Electronic records and untested statements cannot sustain clandestine removal demands without statutory certification, corroboration, and cross-examination.

Electronic printouts from a hard disk or floppy disk cannot be relied upon as evidence unless the statutory certificate under Section 36B of the Central Excise Act is produced; without it, the records have no admissible evidentiary value. A demand for clandestine removal also cannot rest on uncorroborated dealer statements, allegations, or electricity consumption alone: positive supporting material such as excess production, cash trail, transport evidence, gate records, or similar corroboration is required. Where such statements are used against a party, cross-examination must be afforded as a matter of law and natural justice. In the absence of these safeguards and supporting evidence, the duty demand fails.

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Issues: (i) Whether printouts taken from hard disk and floppy disk could be relied upon in the absence of the certificate contemplated by Section 36B of the Central Excise Act. (ii) Whether uncorroborated statements of dealers, relied upon without granting cross-examination, could sustain the allegation of clandestine removal and the demand of duty.

Issue (i): Whether printouts taken from hard disk and floppy disk could be relied upon in the absence of the certificate contemplated by Section 36B of the Central Excise Act.

Analysis: The Tribunal held that where electronic data from a computer, hard disk or floppy disk is sought to be used as documentary evidence, the statutory certificate is mandatory. In the absence of such certificate, the printouts lacked legal evidentiary value and had to be ignored.

Conclusion: The printouts from the hard disk and floppy disk were inadmissible and could not be used against the assessee.

Issue (ii): Whether uncorroborated statements of dealers, relied upon without granting cross-examination, could sustain the allegation of clandestine removal and the demand of duty.

Analysis: The Tribunal held that clandestine removal cannot be established on the basis of mere allegations, electricity consumption, or uncorroborated statements when no positive evidence of excess production, cash flow, transport movement, gate records, or related corroborative material is produced. Further, statements sought to be used against a person must be put to that person and cross-examination must be afforded as a matter of law and natural justice. Since the request for cross-examination was denied while relying on those statements, the evidentiary basis for the demand failed.

Conclusion: The demand of duty based on clandestine removal could not be sustained.

Final Conclusion: The impugned orders were set aside and the appeals were allowed with consequential relief in accordance with law.

Ratio Decidendi: Electronic records used as evidence must satisfy the statutory certificate requirement, and a duty demand based on third-party statements cannot survive unless the statements are corroborated and the affected party is given an opportunity of cross-examination.

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