TaxTMI 
TaxTMI 
2025 (4) TMI 955
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.... quality and .040 MT of Dolomite. 1.1. On dated 28.07.2010, Officers of DGCEI conducted simultaneous search operations at the factory premises of the Appellant-company, residence of Sri Ghanshyam Dalmia (alias Bunty Dalmia), Director of Appellant-company, and premises of one M/s Vasundara Power and Infra Pvt. Ltd., ("VPIPL" in short) situated at erstwhile Cinema Hall/Video Hall. From the said office premises of M/s Vasundhara Power & Infra Pvt. Ltd., the Officers of DGCEI purportedly seized 16 Nos of CDs and 2 Nos Pen Drives (Seized from Shri Ranjan Kumar Satpathy, Staff) under Panchnama dated 28.07.2010. The 16 CDs and Pen drives were seized and kept in an envelope. From the factory premises of the Appellant, certain loose sheets/private records were seized. 1.2. On the day of search, on 28.07.2010, some print outs were taken from CD Nos. 13, 14, 15 and 16 and kept in Doc. No. 11/DGCEI/RRU/VMPL/O/10. Subsequently, on 14.09.2010 and 15.09.2010, at the DGCEI Office, the CDs viz., CD No 1, CD No. 2, CD No. 9, CD No.10, CD No.11, CD No.12, CD No.13, CD No.14, CD No. 15 and CD No. 16, and Pen drives were inserted in the computer of DGCEI and printouts were taken in presence of Sr....
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....mitted into evidence and cannot be relied upon; no tax can be demanded without complying with the mandatory conditions of Section 36B. He states that the CDs/Pen Drives were seized and kept in envelope without any sealing; the said two Pen Drives were seized from Shri R.K. Satpathy; the demand has been raised on comparison of Computer Printouts/CD Printouts/Pen Drive Printout etc. with the statutory records (DSA/RG-1) and the entries which were not found tallying with the statutory records, were assumed to have been related to clandestine production and removal of Sponge Iron. 2.1. In this regard, the Ld. Counsel for the appellants submits that in the instant case no "certificate" as required under Section 36B(4) of the Central Excise Act, 1944 has been adduced to substantiate the authenticity of the pen drive/CDs and computer printouts. He contends that the question of genuineness or otherwise of computer printout will arise only if conditions of Section 36B are satisfied. In support of this view, the appellant relied upon the decision in the case of CCE Vs. Shivam Steel Corporation (2023) 2 Centax 259 (Ori.). 2.2. It is also submitted on behalf of the appellants that the ev....
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....g Behera in his Statement dated 09-08-2010 in reply to Q. No. 12 and Q. No.13 (Page 332, Vol.-I) has stated that Sri R.K. Satpathy has entered the data in the computer. In the above background of the case, the appellants have contended that compliance of Section 9D was all the more necessary. 3.2. It is further submitted that when statement of the person/witness on which reliance is placed is not examined in chief and not allowed for Cross Examination in accordance with Section 9D, such statement cannot be considered relevant piece of material; Section 9D deals with "relevancy of oral statements". In support of the above contentions, the Appellant relies on the following decisions:- (i) G.Tech Industries Vs. UOI [2016 (339) ELT 209 (P&H)] (ii) M/s J.J. Extrusion Pvt. Ltd., Vs. CCE [2025- VIL-320-CESTAT-KOL-CE] (iii) Hitech Abrasives P. Ltd. Vs. CCE [(2018) 362 ELT 96 (CHH.)] (iv) Jai Balaji Industries Ltd. (Unit-III) Vs. CCE [2023-VIL-771-CESTAT-KOL-CE] (v) Prinik steels (p.) Ltd. Vs. CCE [(2023) 12 TMI 1299-CESTAT-KOLKATA] 3.3. The Appellant submits that they had also demanded cross examination of the following persons in accordan....
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....rative evidence are legally not sustainable. In support of the above contentions, the Appellant relies on the following judgments :- (i) Arya Fibres Pvt.Ltd Vs. CCE [2014(311) E.L.T 529 (Tri. Ahmd)] (ii) Prinik steels (p.) Ltd. Vs. CCE [(2023) 12 TMI 1299-CESTAT-KOLKATA] (iii) Continental Cement Co. V. UOI [(2014) 309 ELT 411 (All.)] (iv) Hitech Abrasives P. Ltd. Vs. CCE [(2018) 362 ELT 96 (CHH.)] (v) Nova Petrochemicals v. CCE, Ahmedabad-II, [vide Final Order Nos. A/11207 - 11219/2013, dated 26-9-2013] 4.3. The Appellant submits that clandestine manufacture and clearance of finished goods cannot take place without purchase of raw materials; in respect of Iron Ore, it vaguely alleged on the basis of private records/loose sheets seized from third parties that the Appellant had purportedly procured 1366.415 MT of Iron Ore during May, 2009 and 1507.765 MT during May'2010, aggregating to 2874.180 MT of Iron Ore which is just 8.7%. The Appellant contends that the total Iron Ore required for manufacture of 20624.885 MT of Sponge Iron is at least 33000 MT @ 1:1.60. In this regard, the appellant submits that without Coal and Dolomite, it is t....
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....payment of Excise Duty on clandestine manner and this shows that the Appellant had been concealing the actual transactions and the goods in question were removed clandestinely without payment of Excise Duty. The Ld. Authorized Representative of the Revenue thus reiterates the findings of the ld. adjudicating authority and justifies the confirmed demand and interest and penalties thereon. He prays that the appeals may be dismissed. 9. Heard both the sides, perused the appeal papers and considered the submissions made by both the sides. 10. We observe that the proceedings against the present Appellant No. 1, namely, M/s. Vasundhara Metaliks Pvt Ltd. has been initiated on the basis of the documents recovered from the premises of one M/s Vasundara Power and Infra Pvt. Ltd. ("VPIPL" in short) and some loose sheets/private records recovered from the factory premises of the Appellant. We observe that from the said office premises of M/s Vasundhara Power & Infra Pvt. Ltd., the Officers of DGCEI seized 16 Nos of CDs and 2 Nos Pen Drives. Scrutiny of the data recovered from the CDs, pen drives and loose sheets/private records revealed that the Appellant has been clearing the goods clan....
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....n the statement reproduces or is derived from information supplied to the computer in the ordinary course of the said activities. ........ (4) In any proceedings under this Act and the rules made there under where it is desired to give a statement in evidence by virtue of this section, a certificate doing any of the following things, that is to say- (a) Identifying the documents containing the statement and describing the manner in which it was produced. (b) giving such Particulars of any device involved in the production of that document as may be appropriate 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 i....
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....requirements of Section 36-B of the CE Act, which reads as "Admissibility of micro films, facsimile copies of documents and computer print outs as documents and as evidence" have to be satisfied. 12. The title of Section 36-B of the CE Act itself refers to admissibility of 'computer print outs as documents and as evidence'. It is mandatory in terms of Section 36-B (1), for a computer print-out to be admissible without further proof of production of the original, to satisfy the conditions set out in Section 36-B(2) read with Section 36-B (4) of the CE Act. The said conditions are more or less similar to the conditions stipulated in Section 65-B (4) of the EA. The mandatory requirement of Section 65-B (4) was discussed by the Supreme Court of India in Anvar P.V. v. P.K. Basheer (2014) 10 SCC 473. It was held as under in the said judgment: "15. Under Section 65-B(4) of the Evidence Act, if it is desired to give a statement in any proceedings pertaining to an electronic record, it is permissible provided the following conditions are satisfied: (a) There must be a certificate which identifies the electronic record containing the statement; (b)....
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....any reason not in a position to furnish the certificate as envisaged under Section 36- B(4) of the CE Act, then the person who in charge of the computer and aware of its working would have to give such certificate. The long and short of this discussion is that without a certificate as mandated under Section 36-B (4) of the CE Act, accompanying the computer print-out, it cannot be relied upon by the Department in the adjudication proceedings." 10.5. Thus, we observe that Sub-section (4) of Section 36B requires issuance of a certificate in this behalf by a person occupying the responsible official position in relation to the operation of the relevant device or the management of the relevant activity (whichever is appropriate) to be treated as evidence in any matter stated in the certificate and, for the purpose of the sub-section, the same shall be sufficient for a matter to be stated to the best of the knowledge and the belief of the persons stating it. In the present case, we observe that the officers had not obtained any certificate as required under Section 36B(4) of the said Act. It is also noted that none of the conditions stipulated under Section 36B(2) of the Act, 1944 hav....
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....r to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudicating authority, as, in such an atmosphere, there would be no occasion for any trepidation on the part of the witness concerned. 16. Clearly, therefore, the stage of relevance, in adjudication proceedings, of the statement, recorded before a gazetted Central Excise officer during inquiry or investigation, would arise only after the statement is admitted in evidence in accordance with the procedure prescribed in clause (b) of Section 9D(1). The rigour of this procedure is exempted only in a case in which one or more of the handicaps referred to in clause (a) of Section 9D(1) of the Act would apply. In view of this express stipulation in the Act, it is not open to any adjudicating authority to straightaway rely on the statement recorded during investigation/inquiry before the gazetted Central Excise officer, unless and until he can legitimately invoke clause (a) of Section 9D(1). In all other cases, if he wants to rely on the....
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.... (All.)], would be useful for reference. In this case, the Hon'ble High Court has held as under :- "12. Further, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. On careful examination, it is found that with regard to alleged removals, the department has not investigated the following aspects : (i) To find out the excess production details. (ii) To find out whether the excess raw materials have been purchased. (iii) To find out the dispatch particulars from the regular transporters. (iv) To find out the realization of sale proceeds. (v) To find out finished product receipt details from regular dealers/buyers. (vi) To find out the excess power consumptions. 13. Thus, to prove the allegation of clandestine sale, further corroborative evidence ....