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2023 (9) TMI 722
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....ial events. Based on the intelligence developed by DGGI, Ahmedabad Zonal Unit it indicated that Appellants were evading payment of service tax by resorting to suppression of taxable value of the services provided by them to their clients. The intelligence further indicated that they were suppressing the actual taxable value by collecting certain portion of such taxable value, of services so provided, in cash which was not accounted in their books of accounts and was also not considered at the time of computing service tax leviable on the same. Based on intelligence search was conducted at the business premises of the appellants and certain pen drives and other electronic data were discovered and retrieved. During the search it was found that appellants were raising invoices for the service provided to their clients, for a certain parts of actual taxable value and consideration received was being accounted in their regular Tally account. It was also found that part of taxable value of such services being recovered by appellant in cash from their clients and this cash amount was not being entered into their regular books of accounts but was entered in a separate .xls sheets. All such....
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....levant device; but there is no such certificate on record of this case. A computer printouts is secondary evidence, and therefore such printout can be admitted as evidence only if the mandatory conditions of Section 36B of the Act are complied. He placed reliance on the following judgments : - (i) J.P. Iscon Pvt. Limited - 2022 (63) GSTL 64 (Tri. Ahmd) (ii) Orissa High Court Judgment in Commissioner of Central Excise & Customs, Bhubaneshwar vs. M/s Shivam Steel Corporation - Tax Appeal Nos. 13 to 17/2016 decided on 14.12.2022. (iii) Arjun Panditrao Khotkar vs. Kailas K. Gorantyal - (2020) 7 Supreme Court Cases 1 (iv) Anvar P.V. vs. P.K. Basheer & Others (2014) 10 Supreme Court cases 1 6. He also submits that Learned Commissioner has confirmed the service tax demand on the basis that two Accounts Manager of the appellants and Partner/ Director of the Appellants have stated before the investigating officers when their statements were recorded that the computer printout were for receiving cash from the clients, and thus receiving cash for the taxable services was admitted by these persons. The Learned Commissioner also relied upon statement of on....
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.... persons cannot be justifiably made out only on the basis of statement of only one client; that also he has denied the amount mentioned in Excel Sheet; it is settled legal position that cogent and reliable evidence of a substantial quantum of alleged evasion, and sufficient number of customers/ clients, must be adduced by the Revenue. He placed reliance on the following decisions:- (i) Grace Castings Limited Vs. Commissioner, Ahmedabad -2019 (369) ELT 751 (Tri. Ahmd) (ii) Commissioner Vs. Motabhai Iron & Steel Industries -2015 (316) ELT 374 (Guj.) (iii) S.M. Energy Teknik & Electronics Ltd. Vs. Commissioner, Vadodara 2015 (328) ELT 443 (Tri. Ahmd.) (iv) Mahesh Silk Mills Vs. Commissioner of Central Excise -2014 (304) ELT 703 (Tri. Ahmd.) (v) Commissioner Vs. Mahesh Silk Mills -2015(319) ELT (A52) -Gujarat High Court. (vi) Arya Fibers Pvt. Limited Vs. Commissioner, Ahmedabad -2014 (311) ELT 529 (Tri. Ahmd) 9. He further submits that a case of clandestine activities has to be established by the revenue by leading cogent, reliable and independent evidence. Such case cannot be made out only on statements recorded by the investiga....
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....) (v) Lawn Textiles Mills Pvt. Ltd. Vs. CCE, Salem - 2013 (297) ELT 561 (Tri- Chennai) (vi) CCE, Mumbai Vs. Kalvert Foods India Pvt. Ltd. - 2011(270) ELT 643 (SC) (vii) Gulabchand Silk Mills P Ltd. Vs. CCE, Hyderabad -II- 2005 (184) ELT 263 (Tri. Bang) (viii) CCE, Madras Vs. Systems & Components Pvt. Ltd. - 2004 (165) ELT 136 (SC) (ix) Lawn Textiles Mills Pvt. Ltd. Vs. CESTAT, Chennai - 2018 (362) ELT 559 (Mad.) (x) CC, Kandla Vs. Essar Oil Limited. 13. We have heard the rivals and carefully considered the facts of the case and the submissions made at length by both sides. We find that the Revenue has proceeded in confirmation of the service tax demand on the basis of .xls Sheets recovered from Pen Drive seized from the appellants premises. The entire case of Revenue in the present matter is based on said .xls sheets and Statement of employee, partner and director of the Appellants. However, it is seen that apart from recording the statements of persons in the present matter no independent investigation has been carried out by the department. We observed that Department has not brought out any independent facts or evidence as....
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....e not made the payment of said pending amount. From the above statement of Shri Hardik Thakkar it is clear that Total payment of Rs. 9,44,566/- was made by M/s Arihant Educare Pvt. Ltd. through normal banking channel and amount of Rs. 16,65,217/- shown as pending in the said page was never paid to them and He negotiated the entire deal with Shri Pankaj Dandwala. We find that such denial of the customer is not considered or dealt upon by the Ld. Commissioner in his order. We also gone through the statement of Shri Suvrat M Puri and observe that this customer was not the one who entered into agreement with the appellant. Shri Suvrat's brother Late Shri Vishrut Puri has negotiated the deal with the appellant. Further in his statement Shri Suvrat M Puri is also not sure whether any cash was paid by Shri Vishrut Puri to appellant or not. Such statement cannot be relied upon as there is no confirmation from any statement recorded that such customers have paid any cash to the appellant and the person who actually has entered into agreement with the appellant is no more alive. We also find that in the present matter two invoices of customers Shri Sunny Arora and Shri Mano....
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....elevancy of statements under certain circumstances. - (1) A statement made and signed by a person before any Central Excise Officer of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, - (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provision of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court." The above Section deals expressly with ....
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....in session trials had been frequently resorted to since the enactment of the Code of Criminal Procedure, 1898. 17. In view of above it is clear that in adjudication, the adjudicating authority is required to first examine the witness in chief and also to form an opinion that having regard to the facts and circumstances of the case, the statements of the witness are admissible in evidence. Thereafter, the witness is offered to be cross-examined. We find that in the present matter Ld. Adjudicating Authority failed to do such exercise. We also note that Section 138 of the Indian Evidence Act, 1872, clearly sets out the sequence of evidence, in which examination-in-chief has to precede cross-examination, and cross-examination has to precede re-examination. 18. In the present matter it is admitted facts that Statements recorded during investigation in the present matter, whose makers are not examination-in-chief before the adjudicating authority, would have to be eschewed from evidence, and it will not be permissible for Ld. Adjudicating Authority to rely on the said evidences. Therefore, we hold that none of the said statements were admissible evidence in the present case. 19.....
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....ion during that part of that period was not such as to affect the production of the document or the accuracy of the contents; and (d) the information contained in the statement reproduced or is derived from information supplied to the computer in the ordinary course of the said activities. (3) Where over any period, the function of storing or processing information for the purposes of any activities regularly carried on over that period as mentioned in clause (a) of sub-section (2) was regularly performed by computers, whether - (a) by a combination of computers operating over that period; or (b) by different computers operating in succession over that period; or (c) by different combinations of computers operating in succession over that period; or (d) in any other manner involving the successive operation over that period, in whatever order, of one or more computers and one or more combinations of computers, all the computers used for that purpose during that period shall be treated for the purposes of this section as constituting a single computer; and references in this section to a computer shall be construed accordingly. ....
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....(2) provides the conditions in respect of computer printouts. In the present matter the computer was not shown to have been used regularly to store or process information for the purposes of any activities regularly carried on by the appellants. It was also not shown that information of the kind contained in the computer printout was regularly supplied by the appellant to the computer in the ordinary course of activities. Again, it was not shown that, during the relevant period, the computer was operating in the above manner properly. The above provision also casts a burden on that party, who wants to rely on the computer printout, to show that the information contained in the printout had been supplied to the computer in the ordinary course of business of the company. We find that none of these conditions was satisfied by the Revenue in this case. In the present case, the data was not stored in the computer but the officers had taken the printout from the USB drive by connecting to the computer. The officers had not obtained any certificate as required under Section36B of the said Act. It is also noted that none of the conditions under Section 36B(2) of the Act, 1944 was observed.....