TaxTMI 
TaxTMI 
2019 (12) TMI 587
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....n 11A (1) of the Central Excise Act, 1944 (hereinafter referred to as 'the Act') alongwith interest under Section 11AA and Section 11AB of the Act and equivalent penalty under Section 11AC of the Act read with Rule 25 of Central Excise Rules, 2002 (hereinafter referred to as 'the Rules'). Further, a demand of Rs. 13,11,367/- under Section 11 A(1) of the Act and an equivalent penalty under Section 11 AC of the Act read with Rule 25 of the Rules. A demand of Rs. 9,05,130/- has also been confirmed under Section 11A (1) read with Rule 14 of CENVAT Credit Rules,2004 (hereinafter referred to as the "Credit Act") for clandestine removal of inputs along with interest under Section 11 AB and penalty under Section 11AC read with Rule 15 of CENVAT Credit Rules. The separate personal penalties of Rs. 8,00,00,000/- Rs. 6,00,00,000/-, Rs. 6,00,00,000/-and Rs. 1,00,00,000/-has also been imposed against Shri Sitaram Agarwal, Shri.Dilip Kumar Agarwal, Shri. Deepak Kumar Agarwal and Shri.Sudipto Bhattacharya respectively under Rule 26 of the Rules. The learned Commissioner has also, appropriated the amount of Rs. 6,50,00,000/- and Rs. 22,16,501/- deposited by the appellant during the course of inves....
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....nd, accordingly, a central excise duty of Rs. 9,05,130/- was also demand. Accordingly, a Show cause notice No. 574/CE/84/2011/INV dated 24.09.2013 was issued to the appellants for demand of central excise duty invoking the longer period of limitation under Section 11A(4) of the Act alongwith interest, and penalty under Section 11AC of the Act. Penalties were also proposed to be imposed on the other appellants in show cause notice under Rule 26 of the Rules. 4. The appellants filed a defence reply to the impugned show cause notice denying all the charges made against them. The appellant also in reply asked for the cross-examination of various persons, whose statements were relied upon by the department. The appellant further asked for the cross-examination of some of the officers, who participated in search and seizure operation. The learned Commissioner(Adjudicating Authority), however, denied the crossexamination of all the persons on whose statement the reliance was placed, holding that the allowing of cross-examination would further complicate the issue. The appellant also submitted an additional defence reply dated 27.08.2018. The learned Commissioner, however, by the impugn....
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....seized from the residence of Shri. Ravi Bhushan Lal should have been carried out in the presence of any Computer expert and certification from the person who had control over it him have also not been obtained, which is a mandatory requirement under Section 36(B) of the Act. The learned Counsel further stated that the entire data, therefore, is inadmissible piece of evidence, since the legal requirement under Section 36B for the retrieval of data from electronic device was not followed by the Department. Following infirmities were mentioned by the learned Advocate; a. The External Data Storage Device was sealed at the premises of Ravi Bhushan Lal and re-opened at the office of DGCEI on 30.03.2011 and the panchanama was again prepared at the DGCEI officer by Shri Srikant Manna and Shri Subhas Giri. The appellant asked for the cross-examination of the aforesaid pancha witness that was outrightly denied, by the Adjudicating Authority. b. The Panchanama drawn at the Office of DGCEI is not clear as to whether a computer belonging to DGCEI or the seized laptop was used for taking out 440 pages of computer printouts relied upon by the Department. c. The resumpti....
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....ner of Central Excise, Chennai-[ 2008 (231) ELT 224(Trib.-Chennai)] Shri UlaganayagiAmmal Steels Vs. CCE, Trichy [2008 (231) ELT 434 (Tri.-Chennai)] SSI, Chakra Cements Ltd. Vs. Commissioner of CCE, Guntar [2008 (231) ELT 67 (Tri.-Bang.)], Premier Instruments & Controls Ltd. Vs. CCE, Coimbatore [2005 (183) ELT 65 (Tri.- Chennai)] Flex Industries Ltd. vs. Commissioner [2016 (333) E.L.T. A235 (Tri. - Del.)]. 8. The learned Advocate further referred to the judgment of this Tribunal in case of M/s. Popular Paints and Chemicals Vs. Commissioner of Central Excise & Customs, Raipur wherein vide Final Order No.52716-52718/2018 dated 06.08.2018 it is held as under :- "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. 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 acc....
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....dence without knowing the author of the said loose sheets, in absence of which the evidentiary value gets destroyed. d. There was also no list of things and places from where the documents were seized in the course of search, which makes the seizure proceeding vitiated as held in the case of Deepak Hinges Pvt. Ltd. Vs. Commissioner, 2019 (21) G.S.T.L. J119 (Tri. - Allahabad)] e. There was no signature or attestation of the Panchas on either the handwritten exercise book (Kalpana) or the loose sheets pages. f. There was a complete lack of any corroboratory evidences in the form of raw material quantity, cash transaction, employment of extra work force, electricity consumption, details of raw material suppliers and purchasers of the finished goods. The learned counsel relied on following cases in support of his argument; Kuber Tobacco Products Pvt. Ltd. Vs. CCE [2013(290) E.L.T. 545 (T)] Rhino Rubbers Ltd. Vs. Collector [1996(85)E.L.T. 260 (T)] 10. It was further submitted that in absence of cross-examination or corroborative evidences, the inculpatory statements by itself cannot be relied upon to establish the char....
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....nd eye estimation and in actual there was no shortage at the time of stock taking of the goods. The officers did not carry out the actual weighment of the raw materials and also the finished goods. The following method was done to reach at the quantum of shortages; a. The weight of 9068 bundles of M.S. Wire Rods was estimated by ascertaining the weight of 10 bundles and multiplying for the average weight with the number of bundles, b. The M.S. Billets also average weight per piece was worked out and the total stock was arrived at by multiplying the average weight with the number of M.S.Billets available in the factory, c. The weight of sponge iron kept in bags was estimated to be 50 Kg per bag without weighment of even single bag. In support of their arguments against the alleged shortage, the Counsel for the appellants have relied upon following decision/judgments; CCE Lucknow Vs. Sigma Castings reported in 2012 (282) E.L.T 414 (Trib. Delhi), RHL Profiles Vs. CCE Kanpur reported in 2013 (290) ELT 247 (Tri. - Del.) 13. It has been submitted by the Counsel that the department, in order to establish the charge of cl....
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.... proceedings were made in presence of independent witnesses and the same cannot be challenged by the appellant at this stage. It was further submitted that at the time of the visit of the officer shortage of the stock of finished goods was noticed by the officers and the Director of the company has accepted the manner of stock taking and agreed to pay central excise duty on the shortages of the finished goods. He has further stated that the Director, Assistant General Manager (Finance) and Shri Ravi Bhusan Lal, the employee of the company have admitted the duty liability of the Appellant in their statements. He further submitted that the storage device and the laptop computer that were seized from the residence of Shri Ravi Bhusan Lal, the employee of the company, and their statements have been admitted by him. Further the data stored in the said devices pertained to the appellant factory. He further submitted that belated retraction and the denial of cross-examination would not vitiate the proceedings and recovery of laptop computer and data storage devices. He further submitted that the record maintained in the said storage devices reflected removal of huge quantity of finished g....
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.... of the learned Advocate that the veracity of the panchanama is doubtful. We have also considered the judgments cited by the learned Advocate and hold that search and seizure proceedings are made in violation of Section 100 of Cr PC read with Section 18 of the Act, for the reason that department has failed to follow the provisions of Section 36-B of the Act. We also agree with the contention of the learned Advocate that at the time of sealing and desealing of the external data storage device as well as the time of obtaining printouts therefrom, a certificate should have been obtained as per the provision of Section 36-B of the Act. No such certificate has been brought on record without which the evidentiary value of these printout get vitiated. As no certificate from the responsible person of the Appellant was obtained by the department, the credibility of the computer printout gets vitiated. Hon'ble Apex Court in case of M/s. Anwar P.V. Vs. P.K. Basheer reported at 2017 (352) E.L.T. 416 has held that the computer printout can be admitted as 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....
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....se papers, documents cannot be a sufficient to prove charges of clandestine removal. The Hon'ble Delhi High Court in case of C.C.Ex. Vs. Vishnu & Co. Pvt. Ltd.[2015-TIOL-2792-HC-DEL-CX] has also held that merely on the basis of statement made by the third party including transporter, agents and employees are not sufficient to prove the charges of clandestine removal in absence of independent corroborative evidence. The Hon'ble P & H High Court in case of M/s. G-Tech Industries Ltd. Vs. Union of India [2016(339) ELT P&H] has held that Section 9D of the Act has to be construed strictly, as mandatory and not merely directory. We have seen that the learned Commissioner denied the request of cross-examination on the ground that it would further complicate the issue. We have also considered the following judgements cited by the appellant:- (i) M/s.Sakeen Alloys Pvt. Ltd. VS. C.C.Ex. 2013 (296) E.L.T. 392 (Trib) which was upheld by the Gujrat High Court [2011 (308) E.L.T. 655 (Guj) and subsequentlyby the Supreme Court reported at[2015 (319) ELT A-117(SC)]. (ii) M/s. R. A. Casting Pvt. Ltd. VS. C.C.EX 2009 (237) E.L.T. 674 (Trib). This judgement was firstly upheld by the Allahabad....