TaxTMI 
TaxTMI 
2019 (12) TMI 938
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.... goods under Notification No. 8/2003 - CE dated 01.03.2003. They were also manufacturing "KLMN" Brand bearing belonging to M/s KLMN bearing, Barut, U.P and were clearing the bearing to said concern. M/s JBC along with others were issued show cause notice dated 08.04.2013 alleging that the factory of M/s JBC was searched on 19.10.2010 during which the sales invoices/ purchase invoices and various documents were seized. The bearings having KLMN brand and dies were also seized. A pen drive seized from the office was opened in presence of panchas and Shri Sandeep Bhalodia. The show cause notice relied upon statement of Shri Bhalodia that the printouts taken from the pen drive shows clearances to buyers and also gave name of raw material suppliers. It was alleged that the details of pen drive were entered in computer situated at factory by Part Time Accountant Shri Rajnish N Tilva. That Shri Rajnish in his statement dated 20.12.2010 stated that he had entered the details in computer and the backup was taken in pen drive. The show cause notice also relied upon statements of buyers who on seeing the printouts of pen drive accepted receipt of goods from Appellant Unit. Statement of Shri Ki....
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....rive was sealed and seized. The lists of documents seized do not find mention of pen drive. It is stated in show cause notice that the said seized Pen drive was opened in presence of panchas vide panchnama dt. 02.12.2010. This panchanama dated 02.12.2010 states that the pen drive was earlier seized and placed in cover and the signature of panchas and Shri Sandeep Bhalodia were obtained, but such sealing of Pen drive does nowhere appears in panchnama dated19.10.2010. The sealing of pen drive was deliberately stated in Panchnama dated 02.12.2010 to hide the fact that on 19.10.2010 the pen drive was merely taken over by the officer without any sealing. He also points out that in panchnama dated 02.12.2010 it is stated by panchas that the pen drive is opened in which the sales/company's activities related printouts have to be taken. He submits that even before opening of pen drive, it was not possible for the panchas to know that the pen drive contained sale related data as on the day of seizure i.e 19.10.2010, no mention of so called sales data of pen drive was stated in panchnama. This clearly shows that the pen drive was not sealed on 19.10.2010 nor it was opened on 02.12.2010 in pr....
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....bmits that in such facts the statements cannot be relied upon. He relies upon judgments in case of Basudev Garg 2013 (294) ELT 353 (DEL) and Premier Alloys Ltd. 2019 (366) ELT 659 (ALL). There is no evidence of receipt of goods by the buyers as no records of purchase by such alleged buyer were investigated or recovered from the premises of said buyers. There is no evidence of sales of material as alleged on basis of pen drive data. No records of transporters were found and hence there cannot be any demand in the basis of pen drive data. He also submits that no shortage or excess of raw materials or finished goods and no evidence of procurement of excess raw materials, consumption of electricity and production capacity to manufacture such huge quantity was found. In their reply they had produced the certificate by Chartered Engineer that the Appellant's unit does not have any capacity to manufacture the alleged quantity. This was not rebutted by the adjudicating authority. He also relies upon judgments in case of Vishwa Traders 2012 (278) ELT 362 (TRI) upheld by Hon'ble High Court as reported in 2013 (278) ELT 243 (GUJ) and maintained by Hon'ble Apex Court in 2014 (303) ELT A24 (SC)....
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....inst the Appellant Unit is based upon the pen drive said to be seized from the table drawer of office in factory. The statement of buyer of goods has been relied upon who on the basis of alleged sales data found in pen drive have stated that they received the goods without payment of duty. Coming to the submission of the Appellant, we find that the pen drive was taken under possession by the officers vide panchanama dated 19.10.2010. One of the panch witness is Shri Rajnish Tilwa who also is part time accountant of the Appellant Unit. The panchnama dated 19.10.2010 does not record the sealing of the pen drive in presence of the panch witness or any director/ employee of Appellant unit. It is only in panchnama dated 02.12.2010 that it is recorded that the pen drive was sealed earlier and was opened in presence of panchas. Even this Panchnama dt. 02.12.2010 is disputable as on Page No.1 it records that the panchnama proceedings of opening of pen drive and taking out printout were started at 5PM, but on the 3rd Page it records that the proceeding started at 3.00 PM and completed at 4.30. We also find that the pen drive was opened on 19.10.2010 during the visit of the officers. However....
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....priate for the purpose of showing that the document was produced by a computer; (c) dealing with any of the matters to which the conditions mentioned in sub-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 the best of the knowledge and belief of the person stating it. 7.2 We find that no such certificate is appearing on record. In the present case it is not coming out as to from which computer these printouts were taken and whether the condition specified u/s 36B(2) and (4) of the Central Excise Act, 1944 were followed. In the case of Anvar PV v. V.K. Basheer [Manu/SC/0834/2014], while interpreting Sec. 65B of the Evidence Act, the Hon'ble Apex Court has given following findings: "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 admiss....
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....ce Act; and (e) The certificate must be signed by a person occupying a responsible official position in relation to the operation of the relevant device. 15. It is further clarified that the person need only to state in the certificate that the same is to the best of his knowledge and belief. Most importantly; such a certificate must accompany the electronic record like computer printout, Compact Disc (CD), Video Compact Disc (VCD), pen drive, etc., pertaining to which a statement is sought to be given in evidence, when the 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 E....
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....ttes v. CCE, 2011 (22) S.T.R. 225 (Del.) = 2009 (242) E.L.T. 189 (Del.) and held that, insofar as general propositions are concerned, there can be no denying that when any statement is used against the assessee, an opportunity of cross-examining the persons who made those statements ought to be given to the assessee. In the present case, the statements were relied upon as corroborative evidences, but the cross-examination of such persons who made such statements was denied without valid ground. We find that there is no other corroboration evidencing alleged clandestine removal. Hence in such view of facts we hold that the demand based upon pen drive and statements is not sustainable. Apart from above we find that no evidence in the form of documentary evidence or physical evidence of clearance of goods or purchase of goods was found either from the Appellant unit or buyers of goods. None of the single buyer of alleged finished goods, supplier of raw material or transporter has produced their own single record. No excess raw material or finished goods or raw material was found in factory. No record showing excess production was found. In such case no demand can be made against Appel....