TaxTMI 
TaxTMI 
2026 (4) TMI 1074
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....Limited, Giridih, Jharkhand (Closed since June 2017) 2. M/s. Hotel Ashoka International, (Belonging to 1 Director) 3. Alleged Secret Office. 23.01.2018 Statement was recorded of: 1. Ranjan Kumar Singh Authorised Signatory-cum-Accountant; 2. Bablu Kumar (Director) 12.02.2018 Statement was recorded of Shri Ashok Singh (Director). 24.04.2018 Yet again, statements were recorded of (i) Ranjan Kumar Singh, Authorised Signatory; (ii) Bablu Kumar (Director) 11.03.2019 Demand-cum-Show Cause Notice issued to the Appellant. Allegations Levelled: (i) Clandestine Clearance of finished excisable goods (ii) Difference in Stock (iii) Suppression in actual production and clearance (iv) Demand and recovery of Central Excise Duty amounting to Rs.3,03,68,060/- (v) Interest (vi) Penalty of Rs.3,03,68,060/- (vii) Separate, penalty of Rs.30,00,000/- imposed on Ashok Singh (MD). 2.1 Being aggrieved with the order of the adjudicating authority, the appellants are before us. 3. The ld.Counsel appearing on behalf of the appellant, submits that the entire Show Caus....
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....ica Iron & Steels Private Limited vs Commissioner of Central Excise, Customs & Service Tax reported in 2021 (12) TMI 958 - CESTAT Kolkata * Commissioner of C. EX. & S.T., Udaipur v Mittal Pigment Pvt. Ltd. reported in 2018 (16) G.S.T.L. 41 (Raj.) * Bihar Foundary& Castings Ltd. vs. CCE, Ranchi reported in 2019 (8) TMI 527 - CESTAT Kolkata * Commissioner of Central Excise, Bhubaneswar-I v. Minakshi Steels reported in 2005 (190) E.L.T. 395 (Tri. - Kolkata) 3.2 It is his contention that the Revenue's entire allegation is based on assumptions and presumptions derived from private records seized from the appellants and therefore, the same cannot be relied as evidence to allege clandestine removal. To support his contentions, he relies on the following decisions : * Aswani & Co. vs CCE, Delhi reported in 2015 (327) ELT 81 (Tri-Del) * Rudra Ventures Pvt Ltd vs CCE reported in 2016 (344) ELT 472 (Tri-Chan) * CCE vs PD Industries Pvt Ltd reported in 2016 (340) ELT 249 (Tri-Del) 3.3 He further submits that the Ld. Adjudicating Authority has arbitrarily assumed that: a) Entries therein pertain to clearances effected by the A....
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....al Excise Act are not complied with. It is his submission that the impugned Order places heavy reliance on various statements recorded under Section 14 of the Central Excise Act, 1944 to allege clandestine removal of goods and to raise the impugned demand. The appellants submit that it is a settled legal position that the statement recorded under Section 14 of Central Excise Act, 1944, before the gazetted Central Excise Officer during the course of investigation cannot be relied upon, unless procedure prescribed under Section 9D of the said Act is strictly followed. He further submits that a careful reading of Section 9D of the Central Excise Act, 1944 makes it abundantly clear that no reliance can be placed on any statement recorded under Section 14 of the said Act, unless the person who made the statement is first examined as a witness before the adjudicating authority. Such a statement may be admitted in evidence only after the witness has been subjected to examination-in-chief and cross examination, thereby affording both sides a fair opportunity to test the veracity and reliability of the statement. The use of the word "shall" in Section 9D (1), makes it clear that the procedu....
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.... which is mandatory in nature. He submits that the impugned order alleging clandestine removal of goods is primarily based on data and computer printouts retrieved from pen drives and hard disks. A pen drive/hard disk is a floating device and has no evidentiary value on its own and can be admitted as evidence only when it strictly fulfils the conditions specified in Section 36B of the Act. He submits that Section 36B of the Act states that the statement contained in a computer printout shall be deemed to be a document for the purposes of the Act and the rules made thereunder and shall be admissible as evidence of the contents of its original, if the conditions mentioned in subsection (2) and other provisions of the Section are satisfied in relation to the statement and the computer in question. The very admissibility of such a document, i.e., electronic record, depends on the satisfaction of the four conditions under Section 36B(2) which are: I. The electronic record must have been generated by the computer during a period in which it was regularly used to store or process information for activities consistently carried out by a person having lawful control over its use. ....
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....ited & Ors vs Commissioner, C.G.S.T. and Central Excise, Jamshedpur reported in 2024 (3) TMI 1037 (supra) * Parijat Paper Mills Ltd. & Ors vs Commissioner of Central Excise & CGST, Meerut reported in 2025 (5) TMI 1529 - CESTAT ALLAHABAD * JJ Extrusion Private Limited vs Commissioner of Central Excise & S. Tax (supra) * Popular Paints and Chemicals vs. CCE, Raipur reported in 2018 (8) TMI 473 - CESTAT New Delhi * Premium Packaging Pvt. Ltd. vs. CCE, Kanpur reported in 2005 (184) ELT 165 (Tri. - Del.) Therefore, in the absence of compliance with the statutory prerequisites under Section 36B(2) and (4) of the Act, the reliance placed on the contents of these pen drives/hard disks is wholly unsustainable in law. In this regard, it is submitted that the said decision of Hon'ble Supreme Court in the case of Shafhi Mohammad (supra) has been overruled by the Hon'ble Supreme Court (Three Bench) in the case of Arjun Panditrao KhotkarvsKailashKhushanraoGorantyal and Others reported in (2020) 7 SCC 1. 3.8 It is his further submission that the demand cannot be confirmed on the basis of stock shortage and more so, cannot be based on mere eye estimation a....
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....ise Appeal no. 75846 of 2022, judgment dated 24.02.2025) * M/s. Ramgarh Sponge Iron Private Limited Vs. Principal Commissioner, CGST & CX (Excise Appeal No. 75229 of 2024, judgment dated 05.09.2024) * M/s. Amiya Steel Private Limited Vs. Commissioner of CGST & CX, Bolpur (Excise Appeal No. 75485 of 2020, judgment dated 12.11.2025) * M/s. Shriram Power & Steel Private Limited Vs. Principal Commissioner, CGST & CX (Customs Appeal No. 75701 of 2019, judgment dated 14.10.2025) * M/s. Shriram Power & Steel Private Limited, M/s. Mahabir Prasad Rungta Vs. Commissioner of CGST & CX, Bolpur (Excise Appeal No. 75682, 75687 of 2023, judgment dated 26.11.2024) * Super Forgings & Steel Ltd. Vs. Commissioner of Central Excise, Kolkata-IV : (2024) 17 Centax 34 (Tri.-Cal) * Ambica Iron & Steel Pvt. Ltd. Vs. Commissioner of Central Excise, Customs & Service Tax, Rourkela : 2022 (380) ELT 351 (Tri.-Kolkata) 4. The ld.A.R. for the Revenue, has supported the impugned order. 5. Heard both sides and perused the records. 6. We find that the issues involved in these two appeals, are as follows : (a) Whether the allegation of clandesti....
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.... evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions; (ii) Evidence in support thereof should be of : (a) raw materials, in excess of that contained as per the statutory records; (b) instances of actual removal of unaccounted finished goods (not inferential or assumed) from the factory without payment of duty; (c) discovery of such finished goods outside the factory; (d) instances of sale of such goods to identified parties; (e) receipt of sale proceeds, whether by cheque or by cash, of such goods by the manufacturers or persons authorized by him; (f) use of electricity far in excess of what is necessary for manufacture of goods otherwise manufactured and validly cleared on payment of duty; (g) statements of buyers with some details of illicit manufacture and clearance; (h) proof of actual transportation of goods, cleared without payment of duty; (i) links between the documents recovered during the search and activities being carried on in the factory of production; etc. Needless to say, a precise enumeration of all situations in whic....
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....unal [Pan Parag India v. CCE, 2013 (291) E.L.T. 81], it has been held that the theory of preponderance of probability would be applicable only when there are strong evidences heading only to one and only one conclusion of clandestine activities. The said theory, cannot be adopted in cases of weak evidences of a doubtful nature. Where to manufacture huge quantities of final products the assessee require all the raw materials, there should be some evidence of huge quantities of raw materials being purchased. The demand was set aside in that case by this Tribunal." 7.2 As per the said guidelines framed by this Tribunal, there should be evidence in support of clandestine removal and raw materials found in excess of that contained as per statutory records. In this case, no effort has been made by the investigating team or the adjudicating authority, to find out the excess procurement of raw materials, if any, by the appellants. An inference has been drawn on the basis of the documents recovered from third party premises and documents found in the appellants' premises, recorded in their statutory records, and the difference has been treated to be arising due to clandestine removal of ....
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....the assessee as allegation of clandestine removal is a very serious charge and the onus of establishing the same is first on the department and upon the onus being discharged in the manner common to law, then and then only the burden of proof shifts to the assessee. In the instant case, admittedly there was no material on record establishing the charge of clandestine removal and such charge was made against the assessee by way of an inference taking note of the ratio adopted in the manufacturing process." 15. In view of the above, we answer the issue in favour of the appellants, that the allegation of clandestine removal of goods cannot be based on assumptions and presumptions without providing any corroborative evidence. Issue (b) Whether the allegation of clandestine removal can be established on the basis of private records in the absence of any corroborative evidence, or not ? 8. The said issue has been examined by this Tribunal in the case of Sharda Re-Rollers Pvt. Ltd. & ors. v. Commissioner of C.Ex., Cus. & S.T., Odisha [2025 (5) TMI 1281 - CESTAT, Kolkata], wherein it has been observed as under: "8. Moreover, in the case of K.Rajagopal vrs. Commissioner....
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....dity is fatal to this case and it can be easily concurred that Revenue has not proved the case with regard to the purchase of raw materials for manufacture of final product. 7. It is seen that the appellants have also brought to the notice of the Revenue that fireworks are required to be insured mandatorily while removing the same and various authorities are required to be informed and permission obtained Revenue has not examined this point in the correct perspective. The danger of removal and penal consequence of non-insurance is a serious matter and the Commissioner ought to have relied on same evidence to show as to how they could manufacture and remove such controlled explosive commodity without proper protection and insurance. Merely to give finding that such clandestine removal is done secretly and stealthily and they do not follow the law is not acceptable in the peculiar facts and circumstances of this case. There is no other corroborative evidence with regard to the sale and purchase by particular persons and there is no evidence of removal through any transporter and the transporters have not been examined and statements recorded. Each link in the aspect of produ....
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....is summarily dismissed. 11. Therefore, on the basis of private documents recovered from the factory of the appellant cannot be the basis to allege clandestine removal of goods in the absence of satisfying the tests laid down in the case of Arya Fibres Pvt. Ltd. (Supra). Further, in the statements recorded during the course of investigation has been relied the same is not the admissible evidence in the light of the decision of the Hon'ble Chhattisgarh High Court in the case of Hi Tech Abrasives Ltd. versus Commissioner of C. Excise & Customs, Raipur, 2018 (362) E.L.T. 961 (Chhattisgarh) wherein the Hon'ble High Court observed as under. "9.5. Undoubtedly, the proceedings are quasi criminal in nature because it results in imposition of not only of duty but also of penalty and in many cases, it may also lead to prosecution. The provisions contained in Section 9D, therefore, has to be construed strictly and held as mandatory and not mere directory. Therefore, unless the substantive provisions contained in Section 9D are complied with, the statement recorded during search and seizure operation by the investigation Officers cannot be treated to be relevant piece ....
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.... no allegation f threat, force, coercion, duress or pressure being utilized by the officers to extract the statements which corroborated each other. Besides the Managing Director of the company of his own volition deposition the amount of Rs. 11 lakh towards excise duty and therefore in the facts and circumstances of the present case, the aforesaid statement of the Counsel for the Respondents cannot be accepted. This fact clearly proves the conclusion that the statements of the concerned persons were of their volition and not outcome of any duress." Accordingly, on the first and second question of law, we hold that the statement of the Director could not be treated as relevant piece of evidence nor could be relied upon without compliance of Section 9D of the Act. The two questions of law accordingly, stand answered in that manner." 12. In view of the above discussion and observations it is alleged that appellants were involved in clandestine removal of goods on the basis of private records during the course of investigation and statements recorded during the course of investigation which were not corrugated by the tests laid down in the case of Arya Fibres Pvt. Lt....
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....s at the weigh bridge of all incoming raw material as well as of outgoing finished goods. On being asked to explain about the pink weighment slips and slip pad as recovered from JBIL-III, he stated that weight of the material which has to be cleared without invoices was being mentioned in these pink weighment slips which was later handed over to Shri Sushil Kumar Roy. This statement was later retracted y him during cross examination before the adjudicating authority. 13.3. On 17.07.2014, a search was also conducted at the Head Office of Jai Balaji Group in Kolkata. The officers took out printouts of some of the e-mails from company's mail -ID handled by Shri Diptendu Samui, who was working as Accounts officer. Two pen drives were recovered from the possession of Shri Anil Kumar Agarwal. The officers also resumed two laptops under a Panchnama. 13.4. A statement of Shri Diptendu Samui, Accounts Officer, was recorded wherein he was shown certain messages retrieved from his mobile phone. In the present proceedings, there were only two messages showing purchase of scrap of only 15 MT and 10 MT, totally 25 M.T of scrap purchased in cash. Shri Diptendu Samui in his cross....
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....ries were made by other associates like Shri Gautam Banerjee, Shri Samiran Bose and Shri Krishanu Bhattacharya. (iv) The data which was fed by him in the pen drives was fed on different computers. (v) He was pressurized to make these statements. (vi) He was told by the officers that if he did not make such statements, he would be arrested, but there would be no inconvenience if he stated as mentioned in the statements. (vii) That despite the entries in the pen drives about clearance of any consignments there was possibility of like order getting cancelled, the vehicle developing breakdown etc. (viii) Where some of the entries of duty payment had been left blank, he could not say with certainty that no duty was paid in cases of such goods as there was a possibility that duty had been paid on these goods later. (ix) When he was confronted with 3 pink weighment slips no 65, 66 & 67 all dated 16-07-2014 and asked whether he had made entries in pen drives in respect of these weighment slips, to which he answered that the relevant entries were made by Shri Gautam Banerjee who was another Data Entry Operator. (x) That inculpat....
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....e was responsible only for procurements of raw materials. Hence he was not in a position to comment about dispatches. (ii) Denied having dealt with the sale of finished goods by JBIL or any dispatches of the goods. (iii) Stated that he had left JBIL at the time recording of his of the statement. He was advised by the DGCEI officials to tender the statement as they desire so that he was free from further investigation. (iv) Stated that his statement was dictated by DGCEI officials. 13.9.7 Girish Tikmani in respect of statement dated 29-02-2015 He used to receive Pig Iron from JBIL III on the basis of invoices and weighment slips and was making payments to them through RTGS and cheques. (i) That he was never confronted with any computer printouts by the investigating officers while recording his statement dated 20-2-2015. (ii) Denied having received any goods from JBIL III without any bill. (iii) When confronted with the portion of the statement wherein he had stated having received the goods without bills from JBIL III he stated that he was surrounded by many officers and he was under great stress when he wrote ....
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....4-4-2016 issued by respondent No. 2 whereby respondent No. 2 has confirmed differential Central Excise Duty (hereinafter referred to "as duty") demand of Rs. 7,08,38,008/- with interest and equivalent penalty. It is contended that the impugned order-in-original has been passed in flagrant violation of Section 9D of the Central Excise Act, 1944 (hereinafter referred to as "the Act") by relying upon the statements recorded under Section 14 of the Act without first admitting them in evidence in accordance with the procedure prescribed in this regard by Section 9D(1)(b) of the Act. 4. In view of the fact that the case of the petitioner is essentially premised on Section 9D of the Central Excise Act, 1944, it would be appropriate to reproduce the said provision, in extenso, thus : "9D. Relevancy 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 ma....
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....n 9D(1), the truth of the facts contained in any statement, recorded before a Gazetted Central Excise Officer, has to be proved by evidence other than the statement itself. The evidentiary value of the statement, insofar as proving the truth of the contents thereof is concerned, is, therefore, completely lost, unless and until the case falls within the parameters of Section 9D(1). 9. The consequence would be that, in the absence of the circumstances specified in Section 9D(1), if the adjudicating authority relies on the statement, recorded during investigation in Central Excise, as evidence of the truth of the facts contained in the said statement, it has to be held that the adjudicating authority has relied on irrelevant material. Such reliance would, therefore, be vitiated in law and on facts. 10. Once the ambit of Section 9D(1) is thus recognized and understood, one has to turn to the circumstances referred to in the said sub-section, which are contained in clauses (a) and (b) thereof. 11. Clause (a) of Section 9D(1) refers to the following circumstances : (i) when the person who made the statement is dead, (ii) when the person who ma....
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....before the Gazetted Central Excise officer, which does not suffer from the handicaps contemplated by clause (a) of Section 9D (1) of the Act. The use of the word "shall" in Section 9D(1), makes it clear that, the provisions contemplated in the sub-section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory. 15. The rationale behind the above precaution contained in clause (b) of Section 9D (1) is obvious. The statement, recorded during inquiry/investigation, by the Gazetted Central Excise officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order 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, th....
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.... be placed on Para 16 of the judgment of the Allahabad High Court in C.C.E. v. Parmarth Iron Pvt Ltd., 2010 (260) E.L.T. 514 (All.), which, too, unequivocally expound the law thus : "If the Revenue choose (sic chose?) not to examine any witnesses in adjudication, their statements cannot be considered as evidence." 21. That adjudicating authorities are bound by the general principles of evidence, stands affirmed in the judgment of the Supreme Court in C.C. v. Bussa Overseas Properties Ltd., 2007 (216) E.L.T. 659 (S.C.), which upheld the decision of the Tribunal in Bussa Overseas Properties Ltd. v. C.C., 2001 (137) E.L.T. 637 (T). 22. It is clear, from a reading of the Order-in-Original dated 44-2016 supra, that Respondents No. 2 has, in the said Orders-in-Original, placed extensive reliance on the statements, recorded during investigation under Section 14 of the Act. He has not invoked clause (a) of sub-section (1) of Section 9D of the Act, by holding that attendance of the makers of the said statements could not be obtained for any of the reasons contemplated by the said clause. That being so, it was not open to Respondent No. 2 to rely on the said statem....
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....statements, should it choose to do so. In case any such request is made by the assessee, it would be incumbent on the adjudicating authority, i.e., on Respondent No. 2 to allow the said request, as it is trite and well-settled position in law that statements recorded behind the back of an assessee cannot be relied upon, in adjudication proceedings, without allowing the assessee an opportunity to test the said evidence by cross-examining the makers of the said statements. If at all authority is required for this proposition, reference may be made to the decisions of the Hon'ble Supreme Court in Arya Abhushan Bhandar v. U.O.I., 2002 (143) E.L.T. 25 (S.C.) and Swadeshi Polytex v. Collector, 2000 (122) E.L.T. 641 (S.C.). 25. The writ petition is allowed in the aforesaid terms." 13.12. Once it duly came on record that various statements recorded from the witnesses were not of voluntary nature but were recorded after putting undue pressure upon the witnesses the same could not be admitted in evidence by the Adjudicating Authority. The same clearly lost its evidentiary value. Once these statements are excluded from evidence no reliance could be placed on the computer pri....
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....Chhattisgarh), the Hon'ble High Court has held that unless the procedure laid down in Section 9D of the Central Excise Act, 1944 is followed in letter and spirit, no reliance can be placed on any statement recorded under Section 14 of the Central Excise Act, 1944. The relevant part of the judgement is reproduced below: 9. Findings on Substantial Questions of Law (i) & (ii) : We shall decide the first two substantial questions of law as they are overlapping. The submission of counsel for the appellant has been that firstly, the Director's statement was not admissible and secondly it cannot be treated as admission because in reply to Show Cause Notice, the said statement was stated to have been obtained under duress. We shall first examine the legal position with regard to the admissibility of the statement of Director which admittedly was taken during search operations by the investigation officers. 9.1 At the outset, it needs to be clarified that during the course of argument, Learned Counsel for the parties agreed that second substantial question of law is with regard to legality of procedure adopted by the adjudicating authority and not the Tribunal as ....
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....amined as witness before the Court. (her, the adjudicating authority). 9.2 At this juncture, we need to notice the provision contained in Section 9D which provides that sub-section (1) shall, as far as may be, applied in relation to the proceedings under the Act, other than the proceeding before the court, as they apply in relation to proceeding before the Court. This provision when read in juxtaposition, the small clauses (a) and (b) under sub-section (1), requirement of law of recording of examination as witness would be in relation to the proceedings before the adjudicating authority. 9.3 A conjoint reading of the provisions therefore reveals that a statement made and signed by a person before the Investigation Officer during the course of any inquiry or proceedings under the Act shall be relevant for the purposes of proving the truth of the facts which it contains in case other than those covered in clause (a), only when the person who made the statement is examined as witness in the case before the court (in the present case, Adjudicating Authority) and the court (Adjudicating Authority) forms an opinion that having regard to the circumstances of the case, th....
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....med as mandated under the law, the statement recorded by the Investigation Officer would not constitute the relevant and admissible evidence/material at all and has to be ignored. We have no hesitation to hold that the adjudicating officer as well as Customs, Excise and Service Tax Appellate Tribunal committed illegality in placing reliance upon the statement of Director Narayan Prasad Tekriwal which was recorded during investigation when his examination before the adjudicating authority in the proceedings instituted upon show cause notice was not recorded nor formation of an opinion that it requires to be admitted in the interest of justice. In taking this view, we find support from the decision in the case of Ambica International v. UOI rendered by the High Court of Punjab and Haryana. Reliance has been placed by the Counsel for the Revenue on the decision in the matter of Commissioner of Central Excise v. Kalvert Foods India Private Limited (Laws (SC) 2011 838) = 2011 (270) E.L.T. 643 (S.C.). That decision turned on its own facts. In para 19 of the judgment, it was concluded as below : We are of the considered opinion that it "19. is established from the record....
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.... manufacturing duplicate goods bearing M/s. Kuber brand names and clearing them in the market. The facts of the care are not in dispute, the appellants have raised the dispute that the statements recorded during the course of investigation cannot be relied upon as admissible evidence in terms of the provisions of Section 9D(2) of the Act. In that circumstance, it is better to extract the provisions of Section 9D which are reproduced as under :- "9D. Relevancy 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....
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....f proving the truth of the facts which it contains, in any prosecution for an offence under the Act in certain situations. Sub-section (2) extends the provision of sub-section (1) to any proceedings under the Act other than a proceeding before the Court. In this manner, Section 9D can be utilized in adjudication proceedings before the Collector as well. In the present case, provisions of Section 9-D of the Act were invoked by the Collector holding that it was not possible to procure the attendance of some of the witnesses without undue delay or expense. Whether such a finding was otherwise justified or not can be taken up in the appeal. 9. In other words, in the absence of the circumstances specified in Section 9D(1), the truth of the facts contained in any statement, recorded before a gazetted Central Excise officer, has to be proved by evidence other than the statement itself. The evidentiary value of the statement, in so far as proving the truth of the contents thereof is concerned, therefore, completely lost, unless and until the case falls within the parameters of Section 9D(1). Therefore, two steps are required to be followed by the adjudicating authority, under clau....
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....ence with an order of this nature. 11. We further find that in the case of Swiber Offshore Construction Pvt. Ltd. (supra), this Tribunal has further observed as under : 6. We therefore have no hesitation in holding that the impugned Order passed by the Commissioner as an adjudicating authority is appealable order in terms of Section 129A of the Act, even as per the ratio laid down in the above binding precedent. Request for cross-examination has been denied and the witnesses have not been examined despite specific reliance by the appellant on Section 138B without there being any objective formation of opinion based on any material on record to come to the conclusion that any specified circumstance mentioned in Section 138B(l)(a) exists. These circumstances mentioned in Section 138B(l)(a) are also contained in pari materia Section 9D(l)(a) and were recorded as follows in J.K. Cigarettes Ltd., 2009 (242) E.L.T. 189 (Del.). "25. Section 9D of the Act stipulates following five circumstances, already taken note of, under which statements previously recorded can be made relevant. These are :- (a) when the person who had given the statement is dead; ....
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.... again observed as under :- 24. The fact that in cases relating to smuggling or indeed any case civil or criminal cannot or need not been proved for degree of mathematical precision or that the department governed by strict rules of evidence is again no answer. The department is certainly bound by the contents of the Customs Act, 1962 and the general principles of evidence. which has been affirmed by the Apex Court. 13. We further find that Hon'ble Punjab & Haryana High Court in the case of Sukhwant Singh, it has been observed as under :- 8. It will be pertinent at this stage to refer to Section 138 of the Indian Evidence Act which provides : "138. Order of examinations. - Witnesses shall be first examined-in-chief then (if the adverse party so desires) cross-examined, then (if the party calling him so desires) re-examined. The examination and cross-examination must relate to relevant facts but the cross-examination need not be confined to the facts to which the witness testified on his examination-in-chief. Direction for re-examination. - The re-examination shall be directed to the explanation of matters referred to in....
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....xcise Act, 1944, which the Revenue has failed to do. 9.5 In these circumstances, we hold that the statements recorded during the course of investigation do not have any evidentiary value for alleging clandestine removal of goods on the part of the appellants. Accordingly, the said issue has been answered in favour of the appellants. Issue (d) Whether the print-outs taken from electronic equipment/pen-drives can be treated as admissible evidence without complying with the conditions prescribed under Section 36B of the Central Excise Act, 1944, or not ? 10. This Tribunal had an occasion to examine as to whether, without obtaining a certificate under Section 36B of the Central Excise Act, print-outs generated from personal computers or pendrives could be admitted as evidence or not in the case of M/s. Trikoot Iron & Steel Casting Ltd. v. Additional Director General (Adjn.), Directorate General of GST Intelligence (Adjudication Cell) [Final Order No. 58546 of 2024 dated 09.09.2024 in Excise Appeal No. 55779 of 2023 - CESTAT, New Delhi]. The relevant observations of the Tribunal in the aforesaid decision are reproduced below: - "15. To examine the issues that have b....
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....riod; or (c) in any other manner involving the successive operation over that period, in whatever order, of one or more computers and one or more combination 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. (4) In any proceedings under this Act and the rules made thereunder 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 document 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 ....
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.... with cases where any document is required to be produced as an evidence in proceedings under the Central Excise Act and the Rules framed thereunder. Such certificate should be signed by a person occupying a responsible position in relation to the operation of the device in question or the management of the relevant activities. In such a case it shall be evidence of any matter which is stated therein. It specifically mandates production of a certificate: (i) identifying the document containing the statement and describing the manner in which it was produced; (ii) 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, (iii) dealing with any of the matters to which the conditions mentioned in sub-section (2) relate. 19. The Central Excise Act contains a specific provision that describes the manner in which the admissibility of computer print outs will be accepted as evidence in proceedings initiated under the Central Excise Act. 20. In respect of section 65B of the Evidence Act, which is pari materia to the provisions o....
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....of the said activity. 14. Under Section 65B(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) The certificate must describe the manner in which the electronic record was produced; (c) The certificate must furnish the particulars of the device involved in the production of that record; (d) The certificate must deal with the applicable conditions mentioned under Section 65B(2) of the Evidence 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 e....
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....d in court, without due certification. Those CDs cannot be admitted in evidence since the mandatory requirements of Section 65B of the Evidence Act are not satisfied. It is clarified that notwithstanding what we have stated herein in the preceding paragraphs on the secondary evidence on electronic record with reference to Sections 59, 65A and 65B of the Evidence Act, if an electronic record as such is used as primary evidence under Section 62 of the Evidence Act, the same is admissible in evidence, without compliance of the conditions in Section 65B of the Evidence Act." (emphasis supplied) 21. The aforesaid judgment of Supreme Court in Anvar P. V. was followed by the Supreme Court in Arjun Panditrao Khotkar vs. Kailash Kushanrao Gorantyal & others [AIR 2020 SC 4908], though with a slight modification. The Supreme Court held that if the original device is not produced, then electronic record can be produced in accordance with section 65B (1) of the Evidence Act together with the requisite certificate under section 65B (4). The relevant portions of the judgment of the Supreme Court are reproduced below: "18. Sections 65A and 65B occur in Chapter V of the E....
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....e Evidence Act does not include electronic records. 22. Section 65B(2) then refers to the conditions that must be satisfied in respect of a computer output, and states that the test for being included in conditions 65B(2(a)) to 65(2(d)) is that the computer be regularly used to store or process information for purposes of activities regularly carried on in the period in question. The conditions mentioned in sub-sections 2(a) to 2(d) must be satisfied cumulatively. 23. Under Sub-section (4), a certificate is to be produced that identifies the electronic record containing the statement and describes the manner in which it is produced, or gives particulars of the device involved in the production of the electronic record to show that the electronic record was produced by a computer, by either a person occupying a responsible official position in relation to the operation of the relevant device; or a person who is in the management of "relevant activities" - whichever is appropriate. What is also of importance is that it shall be sufficient for such matter to be stated to the "best of the knowledge and belief of the person stating it. Here, "doing any of the following....
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....rst stored, is owned and/or operated by him. In cases where "the computer", as defined, happens to be a part of a "computer system" or "computer network" (as defined in the Information Technology Act, 2000) and it becomes impossible to physically bring such network or system to the Court, then the only means of proving information contained in such electronic record can be in accordance with Section 65B(1), together with the requisite certificate under Section 65B(4). This being the case, it is necessary to clarify what is contained in the last sentence in paragraph 24 of Anvar P.V. (supra) which reads as "...if an electronic record as such is used as primary evidence under Section 62 of the Evidence Act...". This may more appropriately be read without the words "under Section 62 of the Evidence Act,...". With this minor clarification, the law stated in paragraph 24 of Anvar P.V. (supra) does not need to be revisited. xxxxxxxxxxxx 72. The reference is thus answered by stating that: (a) Anvar P.V. (supra), as clarified by us hereinabove, is the law declared by this Court on Section 65B of the Evidence Act. The judgment in Tomaso Bruno (supra), being per in....
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....framed as indicated earlier, after considering the report of the Committee constituted by the Chief Justice's Conference in April, 2016. (emphasis supplied) 22. It transpires from the aforesaid two judgments of the Supreme Court in Anvar P. V. and Arjun Panditrao Khotkar that: (i) Any documentary evidence by way of an electronic record under the Evidence Act can be proved only in accordance with the procedure prescribed under section 65B of the Evidence Act. The purpose of this provision is to sanctify secondary evidence in electronic form generated by a computer; (ii) Any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer shall be deemed to be a document only if the conditions mentioned under sub-section (2) of section 65 of the Evidence Act are satisfied, without further proof or production of the original; (iii) In view of the provisions of section 65(4) of the Evidence Act, a certificate must accompany the electronic record like computer printout, compact disc, video compact disc or pen drive, pertaining to which a statement is sought to ....
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....f the same are produced in accordance with the provisions of Section 65B (2) of the Evidence Act. A certificate is also required to accompany the said of computer printouts as prescribed under section 65B(4) of Evidence Act. It has been clearly laid down in para 15 of this judgment that all the safeguards as prescribed in Section 65B (2) & (4), 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 tempering, alteration, transposition, excision etc without such safeguards, the whole trial based on proof of electronic records can lead to travesty of justice. We may add here that the provisions of Section 65B of Indian Evidence Act and Section 36B of Central Excise Act are pari materia. 15.3 It is evident from the appeal that the investigation officers while seizing has failed to take safeguards as mandated under section 36B of Central Excise Act. Further the cloning process of the hard-disks and retrieval of the data is admissible for want of cross examination of, Sh. Vipul Saxena, who has done cloning of the data from the computer system. We, therefore, h....
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....he credibility of the computer printout gets vitiated." (emphasis supplied) 26. The aforesaid decisions of the Tribunal, which are in the context of the provisions of section 36B of the Central Excise Act, hold that a printout generated from the personal computer that has been seized cannot be admitted in evidence unless the statutory conditions laid down in section 36B of the Central Excise Act are complied with. The decisions also hold that if the data is not stored in the computer but officers take out a printout from the hard disk drive by connecting it to the computer, then a certificate under section 36B of the Central Excise Act is mandatory. 27. The contentions advanced by learned counsel for the appellant and the learned authorized representative appearing for the department have to be examined in the light of the aforesaid observations. 28. What transpires from the two Panchnamas dated 04.07.2013 and 15.07.2013 is:- (i) The officers found that Vaibhav Goel "removed a hard disc from his kitchen and tried to throw it away"; (ii) During the search, the officers found "three computer monitors installed in a room on the first flo....
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....tioned in Annexure-A to the Panchanama; (xiv) Subsequently, on 15.07.2013 another Panchnama was drawn. The Panchnama records that the hard drive mentioned at serial no. 1 was attached with the CPU and printers resumed from the residence of Vaibhav Goel on 04.07.2013 and printouts of the data stored in the hard drive and Toshiba 4GB pen drive were taken; (xv) The other hard drives and pen drives did not contain any relevant data and so printouts were not taken. 29. It is not in dispute that the hard disk from which the printouts were subsequently taken was not found installed in the CPU. The Panchnama drawn on 04.07.2013 records that the officers found that Vaibhav Goel had removed a hard disc from his kitchen and had tried to throw it away. The panchnama does not mention that any officer had seen Vaibhav Goel actually remove the hard disc from the CPU. It only records that Vaibhav Goel had removed a hard disc from the kitchen and had tried to throw it away. At a different place, the panchnama records that the officers conducted a thorough search of the entire residential premises and found one hard disc hidden in a corner lying near the dog house. What ne....
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.... therefore, not possible to accept the contention advanced by the learned authorized representative appearing for the department that panchnama itself should be treated as a certificate or that the adjudicating authority was justified in itself examining whether the conditions set out in section 36B (4) of the Central Excise Act had been satisfied. 35. The impugned order dated 30.06.2021 passed by the adjudicating authority, therefore, cannot be sustained. It is, accordingly, set aside in so far as the appellant is concerned and the appeal is allowed." 10.1 On the basis of the above, we are of the view that a print-out generated from a personal computer or pen-drive, seized during the course of investigation, cannot be treated as admissible evidence unless the statutory condition prescribed under Section 36B of the Central Excise Act is complied with. Admittedly, the said condition has not been complied with in this case. Hence, the said print-outs recovered during the course of investigation are not admissible evidence to corroborate the allegation of clandestine removal of goods against the appellants in the present case. Therefore, the said issue is answered in favou....