Admissibility of electronic evidence and statements under Central Excise law requires strict statutory compliance before confirming clandestine removal

Electronic printouts taken from seized computers, pen drives and hard disks are admissible only on strict compliance with Section 36B of the Central Excise Act, including the prescribed certification and proof of lawful production of the electronic record; without that compliance, they cannot sustain a clandestine manufacture and removal allegation. Statements recorded during investigation are likewise usable only when the procedure in Section 9D is followed, including examination of the witness and opportunity for cross-examination; absent that procedure, they lack evidentiary value for confirming demand. The text states that, because both categories of evidence were inadmissible, the duty demand and consequential penalty were set aside.

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Issues: (i) Whether printouts taken from seized computers, pen drives and hard disks were admissible in evidence without compliance with Section 36B of the Central Excise Act, 1944; (ii) Whether statements recorded during investigation could be relied upon without examination-in-chief and opportunity of cross-examination in terms of Section 9D of the Central Excise Act, 1944.

Issue (i): Whether printouts taken from seized computers, pen drives and hard disks were admissible in evidence without compliance with Section 36B of the Central Excise Act, 1944.

Analysis: The charge of clandestine manufacture and removal rested substantially on electronic data recovered from seized devices and the printouts taken therefrom. The governing rule for computer outputs required strict compliance with the statutory conditions for admissibility, including the prescribed certification and proof of lawful production of the electronic record. In the absence of compliance with those safeguards, the computer-generated printouts could not be treated as admissible evidence.

Conclusion: The printouts were inadmissible and could not sustain the demand.

Issue (ii): Whether statements recorded during investigation could be relied upon without examination-in-chief and opportunity of cross-examination in terms of Section 9D of the Central Excise Act, 1944.

Analysis: The adjudication relied on statements recorded from various persons connected with the appellant and its buyers. Those statements were not tested through the procedure mandated for their evidentiary use in adjudication, namely examination as witnesses and compliance with the statutory requirement before reliance is placed on them. Without that procedure, such statements lacked admissible evidentiary value for proving clandestine manufacture and clearance.

Conclusion: The statements were not admissible and could not be used to confirm the demand.

Final Conclusion: The allegation of clandestine manufacture and clearance failed for want of admissible evidence, and the duty demand and consequential penalty were set aside.

Ratio Decidendi: In proceedings under the Central Excise Act, 1944, electronic printouts and recorded statements can be relied upon only if the statutory conditions governing their admissibility are strictly satisfied; otherwise, they cannot form the sole basis for confirming clandestine removal and duty demand.

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