872. As far as printouts taken from CPU and email are concerned, it is a settled position of law that such printouts are not admissible as evidence without complying with statutory requirements of Section 65B of the Evidence Act read with Section 138C of the Customs Act. DRI, in the instant case, seized a CPU from the house of the appellant during the search conducted on 01.08.2007. The CPU was examined and data was retrieved vide panchnama dated 02.08.2007 but without complying with Section 138C of the Customs Act read with Section 65B of the Evidence Act. In the show cause notice it has been stated that the CPU corroborates the fact that 25000 pieces of VCD, 50,000 pieces of DVD remote and 28000 pieces of VCD lens were purchased by the appellant vide Invoice No. SG/724/06/2007 and the actual value of these goods was USD 85137.25. The retrieved documents from the CPU also appears to indicates that 72,000 pieces of VCD pick up were purchased vide Invoice No. 12233062007 and the actual value of the goods was USD 143721.55. It also indicates that 28,000 pieces of DVD pick up (ASA), 20,000 pieces of DVD pic up (OSCAR), 18,200 pieces of DVD tray and 94,000 pieces of VCD tray wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIR 2020 SC 4908. Reliance in this regard, is also placed upon the order of Principal Bench of Delhi CESTAT in the case of Trikoot Iron and Steel Casting Ltd., vs. Additional Director General (Adjudication), Directorate General of GST Intelligence, [2024 (10) TMI 672-CESTAT-New Delhi). Reliance is also placed upon the case of Jeen Bhavani International and Mahesh Chandra Sharma Vs. Commissioner of Customs, Nhava Sheva III reported in 2022 (8) TMI 237-CESTAT, Mumbai which has been upheld by the Hon'ble Supreme Court vide order dated 27.02.2023. Further, reliance is also placed upon the case of S.N. Agrotech Vs. Commissioner of Customs, New Delhi reported in 2018 (361) ELT 761 (Tri-Del.). (xxxi) He further submitted that the explanation given in the statement of Appellant No.(1) with respect to diary cannot be relied upon. As far as entries stated to have been explained by the appellant in note book are concerned, same also cannot be relied upon as initial statements of Appellant No.(1) recorded by DRI officers have been retracted and he had been forced to make huge payments towards alleged liability of all the firms and was threatened to be arrested if he goes against the wish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cient evidence to charge any person with liability. Reliance is also placed upon the case of Surya Wires Pvt. Ltd. Vs. Principal Commissioner, CGST [Excise Appeal No. 51148 of 2020-Final Order Nos.50453-50454/2025 dated 01.04.2025], wherein, this Tribunal, with respect to demand raised on the basis of explanation given in statements regarding entries made in incriminating documents resumed during search, held that, "the adjudicating authority while recording the finding on loose papers has placed reliance upon the statement of Harsh Agrawal made during the inquiry/investigation under section 14D of the Customs Act. The procedure contemplated under section 9D of the Central Excise Act was not followed and, therefore, no reliance can be placed on the statement of Harsh Agrawal in connection with loose papers recovered from the factory premises of the appellant". (xxxv) In any case, he submitted that it is a settled position of law that each import is an assessment by itself and if there are a hundred imports at different transaction values, duty on each import must be determined based on the transaction value of that import. If the transaction value is higher in any one case, that, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a person who has filed bill of entry came be held as importer and the demand of differential duty other than the said person who has filed bills of entry is not sustainable. It is fact on record that the persons whose firms have been alleged to have been controlled operated by the Appellant No.(1), themselves applied for IEC. opened bank accounts, did excise formality etc. and signed respective documents. The manufacturers with buyers of imported goods and suppliers of imported goods have been done through proper banking channel. The fact is that said persons were being helped by the Appellant No.(1) because of being in same trade and having experience. The same cannot be attributed against the Appellant No.(1) herein, Reliance is placed upon Nalin Z Mehta va. Commissioner of Customs, Ahmedabad -2014 (303) ELT 267 (Tri. Ahmd.). Brij Mohan Sood v Commissioner of Customs, Kandla[2007 (217) ELT 570(Tri- Ahd)). Chaudhary International v. CC. Bombay - 1999 (109) ELT. 371, JB Trading Corporation v. UOI-1990 (45) EL.T. 9 (Mad), Ashwin Doshi v. CCE, Goa-2004 (173) ELT. 488. (xxxix) Further he submitted that the allegation of mis-use of Notification No.25/99-Cus is not sustainable and he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a had stated that they have been purchasing CD Deck mechanism and remote control from M/s Bhagwati Enterprises. This also proves that the above said firms have been manufacturing finished goods and the allegations of mis-use of Customs Notification No.25/1999 is fabricated. (xxxxii) The entire allegation has been made only on the ground that during search on 1.8.2007 of the premises of the manufacturers, no manufacturing facility was found in their premises and based on the statements of the Appellant and co notices recorded under duress. In this regard, it may be relevant to note that the Appellant and other manufacturers had surrendered their Registration and stopped manufacturing in 2006 long before the present investigation has been initiated which is evident from the following facts: (i) M/s Sarswati Enterprises vide letter dated 19.06.2006 addressed to the Assistant Commissioner, Central Excise, Division IV surrendered the Central Excise registration. (ii) M/s Tirupati Overseas vide letter dated 20.09.2005 addressed to the Assistant Commissioner, Central Excise, Division IV surrendered the Central Excise registration and informed about closure of the factory w.e.f. 05.09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in various firms (alleged to have been controlled/managed by the Appellant) has been mis- declared. (xxxxv) Again, he contended that the entire allegation of under-valuation has been made on the basis of statements of the Appellant and partners/owners of various firms as stated above and on the basis of some of the noting in the diary and CPU recovered from the residence of the Appellant. It has already been explained above that neither said statements can be relied upon, nor said documents retrieved from CPU and e-mail or entries found in note book, can be relied upon. Moreover, as stated above, Appellant retracted from his statements vide letter dated 03.08.2007. It is settled position in law that statements recorded under pressure and coercion have no evidentiary value and retracted statements are not reliable evidence. The Appellant in this regard relies upon the case of Mohtesham Mohd. Ismail vs Spl Director, Enforcement Directorate [[2007 (220) ELT 3 (S.C.)], Vinod Solanki vs UOI [2009 (233) ELT 157(SC)). (xxxxvi) He further contended that without prejudice to above, re-determination of value to confirm the duty in the instant case. has been done arbitrarily and without fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emporaneous import at higher price. There is catena of case law where the Hon'ble Apex Court and Tribunals holding that allegation of undervaluation has to be supported by price of contemporaneous imports. Reliance in this regard is placed on the following decisions: Commissioner of Customs, Calcutta vs South India Television (P) Ltd [2007 (214) ELT3(SC), Century Metal Recycling Pvt Ltd vs UOI [2019 (367) ELT 3 (SC), Commissioner of Customs, Vishakhapatnam vs Aggarwal Industries Ltd [2011 (272) ELT 641 (SC), Agarwal Metals and Alloys vs Commissioner of Customs, Kandla [2021 (378) ELT 155 (Tri-Ahd)], Savaram D. Patel vs Commissioner of Customs, Ahmedabad [2014 (312) ELT 193 (Tri-Ahd, Commissioner of Customs (Imports), Mumbai vs Ganpati Overseas [2023 (10) TMI (364)]. (xxxxx) Further, he submitted that without prejudice to the above, it is pertinent to mention that the Appellant No.(1) has also stated about certain entries in note book/diary to be actual sale price of imported goods. If the value redetermined by the department is taken to be correct, the sale price calculated on the basis of said value would be much higher than the actual sale price of the respective goods as ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for self-assessment. Customs at the port of import examined the goods before granting 'out of charge' with reference to quantity and quality of the goods declared in the invoice. By no chance, Appellant No.(1) could import increased quantity of goods escaping notice of Customs Authority. It is beyond comprehension as to how it is possible to mis declare quantity of goods. DRI has redetermined value with reference to the enhanced quantity which is blatantly incorrect. (xxxxxiii) He further submitted that the penalties imposed on the Appellants are also not sustainable. The Appellant No.(1) not being the importer can not be held liable to pay differential duty. Hence, imposition of penalty under 114A is not sustainable. It may be noted that in the Twenty Seventh Report of the Standing Committee of Finance, the legislative intention behind insertion of Section 114AA was discussed. The Ministry of Finance has clarified that the purpose is to punish those people who avail export benefits without exporting anything. It is thus, submitted that section 114AA has been introduced to counter serious frauds not every kind of violations under Customs Act. In any case, when main demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of investigation, CPU, several note books/diary, files containing import documents pertaining to the above firms, blank cheque, were resumed from the Appellant No.(1) and certain documents were retrieved from the said CPU and e-mail account of son of the Appellant No.(1). 6.2 Further, during the course of investigation, the statement of the appellants were recorded and on the basis of these statements, a case has been made out against the appellants of undervaluation of the imported goods and to deny the Notification No.25/1999 - CUS dated 28.02.1999 as amended by Notification No.09/2004 dated 08.01.2004. 6.3 For better appreciation of facts to avail the benefit of the said Notification, the Appellant No.(1) was required to follow the procedure as laid down in Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996, the relevant portion of the said Rules are incorporated herein below : "(2) These rules shall also apply even if the excisable goods in or in relation to the manufacture of which the imported goods are used are not chargeable to excise duty or are exempted from whole of excise duty. RULE 3. Registration. - (1) A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e importer has filed the application in respect of his estimated requirement for a quarter, the said [Assistant Commissioner of Customs or Deputy Commissioner of Customs] shall debit in the said application, the quantity and value of imports made under a particular consignment, also indicating particulars of the bill of entry, before allowing the benefit of the exemption notification to the importer.] (2) The [Assistant Commissioner of Customs or Deputy Commissioner of Customs] shall forward a copy of the bill of entry containing the particulars of import, the amount of duty paid and other relevant particulars to the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise. RULE 6. Procedure to be followed by the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise]. - The [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] shall acknowledge the receipt of the intimation received from the [Assistant Commissioner of Customs or Deputy Commissioner of Customs]. RULE 7. Manufacturer to give information regarding receipt of the imported goods and maintain records. - The manufacturer, obtaini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ify therein that the manufacturer is registered in his office and has executed a bond to his satisfaction in respect of end use of the imported goods in the manufacturer's factory and indicate the particulars of such bond. On the basis of the application countersigned by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, the Assistant Commissioner of Customs or Deputy Commissioner of Customs at the port of importation shall allow the benefit of the exemption notification to the importer. Thereafter, the Assistant Commissioner of Customs or Deputy Commissioner of Customs shall forward a copy of the bill of entry containing the particulars of import, the amount of duty paid and other relevant particulars to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise. Thereafter, The Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise shall acknowledge the receipt of the intimation received from the Assistant Commissioner of Customs or Deputy Commissioner of Customs Thereafter, the manufacturer/importer shall give information of the receipt of the imported goods in his factory, within two days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be said that the benefit of Notification No.25/1999 - CUS dated 28.02.1999 as amended by Notification No.09/2004 dated 08.01.2004, can be denied to the appellants merely on the basis that the appellants were non-existent. Therefore, the allegation that the appellants were having no manufacturing on the said premises at the time of search, is not sustainable. 6.5 Further, as per the appellant, the RUD-29, which was not supplied to the appellants, was related to import on the basis of records obtained from the various jurisdictional Central Excise Authorities. The said documents has not been placed on record by the Revenue. The said documents could have established the case of the appellants that whether they were not having any manufacturing facilities during the impugned period or not ? and followed the procedure as laid down in Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 or not ? 6.6 We further, take note of the facts that during the impugned period, the appellants were filing their Excise returns, which shows that the appellants were having manufacturing facilities during the impugned period, therefore, the benefit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in view of the decision of the Gauhati High Court in Commissioner of C. Ex., Shillong vs. Jellalpore Tea Estate18, wherein it was held: "14. Insofar as the present case is concerned, the prescription of law required that the order of the Assistant Commissioner passed on 29-4-2002 could be challenged only by resorting to Section 35-E of the Act. The Revenue could not initiate collateral proceedings to set aside the order dated 30-4-2002 by resorting to the enabling power under Section 11A of the Act. 15. Consequently, we are of the opinion that : (i) Section 11A of the Act is not applicable to the facts of the case since the issue raised did not concern any approval, acceptance or assessment relating to the rate of duty on or valuation of any excisable goods. The issue raised by the assessee related to its entitlement to the benefit of Notification No. 33/99-C.E., dated 8-7- 99, (ii) Even otherwise, the Revenue could not take recourse to Section 11A of the Act when it had a statutory remedy available to it to challenge the order dated 29-4-2002 passed by the Assistant Commissioner of Central Excise, Silchar by resorting to the revisional power available under Section 35-E o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Central Excise, Pune-III vs. Ajinkya Enterprises19 . It was held: "10. Apart from the above, in the present case, the assessment on decoiled HR/CR coils cleared from the factory of the assessee on payment of duty has neither been reversed nor it is held that the assessee is entitled to refund of duty paid at the time of clearing the decoiled HR/CR coils. In these circumstances, the CESTAT following its decision in the case of Ashok Enterprises - 2008 (221) E.L.T. 586 (T), Super Forgings - 2007 (217) E.L.T. 559 (T), S.A.I.L. - 2007 (220) E.L.T. 520 (T) = 2009 (15) S.T.R. 640 (Tribunal), M.P. Telelinks Limited - 2004 (178) E.L.T. 167 (T) and a decision of the Gujarat High Court in the case of CCE v. Creative Enterprises reported in 2009 (235) E.L.T. 785 (Guj.) has held that once the duty on final products has been accepted by the department, CENVAT credit availed need not be reversed even if the activity does not amount to manufacture. Admittedly, similar view taken by the Gujarat High Court in the case of Creative Enterprises has been upheld by the Apex Court [see 2009 (243) E.L.T. A121] by dismissing the SLP filed by the Revenue." (emphasis supplied) 20. In view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pulously followed, as much in adjudication proceedings as in criminal proceedings relating to prosecution. 11. As already noticed hereinabove, subsection (1) of Section 9D sets out the circumstances in which a statement, made and signed before a gazetted Central Excise Officer, shall be relevant for the purpose of proving the truth of the facts contained therein. If these circumstances are absent, the statement, which has been made during inquiry/investigation, before a Gazetted Central Excise Officer, cannot be treated as relevant for the purpose of proving the facts contained therein. In other words, in the absence of the circumstances specified in Section 9D(1), the truth of the facts contained in any statement, recorded before a Gazetted Central Excise Officer, has to be proved by evidence other than the statement itself. The evidentiary value of the statement, insofar as proving the truth of the contents thereof is concerned, is, therefore, completely lost, unless and until the case falls within the parameters of Section 9D(1). 12. The consequence would be that, in the absence of the circumstances specified in Section 9D(1), if the adjudicating authority relies on the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artmental officers and other persons should not be granted. The Commissioner also observed that the case against the appellant is not only on the basis of statements of employees of Amarnath Industries, but also on circumstantial test reports and, therefore, denying the right of cross examination would not be violative of principle of natural justice. 26. These observations made by the Commissioner in the impugned order are clearly contrary to the principles enunciated by the Allahabad High Court in Parmarth Iron and the Punjab and Haryana High Court in Jindal Drugs. In the first instance, under section 9D of the Central Excise Act it is clear that a statement made during investigation/enquiry before a central excise officer cannot be relied upon unless it is first admitted and for this the person who made the statement has to be summoned and examined as a witness in adjudication proceedings. Failure to do so would mean that the adjudicating authority has relied upon an irrelevant material and, therefore, the order would be vitiated. The question of cross examination would arise only after examination of the person who makes statement before the central excise officer. 27. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision clearly holds that by virtue of sub-section (2) of Section 9D, the provisions of sub-section (1) thereof would extend to adjudication proceedings as well. 7. There can, therefore, be no doubt about the legal position that the procedure prescribed in sub-section (1) of Section 9D is required to be scrupulously followed, as much in adjudication proceedings as in criminal proceedings relating to prosecution. 8. As already noticed herein above, sub-section (1) of Section 9D sets out the circumstances in which a statement, made and signed before a Gazetted Central Excise Officer, shall be relevant for the purpose of proving the truth of the facts contained therein. If these circumstances are absent, the statement, which has been made during inquiry/investigation, before a Gazetted Central Excise Officer, cannot be treated as relevant for the purpose of proving the facts contained therein. In other words, in the absence of the circumstances specified in Section 9D(1), the truth of the facts contained in any statement, recorded before a Gazetted Central Excise Officer, has to be proved by evidence other than the statement itself. The evidentiary value of the statement, insofar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved thereby. 13. If none of the circumstances contemplated by clause (a) of Section 9D(1) exists, clause (b) of Section 9D(1) comes into operation. The said clause prescribes a specific procedure to be followed before the statement can be admitted in evidence. Under this procedure, two steps are required to be followed by the adjudicating authority, under clause (b) of Section 9D(1), viz. (i) the person who made the statement has to first be examined as a witness in the case before the adjudicating authority, and (ii) the adjudicating authority has, thereafter, to form the opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. 14. There is no justification for jettisoning this procedure, statutorily prescribed by plenary parliamentary legislation for admitting, into evidence, a statement recorded before the Gazetted Central Excise officer, which does not suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word "shall" in Section 9D(1), makes it clear that, the provisions contemplated in the sub-section are mandatory. Indeed, as they pertain to con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has already been recorded before a Gazetted Central Excise officer is examined as a witness before the adjudicating authority, and (ii) the adjudicating authority arrives at a conclusion, for reasons to be recorded in writing, that the statement deserves to be admitted in evidence, that the question of offering the witness to the assessee, for cross-examination, can arise. 19. Clearly, if this procedure, which is statutorily prescribed by plenary parliamentary legislation, is not followed, it has to be regarded, that the Revenue has given up the said witnesses, so that the reliance by the CCE, on the said statements, has to be regarded as misguided, and the said statements have to be eschewed from consideration, as they would not be relevant for proving the truth of the contents thereof. 20. Reliance may also usefully be placed on Para 16 of the judgment of the Allahabad High Court in C.C.E. v. Parmarth Iron Pvt Ltd., 2010 (260) E.L.T. 514 (All.), which, too, unequivocally expound the law thus : "If the Revenue choose (sic chose?) not to examine any witnesses in adjudication, their statements cannot be considered as evidence." 21. That adjudicating authorities are b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements recorded during investigation, under Section 14 of the Act, whose makers are not examination-in-chief before the adjudicating authority, i.e., before Respondent No. 2, would have to be eschewed from evidence, and it would not be permissible for Respondent No. 2 to rely on the said evidence while adjudicating the matter. Neither, needless to say, would be open to the Revenue to rely on the said statements to support the case sought to be made out in the show cause notice. (iv) Once examination-in-chief, of the makers of the statements, on whom the Revenue seeks to rely in adjudication proceedings, takes place, and a copy thereof is made available to the assessee, it would be open to the assessee to seek permission to cross-examine the persons who have made the said statements, should it choose to do so. In case any such request is made by the assessee, it would be incumbent on the adjudicating authority, i.e., on Respondent No. 2 to allow the said request, as it is trite and well-settled position in law that statements recorded behind the back of an assessee cannot be relied upon, in adjudication proceedings, without allowing the assessee an opportunity to test the said evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of adjudication. The show cause notice by itself is not an order of assessment. The order of assessment will be passed only after considering the evidence and the material, which is placed before the quasi judicial authority/tribunal. Therefore, as the show cause notice is based on prima facie material and constitutes a prima facie opinion, that does not result into an order of adjudication. The question, therefore, of an assessee being entitled to cross-examination, even before the adjudication has commenced, in our opinion, surely would not arise. It is only after the adjudication proceedings have commenced pursuant to the show cause notice and if the Revenue seeks to rely upon the statements or documents, then the principles of natural justice would require in the absence of any statutory provision, that the person whose statement was recorded is made available for cross-examination to test the veracity of the statement. 16. We, therefore, have no hesitation in holding, that there is no requirement in the Act or Rules, nor do the principles of natural justice and fair play require that the witnesses whose statements were recorded and relied upon to issue the show cause notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid issue has been examined by this Tribunal in the case of Trikoot Iron & Steel Casting Limited Vs. Additional Director General (Adjn.), Director General of GST Intelligence (Adjudication Cell) vide Final Order No.58546/2024 dated 09.09.2024, wherein this Tribunal has observed as under : "15. To examine the issues that have been raised, it would be necessary to first examine section 36B of the Central Excise Act. It is reproduced: "Section 36B- Admissibility of micro films, facsimile copies of documents and computer print outs as documents and as evidence. (1) Notwithstanding anything contained in any other law for the time being in force,- (a) a microfilm of a document or the reproduction of the image or images embodied in such microfilm (whether enlarged or not); or (b) a facsimile copy of a documents; 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"). (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of this sub-section it shall be sufficient for a matter to be stated to be 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 dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Evidence Act, which is pari materia to the provisions of section 36B of the Central Excise Act, it would be relevant to refer to the observations made by the Supreme Court in Anvar P. V. The Supreme Court, held that evidence relating to electronic record shall not be admitted in evidence unless the requirement of section 65B of the Evidence Act is fulfilled. The relevant paragraphs of the said judgment are reproduced: " "13. Any documentary evidence by way of an electronic record 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, wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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. 16. Only if the electronic record is duly produced in terms of Section 65B of the Evidence Act, the question would arise as to the genuineness thereof and in that situation, resort can be made to Section 45A - opinion of examiner of electronic evidence. 17. The Evidence Act does not contemplate or permit the proof of an electronic record by oral evidence if requirements under Section 65B of the Evidence Act are not complied with, as the law now stands in India. xxxxxxxxxxx 22. xxxxxxxxxxx. Section 63 and 65 have no application in the case of secondary evidence by way of electronic record; the same is wholly governed by Section 65A and 65B. to that extent, the statement of law on admissibility of secondary evidence pertaining to electronic record, as stated by this court in N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deals with the proof of contents of documents, and states that the contents of documents may be proved either by primary or by secondary evidence. Section 62 of the Evidence Act defines primary evidence as meaning the document itself produced for the inspection of the court. Section 63 of the Evidence Act speaks of the kind or types of secondary evidence by which documents may be proved. Section 64 of the Evidence Act then enacts that documents must be proved by primary evidence except in the circumstances hereinafter mentioned. Section 65 of the Evidence Act is important, and states that secondary evidence may be given of "the existence, condition or contents of a document in the following cases...". 19. Section 65 differentiates between existence, condition and contents of a document. Whereas "existence" goes to "admissibility" of a document, "contents" of a document are to be proved after a document becomes admissible in evidence. Section 65A speaks of "contents" of electronic records being proved in accordance with the provisions of Section 65B. Section 65B speaks of "admissibility" of electronic records which deals with "existence" and "contents" of electronic records bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ean "all" given the context. xxxxxxx. xxxxxxxxxx 30. Coming back to Section 65B of the Indian Evidence Act, subsection (1) needs to be analysed. The sub-section begins with a nonobstante clause, and then goes on to mention information contained in an electronic record produced by a computer, which is, by a deeming fiction, then made a "document". This deeming fiction only takes effect if the further conditions mentioned in the Section are satisfied in relation to both the information and the computer in question; and if such conditions are met, the "document" shall then be admissible in any proceedings. The words "...without further proof or production of the original..." make it clear that once the deeming fiction is given effect by the fulfilment of the conditions mentioned in the Section, the "deemed document" now becomes admissible in evidence 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. 31. The non-obstante clause in sub-section (1) makes it clear that when it comes to information contained in an electronic record, admissibility and proof ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported as (2018) 5 SCC 311, do not lay down the law correctly and are therefore overruled. (b) The clarification referred to above is that the required certificate under Section 65B (4) is unnecessary if the original document itself is produced. This can be done by the owner of a laptop computer, computer tablet or even a mobile phone, by stepping into the witness box and proving that the concerned device, on which the original information is first stored, is owned and/or operated by him. In cases where the "computer" happens to be a part of a "computer system" or "computer network" and it becomes impossible to physically bring such system or network to the Court, then the only means of providing information contained in such electronic record can be in accordance with Section 65B(1), together with the requisite certificate under Section 65B(4). The last sentence in Anvar P.V. (supra) which reads as ".. if an electronic record as such is used as primary evidence under Section 62 of the Evidence Act..." is thus clarified; it is to be read without the words "under Section 62 of the Evidence Act,..." With this clarification, the law stated in paragraph 24 of Anvar P.V. (supra) does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Evidence Act does not contemplate or permit the proof of an electronic record by oral evidence if the requirements of section 65B of the Evidence Act is not complied with; (v) An electronic record by way of secondary evidence shall not be admitted in evidence unless the the requirements of section 65B of the Evidence Act has satisfied; and (vi) This would not apply in a case where the appellant adduces primary evidence by making available in evidence the electronic records. 23. A Bench of the Tribunal in Agarvanshi Aluminium Ltd. vs. Commissioner of Customs (I), Nhava Sheva6, where the issue was with respect to section 36B of the Central Excise Act, also observed: " "12. ...... it is clear that for admissibility of computer printout there are certain conditions have been imposed in the said section. Admittedly condition 4C of the said section has not been complied with and in the case of Premier Instruments & Controls (supra) this Tribunal relied on the case of International Computer Ribbon Corporation - 2004 (165) E.L.T. 186 (Tri.-Chennai) wherein this Tribunal has held that "computer printout were relied on by the Adjudicating Authority for recording a finding of cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Section 36B(2) provides the conditions in respect of computer printouts. 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 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e kitchen, the officers recovered "Computer (CPU, Monitor, Keyboard and Mouse) which was switched on and CPU was found without cover and without having any hard disc"; (v) The officers conducted a thorough search of the entire residential premises and found "one of the hard disc hidden in a corner lying near the dog house"; (vi) The officers also found two hard discs from the cupboard of the kitchen; (vii) The officers asked Vaibhav Goel to connect the hard disc found in the corner near dog house with the CPU installed in the kitchen; (viii) On the direction of Vaibhav Goel, Mohit Vaish started the CPU after connecting the said hard disc; (ix) On being asked by the officers to take the printouts of data captured in the software, Vaibhav Goel informed that being a MS Dos based software, "printout cannot be taken without configuring printer Canon LBP 2900B (available in the residence) with site key and license key". (x) On being asked how these keys can be taken, Vaibhav Goel stated that he would have to talk to an expert and on direction of Vaibhav Goel, Mohit Vaish spoke to one Dua, who on mobile informed after some time that site key is 'EIGIDADEJTBO' and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imately the officers recovered CPU, Monitor, Keyboard and Mouse in the room, but the CPU was found without cover and hard disk. The Panchnama does not record that Vaibhav Goel was seen removing the hard disk from the CPU and indeed it would not have been possible for Vaibhav Goel to remove this hard disk from the CPU in the presence of all the officers and throw it away. There is nothing on the record to link the hard disk to the CPU, nor is there anything to link that the hard disc and the pen drive stored information contained in the computer. 30. A hard disk is a rigid magnetic disk that stores data. A pen drive is a data storage device that includes flash memory with an integrated USB interface. 31. The printouts, which are the sole basis for holding that the appellant had indulged in clandestine removal, were taken both on 04.07.2013 and on 15.07.2013 by placing the recovered hard disc and pen drive in the CPU. 32. It is, therefore, clear that the CPU did not contain the hard disk. The hard disk was in fact picked up from the corner of the room. No attempt was made by the department to admit the hard disk and the pen drive in evidence. The required certificate under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n restrictions which - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affect the value of the goods; (b) the sale or price is not subject to same condition or consideration for which a value cannot be determined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of Rule 9 of these rules; and (d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below. (3) (a) Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price. - (b) In a sale between related persons, the transaction value shall be accepted, whenever the importer demonstrates that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of Section 14(1). It is made clear that Section 14(1) and Section 14(1A) are not mutually exclusive. Therefore, the transaction value under Rule 4 must be the price paid or payable on such goods at the time and place of importation in the course of international trade. Section 14 is the deeming provision. It talks of deemed value. The value is deemed to be the price at which such goods are ordinarily sold or offered for sale, for delivery at the time and place of importation in the course of international trade where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or for offer for sale. Therefore, what has to be seen by the Department is the value or cost of the imported goods at the time of importation, i.e., at the time when the goods reaches the customs barrier. Therefore, the invoice price is not sacrosanct. However, before rejecting the invoice price the Department has to give cogent reasons for such rejection. This is because the invoice price forms the basis of the transaction value. Therefore, before rejecting the transaction value as incorrect or unacceptable, the Department has to find o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, we find that there is no evidence from the side of the Department showing contemporaneous imports at higher price. On the contrary, the respondent importer has relied upon contemporaneous imports from the same supplier, namely, M/s. Pearl Industrial Company, Hong Kong, which indicates comparable prices of like goods during the same period of importation. This evidence has not been rebutted by the Department. Further, in the present case, the Department has relied upon export declaration made by the foreign supplier in Hong Kong. In this connection, we find that letters were addressed by the Department to the Indian Commission which, in turn, requested detailed investigations to be carried out by Hong Kong Customs Department. The Indian Commission has forwarded the export declarations in original to the Customs Department in India. One such letter is dated 19-9-1996. In the present case, the importer has alleged that the original declarations were with the Department. That certain portions of the originals were not shown to the importer despite the importer calling upon the adjudicating authority to do so. Further, by way of Interlocutory Application No. 4 in the present civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce is not the price at which like goods are sold or offered for sale ordinarily, which words occur in Section 14(1). Lastly, it is important to note that in the above decision of this Court in Eicher Tractors (supra) this Court has held that the Department has to proceed sequentially under Rules 5, 6 onwards and it is not open to the Department to invoke Rule 8 without sequentially complying with Rules 5, 6 and 7 even in cases where the transaction value is to be rejected under Rule 4. In the present case, the show cause notice indicates that the Department had invoked Rule 8 without complying with the earlier rules. 7.8 Admittedly, no NIDB date has been relied upon and no marketing enquiry has been conducted to enhance the value of the imported goods. In the absence of these evidences, the charge of undervaluation is not sustainable. 7.9 We further find that in this case, the contemporaneous value declared by the independent buyers is available and for better appreciation of facts, the same are extracted herein below : In the absence of reliance of contemporaneous value declared by the independent buyers, which is much lower than the value declared by the appellants, the charg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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