TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 934
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....inal No. 02/2011 dated 07.01.2011, the Commissioner has passed the impugned Order wherein, the duty liability has been reduced/determined at Rs. 1,92,88,482/- apart from applicable interest under Section 11AB of the Central Excise Act, 1944 and various penalties. Aggrieved, the assessee has come in appeal before this forum. Being dissatisfied with the findings of the Commissioner who has reduced the duty demand from Rs. 12,84,81,532/- to Rs. 1,92,88,482/-, the Department has also filed the appeals and since both the above appeals emanate from a common Order, all the appeals are taken up together for the sake of convenience and are disposed of by this common order. 2. Heard Shri. S. Venkatachalam Ld. Advocate appearing on behalf of the appellant and Shri. A. Cletus, Ld. ADC (AR) appearing on behalf of the Revenue. 3.1 The contentions of the Ld. Advocate for the assessee can be summarized as below : (i) The Revenue has mainly relied on the chits, small notebooks, fax message, etc., recovered from third parties; (ii) The Revenue has relied on the uncorroborated statements of various persons who were not subjected to cross-examination and who have later on retracted; (iii) The so-....
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....tain their accounts properly; that even after raising bills in the name of one party they would divert the scrap load to some other party regularly; that one of the dealers had even subsequently issued a revised bill after noticing such mistakes; that for the above reasons, the dealers' statements per se lead to nowhere since the same are full of controversies with their own accounts not being maintained properly; that during the search, the Revenue has taken stock only on eye estimation; that even the alleged production of CTD Bars with the electricity consumption would not tally; that the capacity of the furnace was 5 MTs whereas the allegation in the document alleged to have been seized shows production of 8.313 tonnes/7.929 tonnes per heat; that the assessee was in receipt of an objection raised by CERA for the years 2004-05 to 2006-07 wherein the assessee was alleged to have manufactured 6474 MTs of MS Ingots for three years which only points out, if considered for argument's sake, that the assessee could have produced 5826 MTs which on an average works out to a duty of Rs. 1.48 crores, etc. 4.1 Per contra, Ld. AR Shri. A. Cletus appearing on behalf of the Revenue supported t....
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....ctory evidence, it is inconclusive that these documents indicate suppression of production, though they are probably indicative." 8.2 With regard to the alleged production of bars and by-products for the month of August 2006, he refers to the statement of Works Manager and Executive Director and then concludes at paragraph 36.03 at page 33 as under : "The Executive Director in his statement (B-57) dated 06.04.2007 however confirmed that the average production could be in the range of 3600 MT per month. While the evidence is strong on both sides, it is difficult to draw any conclusion about the quantum of suppression of production thought here are indications to this effect." What is surprising from the above is the non-reference to mode of transportation of raw materials to the appellant's factory premises and non-examination of the driver(s) of such transport vehicles. 9. The next step considered by the Commissioner is the unaccounted clearance for which the evidences he has considered are weighment slips, internal corroborating documents, documents seized from the dealers, chits and again, weighment slips. In paragraph 37.03 at page 34 of his Order although the adjudicating....
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....on vis-à-vis the production, the Hon'ble High Court of Jharkhand have thrown out the same palpably on the ground that manufacture or production cannot be deduced sitting in a glass chamber. The cases decided by the Hon'ble High Court of Jharkhand are : 1) M/s. Nanak Ispat P Ltd. Vs. Union of India through the Commissioner of Central Excise & Service Tax, Jamshedpur & Ors in W.P. (T) No. 7408 of 2012 dated 11.01.2017 and 2) M/s. Stan Commodities Pvt. Ltd. Vs. Commissioner of Central Excise & Ors. in W.P. (T) no. 1208 of 2015 dated 21.11.2017. The relevant paragraphs of the decision in the case of M/s. Nanak Ispat P Ltd (supra) are as under : "21. The law is well settled that the electricity consumption cannot be the only factor or basis for determining the duty liability that too on imaginary basis especially when Rule 173E mandatorily requires the Commissioner to prescribe/fix norm for electricity consumption first and notify the same to the manufacturers and thereafter ascertain the reasons for deviations, if any, taking also into account the consumption of various inputs, requirements of labour, material, power supply and the conditions for running the plant together with....
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....ral Excise, Chennai-II reported in 2005 (182) E.L.T. 389(T)= 2005 (98) ECC 790 (T). 23. The Tribunal has consistently taken the view that wherever electricity consumption alone is adopted as the basis to raise demands, the order of the lower authorities have been held to be unsustainable in law and set aside and the Revenue had been directed to carry out experiments in different factories on different dates to arrive at the average to be adopted as a norm, which can be followed thereafter and the Revenue in the present case not having conducted any experiment whatsoever cannot be permitted to justify the demands raised. It will be appropriate on the part of the Revenue to conduct experiments in the factory of the appellants and others and that too on different dates to adopt the test results as the basis to arrive at a norm, which can be adopted for future. The impugned demand based merely on assumptions and presumptions cannot, therefore, be sustained nor could be justified both on facts and in law. 24. The law is well settled that in every case of alleged clandestine removal, the onus is on the Revenue to prove what is alleges with positive and concrete evidence. In the absen....
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.... 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." 14.2 On a careful analysis of the basic requirement of Section 36B, what it requires as evidence is a document, may be a micro-film or facsimile or a statement contained in a document and included in a printed material produced by a computer. Therefore, it clearly has the effect of excluding any other thing other than a document, that is to say, it excludes any material or thing other than documents. We are therefore constrained to hold that the pendrive(s) not being a document should also get excluded from the provisions of Section 36B(1). 14.3 Sub-Section (2) of Section 36B speaks about a computer printout produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of ....
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.... 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. The very admissibility of such a document, i.e., electronic record which is called as computer output, depends on the satisfaction of the four conditions under Section 65B(2). Following are the specified conditions under Section 65B(2) of the Evidence Act: (i) The electronic record containing the information should have been produced by the computer during the period over which the same was regularly used to store or process information for the purpose of any activity regularly carried on over ....
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....ereof and in that situation, resort can be made to Section 45A - opinion of examiner of electronic evidence. 18. 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." 15.2. Thus, it has been clearly laid down by the Supreme Court that the computer printout can be admitted in evidence only if the same are produced in accordance with the provisions of Section 65B (2) of the Evidence Act. A certificate is also required to accompany the said of computer printouts as prescribed under section 65B(4) of Evidence Act. It has been clearly laid down in para 15 of this judgment that all the safeguards as prescribed in Section 65B (2) & (4), 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 tempering, alteration, transposition, excision etc without such safeguards, the whole trial based on proof of electronic records can lead to travesty of justice. We may add here that the provisions of Section 65B of Indian Evid....