TaxTMI 
TaxTMI 
2025 (7) TMI 65
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....ched by the DRI officers on 30.03.2011. As a consequence of follow up investigations undertaken, the assessee has been saddled with a total demand of central excise duty of Rs.21,21,853/. 3. Upon a visit to the appellants' factory on 30.03.2011 the authorities undertook the stock-taking of raw material (MS Ingots) as well as the finished product and a Panchnama of the shortages noticed was drawn. The details of the shortages as per Panchnama are reflected as under:- S. No. Description of raw material/finished goods Recorded qty. in M.T. (as per computerized records) Stocktaking qty. in M.T. Shortages In M.T. 1 M.S. Ingots 96,800 10.00 86,800 2 M.S. TMT etc. 301.205 104.500 196.705 3. M.S. Angles 350.110 233.00 112.110 4 M.S. Flats 560.670 192.00 368.670 5. M.S. Channel 61.509 4.00 57.505 6 TMT Bar cutting 64.270 62.00 2.270 The total value of goods found short was ascertained as Rs.2,06,00,508/- 4. The appellants' plea is that the recorded stock of goods in the factory is based on computerized records as maintained by them. It is their case that the authorities had asce....
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....ies, information of the kind contained in the statement or of the kind from which the information so contained is derived; (c) throughout the material part of the said period, the computer was operating properly or, if not, then any respect in which it was not operating properly or was out of operation 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, ....
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....ed processes to the information and supplying results of these processes; and (b) any reference to information being derived from other information shall be a reference to its being derived therefrom by calculation, comparison or any other process.] 6. It is not the case of the department that sole reliance to ascertain the duty evasion was on the basis of the computerized records maintained by the appellants. In fact the same were compared with physical set of records like RT-12, RG-23A Part-I as also retrieved from the possession of the appellants. It may however for records be stated herein that it is undisputed that the computerized data was retrieved from the appellant's computers in the presence of their employees and has been admitted so even by the firm's Director, to be their own records. Moreover, its admissibility was not contested before the lower authorities. Further, the government's own instructions permit maintenance and acceptance of computerized records (Circular No.499/65/99/CX dt.10.12.1999). The Board has also issued a circular thereto. Under the circumstances, it is prima facie obvious there is no justification seeking shelter under the garb of Sec....
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....ch purports to be in the handwriting of any particular person or which the Court may reasonably assume to have been signed by, or to be in the handwriting of, any particular person, is in that person's handwriting, and in the case of a document executed or attested, that it was executed or attested by the person by whom it purports to have been so executed or attested; (b) admit the document in evidence, notwithstanding that it is not duly stamped, if such document is otherwise admissible in evidence.] would also get attracted and it's for the appellant to prove to the contrary, in order to rule out the admissibility of such computer print outs obtained from their office computer and thereby deprive them of any evidentiary support, as drawn by the authorities. 8. The impugned Panchnama dated 30.03.2011 clearly notes that the officers had resumed certain documents, relevant to the enquiry and based upon a comparison of the stock position recorded therein vis-à-vis the physical stocktaking undertaken arrived and ascertained the shortages of raw material as well as the finished goods. This goes in to establish the constant usage of the computers for purpose of da....
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....authorized signatory. We also note that nowhere, in the proceedings before the lower authorities, the admissibility and the veracity of the said documents, retrieved from the office computers, in the presence of the authorized signatory/responsible persons of the appellant Shri Suraj Kumar, was put to question. The veracity and ownership of the said documents being an admitted fact, it is not now open to the appellant, to discredit and denounce their evidentiary status, in appellate proceedings. 11. The other plea raised by the appellant is that the stock-taking was not physically undertaken, but was done on the basis of eye-estimation. To this proposition, we find that the lower authorities have also noted that the MS ingots were of standard size and weight and stacked one upon the other, whereby with simply accounting calculations of the number of such blocks, the weighment can be arrived at. It therefore would not be a difficult thing ascertaining the quantity of said goods and arriving at the actual stock-position. Physical weighment of the stocks, would have been mandatory, in case of non-geometric and unstandard shape & size of each block. Also it is nowhere the contention....
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...., towards Central Excise duty ......................" 12. The appellant has also taken the plea that no statement was recorded by the authorities under Section 14 of the Act1, of the two representatives of the factory that were present at the time of search. We find this argument to be of no relevance to the matter as indeed the two officers being appellant's employees cannot be considered as third party material witnesses, besides they were very much present at the time of drawal of Panchnama and have duly signed the Panchnama wherein the satisfaction of the appellant's officers present, about the conduct of Panchnama proceedings has also been recorded. It is nowhere mandated in law that non-recording of their statement would indeed deal a fatal blow to the very basis of the charge. This ground raised by the appellant does not hold any justification as not all and sundry are required to be investigated and it is the Directors and such high ranking personnel in the hierarchy, conversant with and managing the day to day affairs of the organization, who alone would be in an appropriate position to come out with the facts on record. Moreover, it is the choice of the investigators a....
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....es, has also been admitted to, by the Director himself. This has been discussed in earlier paras. The attempted recusal, by the Director, at a later point in time in appeal before us, stating himself to be, a sort of a Director, unconcerned with day to day working and operations of the said unit, is not more than a mere afterthought. Were this to be a fact, it would and ought to have been in existence at the time of conduct of investigations and so spelt out. Nowhere the said plea, was however raised at any point in time, earlier. 14. The other aspect of the demand for an amount of Rs.11,26,142/- is on account of certain loose sheets that were found during the search of office premises at Kolkata. The justification for such loose sheets, as recovered, has been stated that they were physically drawn by way of certain loose accounting procedure to reconcile the sales/dispatches/payment due at the end of the day, while the field version or the manufacturing unit's response thereto is that the amount of sums outstanding against various buyers as required to be collected in respect of unaccounted sales during the day were conveyed by FAX/Courier to the headquarters at Kolkata. The ap....
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.... 7. 312 - 20.07.10 Gaurav Steel 2,12,530 A closer examination of RUD-7 with the details in the aforesaid table, do not indicate even a close comparison. While several of the names are found not to be indicative in the invoices on record, even for those like Maruti Steel, Gaurav Steel, Anand Steel which names tally in the two list, there is no talling even closely of the figures contained as the following table would show. Thus: Table Sl.No. Company Name Amount as per loose chit statement Amount as per invoice - 1. Gaurav Steel (i) Dt.29.3.2011-10,00,000 (ii) Dt.28.3.2011 - 10,00,000 2,12,530 2. Maruti Steel (i) Dt.29.3.2011 - 28,368 (ii) Dt.28.3.2011 - 29,21,828 404/30.08.2010 - 2,28,265 3. Anand Steel (i) Dt.29.3.2011 - 82,652 (ii) Dt.28.3.2011 - 82,652 217/16.6.10 - 2,12,240 16. Moreover, while drawing the impugned Panchnama dated 30.03.2011, it has been recorded at length that Vijay Kumar Rajak, Accounts Clerk, who was intercepted destroying the hand written papers, was working under the directions of its Director Sanjay Kumar Kedia and was not keeping/maintaining or retaining any permanent accounts as per the ....
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....Shri Deepak Kumar Agarwal has at any point in time retracted his self-inculpating statement, admitting of the receipt of payment in cash for goods clandestinely cleared and enjoyment of the booty by all the three Directors of the appellant concern. The appellant's argument that in response to the show cause notice, they have refuted the department's allegations and thereby stating that the statements were not voluntary and hence to be considered as retracted, is a very vague, generalised and loose submission, unacceptable in law. There is no concept of a deeming retraction known in law, and any retraction has to be a formalized one and satisfy the ingredients of a valid retraction. Moreover, the Calcutta High Court in the case of Commissioenr of Customs (Prev.) v. Rajendra Kumar Damani @ Raju Damani [2024 (5) TMI 730 (Cal.HC)] had held that the retraction of statement in itself cannot render the statement involuntary. The said decision of the hon'ble High Court has also been upheld by the apex court. It emphasized that it was the duty of the court to ascertain and examine the correctness and the validity of the retraction, the point of time when the retraction was made and whether ....
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....laims retraction, is required to prove that the said statement was made under force, coercion, duress, threat etc. (Refer K.P. Abdul Majeed v. Commissioner of Customs - 2014 (309) ELT 671 (Kar.), Surjeet Singh Chabra v. Union of India ] 1997 (89) ELT 646 (SC), KI PaVunny v. Asstt. Collector Hqrs, Cochin - 1997 (3) SCC 721). Indeed, the hon'ble apex court in the case of Avadh Kishore Das v. Ram Gopal &Ors. [AIR (1979) SC 86], in the context of Section 31 of the Indian Evidence Act, had held that evidentiary admissions, though not a conclusive proof, do however create an estoppel and shifts the burden of proof. Unless shown to be incorrect, the same would obviously serve as an effective and valid proof of the admitted facts. 22. The appellant has also taken the plea before us that they intended to foreclose their unit and had thought of approaching the Settlement Commission for settlement of the outstanding matters. We do not intend to weigh this as a ground either in favour or against the appellant, however would simply like to state that reading between the lines, the same is not only suggestive of intent to commit crime and mens rea, but also indicates a tacit admission of the ....
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....sary that any such verification in law is only required to be so done directly - it could also get testified admittedly. Moreover, the fact of answering intricate details contained in these documents, besides establishing its contents also brings out the role of the Directors. 24. The Director, in his testimony has asserted that he was in agreement with the statements rendered by one Shri Sudipto Bhattacharya, whom he also stated to be "one of our oldest employees". Not only has the Director spoken about intricate and minute details and working of their factory operations, he has also explained to the authorities about the "System of Receipt of payment in case of clandestine clearances of finished goods ............................" "Answer - Payment in case of clandestine sale of goods without payment of Central Excise duty are received in cash which comes to us directly from the buyers to our Head Office. As our business is a family and the directors are the beneficiaries of any income. We the directors work under our father Sri Sitaram Agarwal, MD of M/s. Super Smelters Ltd." 25. We have also gone through the appellant's submissions to the effect and reliance on v....
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....atter. 27. We also discount the appellant's contention to term the evidence on record as 'hearsay evidence', as the grounds taken by the Revenue are all borne out of records, that have also been owned up, and hence no further or independent corroboration thereof is called for. As discussed in this order, the evidence tendered by the appellant's own employees does not fall in the realm of third party evidence. Likewise, while the appellants have referred to in their Grounds of Appeal, certain case laws to challenge the manner of stock-taking, we are of the view that in view of peculiar facts and circumstances this case, the same do not come to the aid of the appellant and cognizance thereof is not called for. In any case, every matter would depend upon the peculiarity and characteristics of its own case and to hold that in a given matter the courts have gone foul of the manner of stock-taking and so be it in another, cannot be an argument of universal applicability. Unless the complete set of facts of the relied upon and the compared matter, mirror themselves, no generalized inference can be drawn in the matter. For reasons thus, it is not imperative to comment on each of such ca....
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.... in this case, is however not a matter of right. In fact, it is a tool deployed by jurists to ascertain the truth. It is well established that where documentary evidence is available on records and has been admitted and owned upon, its independent corroboration by way of cross-examination may not be necessary.( Sri Satish Kumar v. Addl.Commissioner of Customs, ICD, PPG &Ors. [2025 (5) TMI - 1539 - Delhi High Court] 31. It is too well known, as also held by the apex court in the case of Telestar Travels Ltd. &Ors.Spl. Dir. (Enforcement) [2013 (2) TMI 396 (SC)] amongst several others, that the need for cross-examination would depend on facts and circumstances of a case and need not be given as a matter of right in all cases. It is only warranted in such cases where the party seeking an opportunity to cross-examine is able to demonstrate that prejudice would be caused in the absence thereof. The statement recorded by the authorities in the present case, is only a corroboratory piece of evidence of the undisputed documentary evidence, on record, retrieved from the appellant's computers or the loose slips recovered at the time of the visit that were hurriedly being destroyed by the p....
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..... Sukhwani v. Union of India - 1996 (83) ELT 258 (SC), Surjeet S. Chabra v. Union of India -1992 (89) ELT 646 (SC)]. In the case of Assistant Collector of Madras-I vs. GovindasamyRagupathy [1998 (98) ELT 50 (Mad.)], admitting a confessional statement, the hon'ble High Court,held that the burden to establish that the same was not voluntary was on the maker of the statement. The hon'ble High Court further held that a lighter view was not required to be taken in case of economic offences. It has been settled no less but by the hon'ble apex court, that in matters concerned with clandestine activity, the investigating agencies are not required to establish their case with a mathematical precision, to a demonstrable degree [Collector of Customs, Madras v. D.Bhoormal - 1983 (13) ELT 1546 (SC)]. 34. As for the imposition of penalty on the Directors, we note that the adjudicating authority has at length and convincingly discussed the active involvement of the noticees and brought out the role played by each of the said Directors in Para 9 (i), (ii) & (iii) read with Para 13.6 and 13.8 of his order. Further, in view of our findings and discussions above, we note that by way of their contu....