TaxTMI 
TaxTMI 
2026 (5) TMI 1229
X X X X Extracts X X X X
X X X X Extracts X X X X
....Amount in dispute 1. E/77634/2018 M/s. Shreeji Ispat Ltd. June 2010 to 14.02.2013 OIO No. 28/Commr.Au dit/CEX/BBSR/ 2017-18 dtd. 27.03.2018 Duty Demand: Rs. 6,06,57,938/- Penalty u/s 11AC: Rs. 6,06,57,938/- 2. E/77635/2018 Surendra Kumar Behera Penalty u/r 26: Rs. 10,00,000/- 3. E/76432/2018 M/s. Shreeji Ispat Ltd. November 2012 to 06.02.2013 OIO No. 59/CCE/C.EX/ RKL/2017-18 dated 30.01.2018 Duty Demand: Rs. 3,35,36,642/- Penalty u/s 11AC: Rs. 3,35,36,642/- 4. E/76433/2018 Surendra Kumar Behera Penalty u/r 26: Rs. 1,00,000/- Appeal No(s): E/77634 & 77635/2018 3. The appellant-company, namely, M/s Shreeji Ispat Limited, having its factory at IDCO Plot No. 93110, New Industrial Estate, Jagatpur, Dist-Cuttack, Odisha, bearing Central Excise Registration No. AAFCS4401DEM001, is engaged in the manufacture of TMT Bars, M.S. Rods, M.S. Flats, M.S. Square Bars, M.S. Angles, M.S. Round, M.S. Scrap & Waste, etc. falling under Chapter 72 of the First Schedule to the Central Excise Tariff Act, 1985. The appellant maintains proper records of manufacture and removal of goods and files periodical statutory returns as prescribed und....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ra Office Assistant; and (c) Shri Surendra Kumar Behera, Managing Director (Co-noticee), who accepted the statements of Shri Patra and Shri Bhattacharya. 4.3. Subsequently, in his statement dated 19.06.2013, the Shri Surendra Kumar Behera, Managing Director of the appellant-company, stated that the entry 'K' in the pen drive data referred to "Bank" and asserted that the data contained fabricated/inflated figures prepared specifically for banking purposes to maintain cash credit limits. This position was corroborated by Shri Bishnu Prasad Nayak, Accountant, in his statement dated 12.06.2013, who explained that 'K-Bill' referred to bank-related figures and that the files contained exaggerated figures prepared to enhance credit limits with the banks, rather than representing actual manufacture or clearance of goods. 4.4. Consequent upon the search on 14.02.2013, the appellant made a voluntary payment of Rs. 31,00,000/- towards past Central Excise duty liability vide Challan dated 19.02.2013 and Challan (No. 90099) dated 20.06.2013. 5. Based on the search proceedings, a Show Cause Notice was issued to the appellants by the Additional Director General, DGCEI, Hyderabad....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ispat Ltd. and its Managing Director, Shri Surendra Kumar Behera, having filed the appeals bearing Nos. E/77634/2018 and E/77635/2018 respectively. Appeal No(s): E/76432 & 76433/2018 7. M/s Shreeji Ispat Limited (Furnace Division), having its factory at Tanto, Bhadrasahi, Barbil, DistKeonjhar, Odisha, (the appellant-company) bearing Central Excise Registration No. AAFCS4401DEM002, is engaged in the manufacture of M.S. Ingot falling under Chapter 72 of the First Schedule to the Central Excise Tariff Act, 1985. The factory has two crucible Induction furnaces of 8 MT capacity. The main raw materials are Sponge Iron, Pig Iron and HMS. Almost all the finished M.S. Ingots of the appellant herein are sold to its sister concern, M/s Shreeji Ispat Limited (Rolling Division) at Jagatpur, Cuttack. 8. Based on intelligence, officers of the DGCEI, Rourkela Regional Unit conducted simultaneous search operations on 14.02.2013 at: (i) The factory-cum-office premises of the appellant-company at Tanto, Bhadrasahi, Barbil, Dist. Keonjhar ("SIL factory, Tanto"); (ii) The factory-cum-office premises of M/s Shreeji Ispat Limited (Rolling Division) at IDCO Plot No. 93-110, New....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Shri Bishnu Prasad Nayak, in his statement dated 12.06.2013 (answer to question Nos. 21 and 22), categorically stated that the data in the pen drive was "meant for bank purpose" and that the file contained "actual purchase/sale of the company also some exaggerated figures of both sale and purchase has been posted to produce to bank." This position was corroborated by Shri Nitai Bhattacharya and the Managing Director Shri Surendra Kumar Behera, who reiterated that the data was fabricated for banking purposes. However, these aspects were not considered by the Revenue. 10. Based on the search proceedings, a Show Cause Notice bearing No. 35/2015 dated 16.09.2015 was issued to the appellants by the Additional Director General, DGCEI Zonal Unit, Hyderabad, proposing demand of Central Excise duty of Rs.3,25,59,847/-, Education Cess of Rs. 6,51,197/- and Higher Education Cess of Rs. 3,25,598/-, totalling to Rs. 3,35,36,642/- for the period from November 2012 to 06.02.2013, invoking the extended period of limitation under Section 11A(4) of the Central Excise Act, 1944. The said Notice also proposed recovery of interest under Section 11AA, penalty under Section 11AC read with Rule 25 of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t clinching and corroborative evidence on record. The impugned Orders having failed to do so, are liable to be set aside on this ground itself: (i) At the outset, it is submitted by the appellants that it is a settled principle of law that the charge of clandestine removal is a serious charge akin to fraud, which is required to be established with positive, affirmative and tangible evidence and the burden of establishing the said charge lies heavily upon the Revenue. It has been consistently held by the Hon'ble Courts and Tribunals that clinching evidence is required to be adduced to establish the said charge beyond a reasonable doubt. Demand based on presumptions and conjectures is required to be set aside. (ii) The entire allegation of clandestine removal of finished goods in the present case is based primarily on printouts taken from seized pen drives along with certain private records recovered from the residential premises of the Managing Director and the Manager, loose sheets recovered from the Accountant and e-mail printouts of daily production log sheets. There is no independent or corroborative evidence whatsoever to substantiate the grave allegation of c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es cogent and clinching evidence rather than a mere "preponderance of probability" or circumstantial inferences. The demand was set aside because the investigation failed to establish the fundamental pillars of illicit manufacture, including purchase of unaccounted raw materials, excess power consumption, transportation details, or proof of sale proceeds from identified buyers. (viii) In this context, reliance is also placed on the following judgments: (a) Continental Cement Company v. Union of India reported in 2014 (309) E.L.T. 411 (All.); (b) Arya Fibre Pvt. Ltd. vs. Commissioner of C.Ex, Ahmedabad reported in 2014 (311) ELT 529 (Tri-Ahm); (c) CCE, Kolkata-III v. Sai Sulphonate Pvt. Ltd. reported in 2022 (380) E.L.T. 441 (Cal.); (d) Ambica Iron & Steels Private Limited vs. Commissioner of Central Excise, Customs & Service Tax reported in 2021 (12) TMI 958 - CESTAT Kolkata; (e) Commissioner of C.Ex. & S.T., Udaipur v. Mittal Pigment Pvt. Ltd. reported in 2018 (16) G.S.T.L. 41 (Raj.); (f) Bihar Foundry & Castings Ltd. vs. CCE, Ranchi reported in 2019 (8) TMI 527 - CESTAT Kolkata; (g) Commissioner of Central Ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... conditions under Section 36B(2), namely: (a) 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; (b) the type of information contained in the electronic record must have been regularly entered into the computer in the ordinary course of the said activity; (c) during the relevant period, the computer was functioning properly; and (d) the information contained in the electronic record must be a reproduction of, or derived from, data that was entered into the computer in the ordinary course of the said activity. (ii) In the present case, the requirements of Section 36B(2) & (4) of the Central Excise Act, 1944 were not complied with. In the present case, the printouts were obtained from pen drives, which are merely storage devices and not original computers used by the appellant-company for maintaining business records. These pen drives were neither proved to belong exclusively to the Appellant nor were they demonstrated to contain authentic business records. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Central Excise & S. Tax reported in 2025-VIL-320-CESTAT-KOL-CE; (f) Popular Paints and Chemicals vs. CCE, Raipur reported in 2018 (8) TMI 473 - CESTAT New Delhi (g) Premium Packaging Pvt. Ltd. vs. CCE, Kanpur reported in 2005 (184) ELT 165 (Tri. - Del.); (viii) 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 the pen drive is wholly unsustainable in law. (ix) It is further submitted that even otherwise the contents of the said pen drive stand duly explained by the Appellant. As categorically stated by Shri Bishnu Prasad Nayak, the Accountant who authored the pen drive data, the figures contained in such records were merely fabricated/estimated projections prepared for submission to the banks for the purpose of enhancement of credit limits, and do not represent actual production or clearance of goods. The said explanation was duly placed before the Adjudicating Authority along with correlation to book debts demonstrating that the excess book debt declared to banks tallied with the fabricated figures in the seized documents. However, the same wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....so placed on the judgement of the Tribunal in the case of Shri Mahavir Ferro Alloys Pvt. Ltd. and Shri Vicky Jain, Managing Director Vs. Commissioner of CGST & C.Ex. [2025 (2) TMI 477], whereby it was held that when the demand itself is not sustainable, penalty cannot be imposed. (iv) That on the aforesaid facts, the appellants most humbly submit that the Department has failed to prove the charges of clandestine removal and the impugned orders demanding the unprecedented demands without any legal basis are liable to be set aside along with interest and penalties imposed thereon. D. Penalty under Rule 26 of the Central Excise Rules, 2002 against the Managing Director is illegal, arbitrary and against the principle of natural justice: (i) It has been submitted in regard to the imposition of penalty on Shri Surendra Kumar Behera, Managing Director (co-appellant) that no specific role of the Managing Director has been established in the alleged offence. It is submitted that it is settled law that when penalty has been imposed on a company, there is no question of imposing personal penalty on the employee/key managerial person of the said company as well. Refe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....equested the adjudicating authority for an opportunity to cross-examine the alleged buyers whose statements were recorded during investigation and relied upon in the adjudication proceedings; however, the said request was not acceded to by the adjudicating authority. Thus, it is the contention of the appellants that the procedural requirements under Section 9D have not been fulfilled, and the statements have no evidentiary value as they were not subjected to examination-in-chief before the adjudicating authority and the witnesses were not produced for cross-examination as stipulated under Section 9D(1)(b) of the Act; thus, the impugned order in respect of these appeals stands vitiated on account of a gross violation of the principles of natural justice inasmuch as the appellant was not afforded an opportunity to cross-examine the witnesses whose statements have been primarily relied upon to allege clandestine removal; that it is a settled position of law that where any adverse or inculpatory statement is relied upon by the adjudicating authority to fasten liability or sustain a demand, it becomes imperative, in keeping with the principles of natural justice, to offer the party a fa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rcise would be revenue neutral inasmuch as the finished goods (M.S. Ingot) manufactured by the appellant at its Furnace Division at Tanto, Barbil were admittedly sold almost entirely to its own sister concern, M/s Shreeji Ispat Limited (Rolling Division) at IDCO Plot No. 93-110, Jagatpur, Cuttack; that both the units are under the common management and control of the same Managing Director, Shri Surendra Kumar Behera, and share a common financial structure. In such circumstances, it is their stand that any Central Excise duty paid by the appellant (Furnace Division) on its clearances of M.S. Ingot would have been available as eligible CENVAT credit to the receiving unit, i.e., the Rolling Division at Cuttack, for utilisation against its own duty liability on the manufacture of TMT Bars, M.S. Rods, Flats, Angles, etc. The net effect on the Government revenue would therefore be nil, and the entire demand is revenue neutral. Reliance in this regard is placed on the judgement of this Tribunal in the case of Shri Mahavir Ferro Alloys Pvt. Ltd. and Shri Vicky Jain, Managing Director Vs. Commissioner of CGST & Central Excise, Rourkela [2025 (2) TMI 477 - CESTAT Kolkata], wherein, in an id....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lants, or not. Issue (A): Whether the allegation of clandestine removal of goods can be based on assumptions and presumptions without providing any corroborative evidence, or not. 16. We find that in this case, the sole allegation against the appellant is that they have cleared their goods clandestinely without payment of appropriate duties of excise thereof, which is based mainly on the pen drive recovered from the possession of Shri Manas Ranjan Patra, Office Assistant of the appellant company and the documents contained therein, along with certain other documents, certain private records recovered and the statements of some of the buyers. 16.1. The charge of clandestine removal is a very serious charge and thus, the same has to be established by way of documentary evidence, which can be relied upon during the course of adjudication proceedings. To allege clandestine removal of goods, guidelines have been laid down by this Tribunal in the case of M/s. Arya Fibres Pvt. Ltd. v. Commissioner of Central Excise, Ahmedabad [2014 (311) E.L.T. 529 (Tri. - Ahmd.)] which are as follows: - "40. After having very carefully considered the law laid down by this Tribunal in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... E.L.T., dated 29-7-2013, when the present case was being argued before us, perhaps, not available to the parties. However, we have, in that decision, applied the law, as laid down in the earlier cases, some of which now have been placed before us. The crux of the decision is that reliance on private/internal records maintained for internal control cannot be the sole basis for demand. There should be corroborative evidence by way of statements of purchasers, distributors or dealers, record of unaccounted raw material purchased or consumed and not merely the recording of confessional statements. A co-ordinate Bench of this Tribunal has, in another decision, reported in the E.L.T. issue of 5-8-2013 (after hearings in the present appeals were concluded), once again reiterated the same principles, after considering the entire case-law on the subject [Hindustan Machines v. CCE [2013 (294) E.L.T. 43]. Members of Bench having hearing initially differed, the matter was referred to a third Member, who held that clandestine manufacture and clearances were not established by the Revenue. We are not going into it in detail, since the learned Counsels on either side may not have had the opportu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bring in evidence of any unexplained cash or bank deposits at the premises of the appellants herein. 16.4. In such circumstances, by relying upon the decision in the case of M/s. Arya Fibres Pvt. Ltd. (supra), we hold that the charge of clandestine removal has only been made on the basis of assumptions and presumptions, without any thorough investigation. 16.5. Further, in the case of Commissioner of Central Excise, Kolkata-III v. M/s. Sai Sulphonate Pvt. Ltd. [2022 (380) E.L.T. 441 (Cal.)], the Hon'ble High Court at Calcutta has observed as under: - "6. In our considered view, the Tribunal rightly granted the relief to 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." 16.6. In view of the above observations, we....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng officers to have sought explanation from the said Accountant with regard to the entries made therein. Nonexamination of the Accountant has rendered the document inadmissible evidence. The findings recorded in para 16 that the Accountant is now not available and his whereabouts could not be traced is not acceptable for the reason that at the time of the raid and the seizure of the notebook, the said Accountant was very much present. Be that as it may, the Revenue is required to show that appellants have purchased raw materials valued more than Rs. 1.09 crores. It is the specific plea of the appellants that the inputs are supplied under licence under the Explosives Act and they are required to purchase only through governmental sources. This was explained by the Managing Partner when he was examined by the Investigating officers. Therefore, at the time of investigation, it was the duty of the said officers to have contacted the supplier of Governmental agency and examined them and should have seen through their records as to whether the appellants have purchased such huge quantities of inputs for manufacture of the fireworks. The said nonexamination of the supplier of raw material....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....Ex. Chandigarh versus Laxmi Engineering recovered during raid and corroborated by some supportable evidence holding that there was an attempt of clandestine production and removal of goods then it is necessary to have some positive evidence of clandestine production and removal of the goods. Admittedly, no such evidence is produced by the Revenue therefore, demand against the appellant is not sustainable. 10. We further take note of the fact that in the case of Commissioner of Central Excise, Haldia versus Lord's Chemicals Ltd. 2010 (258) E.LT. 48 (Cal.) the Hon'ble High Court observed as under. "2. Admittedly, a show cause notice was issued on the presumption that the entries, as recorded in the private note book maintained by the labour contractor, should be taken as the clearance figures of finished products from the factory. It is settled law that such presumption is not permissible. The presumption, on the basis of which the show cause notice was issued, was misplaced in the absence of any corroborating, reliable and independent evidence. Therefore, the Tribunal below was right in rejecting the contention of the revenue and in accepting the contentio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rded 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 Pvt. Ltd. (Laws (SC) 2011 838)=2011 (270) E.L.T. 643 (S.C). That decision turned on its own facts. In para 19 of the judgement, it was concluded as below: "19. We are of the considered opinion that it is established from the record that the aforesaid statements were given by the concerned....
X X X X Extracts X X X X
X X X X Extracts X X X X
....all be deemed to be admissible as evidence only if the conditions laid down therein are satisfied. The admissibility of such electronic records is subject to the following conditions: - a. 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; b. the type of information contained in the electronic record must have been regularly entered into the computer in the ordinary course of the said activity; c. during the relevant period, the computer was functioning properly; and d. the information contained in the electronic record must be a reproduction of, or derived from, data that was entered into the computer in the ordinary course of the said activity. 18.2. In the present case, the print-outs obtained from the pen drives were required to be examined in terms of Section 36B of the Central Excise Act, 1944, which is in pari materia with Section 65B(4) of the erstwhile Indian Evidence Act, 1872, but the Revenue has failed to do so. The said pen drives were neither proved to b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 reproduces 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 (c) in any other manner involving the successive operation over that period, in whatever order, of one or more computer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sults 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. 16. Section 3 of the Evidence Act defines "document" as follows: "'Document. - "Document" means any matter expressed or described upon any substance by means of letter, figures or marks, or by more than one of those means, intended to be used, or which may be used, for the purpose of recording that matter." 17. "Evidence" in section 3 of the Evidence Act is defined as follows: "Evidence." -- "Evidence" means and includes - (1) all statements which the Court permits or requires to be made before it by witnesses, in relation to matters of fact under inquiry; Such statements are called oral evidence; (2) all documents including electronic records produced for the inspection of the Court; such documents are called documentary evidence." 18. Section 36B of the Central Excise Act deals with cases where any document is required to be produced as an evidence in proceedings under the Central Excise Act and the Rules framed thereund....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons under Section 65B(2). Following are the specified conditions under Section 65B (2) of the Evidence Act: (i) The electronic record containing the information should have been produced by the computer during the period over which the same was regularly used to store or process information for the purpose of any activity regularly carried on over that period by the person having lawful control over the use of that computer; (ii) The information of the kind contained in electronic record or of the kind from which the information is derived was regularly fed into the computer in the ordinary course of the said activity; (iii) During the material part of the said period, the computer was operating properly and that even if it was not operating properly for some time, the break or breaks had not affected either the record or the accuracy of its contents; and (iv) The information contained in the record should be a reproduction or derivation from the information fed into the computer in the ordinary course 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... electronic record by way of secondary evidence shall not be admitted in evidence unless the requirements under Section 65B are satisfied. Thus, in the case of CD, VCD, chip, etc., the same shall be accompanied by the certificate in terms of Section 65B obtained at the time of taking the document, without which, the secondary evidence pertaining to that electronic record, is inadmissible. xxxxxxxxxxxxx 24. The situation would have been different had the appellant adduced primary evidence, by making available in evidence, the CDs used for announcement and songs. Had those CDs used for objectionable songs or announcements been duly got seized through the police or Election Commission and had the same been used as primary evidence, the High Court could have played the same in court to see whether the allegations were true. That is not the situation in this case. The speeches, songs and announcements were recorded using other instruments and by feeding them into a computer, CDs were made therefrom which were produced 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....let us have a closer look at Sections 65A and 65B. 20. It will first be noticed that the subject matter of Sections 65A and 65B of the Evidence Act is proof of information contained in electronic records. The marginal note to Section 65A indicates that 'special provisions as to evidence relating to electronic records are laid down in this provision. The marginal note to Section 65B then refers to 'admissibility of electronic records. 21. Section 65B(1) opens with a non-obstante clause, and makes it clear that any information that is 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, and shall be admissible in any proceedings without further proof of production of the original, as evidence of the contents of the original or of any facts stated therein of which direct evidence would be admissible. The deeming fiction is for the reason that 'document' as defined by Section 3 of the 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, a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on 65B, which is a special provision in this behalf - Sections 62 to 65 being irrelevant for this purpose. However, Section 65B(1) clearly differentiates between the "original" document - which would be the original "electronic record" contained in the "computer" in which the original information is first stored - and the computer output containing such information, which then may be treated as evidence of the contents of the "original" document. All this necessarily shows that Section 65B differentiates between the original information contained in the "computer" itself and copies made therefrom - the former being primary evidence, and the latter being secondary evidence. 32. Quite obviously, the requisite certificate in sub-section (4) is unnecessary if the original document itself is produced. This can be done by the owner of a laptop computer, a computer tablet or even a mobile phone, by stepping into the witness box and proving that the concerned device, on which the original information is first 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 Infor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....need to revisited. (c) The general directions issued in paragraph 62 (supra) shall hereafter be followed by courts that deal with electronic evidence, to ensure their preservation, and production of certificate at the appropriate stage. These directions shall apply in all proceedings, till rules and directions under Section 67C of the Information Technology Act and data retention conditions are formulated for compliance by telecom and internet service providers. (d) Appropriate rules and directions should be framed in exercise of the Information Technology Act, by exercising powers such as in Section 67C, and also framing suitable rules for the retention of data involved in trial of offences, their segregation, rules of chain of custody, stamping and record maintenance, for the entire duration of trials and appeals, and also in regard to preservation of the meta data to avoid corruption. Likewise, appropriate rules for preservation, retrieval and production of electronic record, should be framed as indicated earlier, after considering the report of the Committee constituted by the Chief Justice's Conference in April, 2016. (emphasis supplied) 22.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ld that "computer printout were relied on by the Adjudicating Authority for recording a finding of clandestine manufacture and clearance of excisable goods. It was found by the Tribunal that printouts were neither authenticated nor recovered under Mahazar... The Tribunal rejected the printouts... Nothing contained in the printout generated by the PC can be admitted as evidence." In this case also, we find that the parallel situation as to the decision of Premier Instruments & Controls (supra). 13. Therefore, the printout generated from the PC seized cannot be admitted into evidence for non-fulfillment of statutory condition of Section 36B of the Central Excise Act, 1944." (emphasis supplied) 24. In Popular Paints and Chemicals vs. Commissioner of Central Excise and Customs, Raipur [Excise Appeals No. 52738 of 2016 decided on 06.08.2018], the Tribunal observed: "15.2. Thus, it has been clearly laid down by the Supreme Court that the computer printout can be admitted in evidence only if 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 pri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....but the officers had taken the printout from the Hard Disk 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. In such situation, it is difficult to accept the printout as an evidence to support the allegations of the revenue. It is noted that the requirement of certificate under Section 36B (4) is also to substantiate the veracity of truth in the operation of electronic media. We also agree with the contention of the appellants that at the time of sealing and de-sealing of the external data storage device as well as the time of obtaining printouts therefrom, a certificate should have been obtained as per the provision of Section36B of the Act. No such certificate has been brought on record without which the evidentiary value of these printout get vitiated. As no certificate from the responsible person of the Appellants was obtained by the department, the credibility of the computer printout gets vitiated." (emphasis supplied) 26. The aforesaid decisions of the Tribunal, which are in the cont....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng printer Canon LBP 2900B (available in the residence) with site key and license key". (x) On being asked how these keys can be taken, Vaibhav Goel stated that he would have to talk to an expert and on direction of Vaibhav Goel, Mohit Vaish spoke to one Dua, who on mobile informed after some time that site key is 'EIGIDADEJTBO' and license key is 'HJHTVOGSVQ'. (xi) Mohit Vaish configured the printer and started taking printouts of sale, purchase and cash data, which is stated to contain both accounted and unaccounted transaction; (xii) Some printouts from one of the pen drive Toshiba 4GB that was recovered were also taken after connecting the same with the CPU; (xiii) Since the whole process of taking of printouts of the data in the CPU and the pen-drive was taking time and printing stated mal-functioning, the officers discontinued the process of taking printout and seized the three Hard disks and seven pen drives properly. Details of the seized hard discs and pen drives were mentioned in Annexure-A to the Panchanama; (xiv) Subsequently, on 15.07.2013 another Panchnama was drawn. The Panchnama records that the hard drive....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ged in clandestine removal, were taken both on 04.07.2013 and on 15.07.2013 by placing the recovered hard disc and pen drive in the CPU. 32. It is, therefore, clear that the CPU did not contain the hard disk. The hard disk was in fact picked up from the corner of the room. No attempt was made by the department to admit the hard disk and the pen drive in evidence. The required certificate under section 36B (4) of the Central Excise Act was also not produced. Thus, no reliance can be placed on the printouts, in view of the two judgments of the Supreme Court in Anvar P. V. and Arjun Panditrao Khotkar and the three decisions of the Tribunal in Agarvanshi Aluminium, Popular Paints and Chemicals and Global Extrusion. 33. The adjudicating authority, on its own, examined the oral evidence on the points required to be stated in the certificate. This is not permissible in law. The confirmation of demand is based only on the printouts taken after connecting the hard disk and the pen drive to the computer. 34. It is, therefore, not possible to accept the contention advanced by the learned authorized representative appearing for the department that panchnama itself sh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uld not satisfy the requirement of Section 36B.The question of genuineness or otherwise of computer printout will arise only if conditions of Section 36B are satisfied. 12.2 Regarding relying upon the data recovered from the computers, one of the main objection of the Appellants is that the computer printouts are not admissible in evidence as conditions under section 36B(2)/36B(4) are not satisfied. It is the contention of the Appellants that the computer print outs taken from the seized computers are not accompanied with Certificate as mandated under section 36B(4) containing the following details: (a) describing the manner in which the data retrieved from the computer(electronic record) was produced (b) the certificate must furnish the particulars of the device involved in the production of that record (the computer used for production of electronic record. Any admission of clandestine removal as per computerised sale register not relevant unless condition of Section 36B are satisfied. Provisions of Section 36B are mandatory in nature. Computer printout/electronic record cannot be proved by oral evidences. 12.3 The Appellant has relied on the d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....observations hereinabove, we hold that the said print-outs taken from the pen drives and other electronic equipment, recovered during the course of investigation, are not admissible as evidence to corroborate the allegation of clandestine removal of goods against the appellants in the present case. Therefore, the said issue is answered in favour of the appellants. Issue (D): Whether the said statements have any evidentiary value without complying with the procedure laid down under Section 9D of the Central Excise Act, 1944, or not. 19. In this case, the Revenue has placed reliance on statements of various buyers recorded under Section 14 of the Central Excise Act, 1944 during the course of investigation, to allege clandestine removal of goods and to confirm the demands. It is the settled position of law that statements recorded during investigation cannot be relied upon unless the procedure prescribed under Section 9D of the Central Excise Act, 1944 is strictly followed. Regarding the evidentiary value of the statements without complying with the procedure laid down under Section 9D of the Central Excise Act, the said issue has already been examined by this Tribunal in the ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ptendu Samui in his cross examination had categorically stated that both the above entries of purchase of 25 M.T. of scrap was accounted for in their books of records. 13.5 A statement of Shri Raghunath Jhunjhunwala, weighbridge in-charge of JBIL IV was recorded, wherein he, inter alia, explained the procedure of weighment of raw materials and finished goods. He uses a pink slip for final weighment. He was shown pink slip Nos. 77, 79 both dated 18-08-2013 recovered from M/s. Baba Strips & Tubes Ltd on 304-2014 to which he stated that slip No. 77 & 78 was in his handwriting whereas slip No. 79 was in the handwriting of Rudra Tapas. 13.6 A statement of Shri Partho Sarkar, Associate Manager Excise of JBIL-IV was recorded wherein he stated that central excise duty was paid only on the invoices prepared and kept in statutory records. If invoice was not prepared for any consignment, no central excise duty was paid by JBIL-IV. No further investigation was conducted to substantiate this evidence. 13.7 A statement of Shri Anup Kumar Aggarwal, former Vice-President(Commercial) of Group Company was recorded wherein he, inter alia, stated that while working with Jai ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erator. (x) That inculpatory portions of his statements were recorded by the officers under pressure. (xi) He had no idea whether the goods were cleared to Shri Girish Tikmani without payment of duty. 13.9.2Kanhaiya Aggarwal in respect of statement 17-07-2014 The pink slips were prepared in all cases where computer slips was generated. (i) The question of clearances of goods without payment of duty on the strength of pink slips did not arise as his role was limited to weighment of the goods and issuance of weighment slips. (ii) He categorically stated that he was asked to say that the goods were cleared without payment of duty. (iii) In some cases the goods were not cleared after weighment due to various reasons such as breakdown of the vehicle. (iv) Not responsible for the dispatch of the goods. 13.9.3. Raghu Nath Jhunjhunwala in respect of statement dated 17-11-2014 (i)That there were occasions when the vehicle broke down and when some orders were cancelled the goods did not leave the factory despite issuance of pink slips. (ii) Pink slip number 77 which was in his handwriting he wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under great stress when he wrote his statement. (iv) Informed that he had retracted from his statement on the very next day and brought on record notarized affidavit dated 21-2-2015. 13.10. From the above, we observe that during the course of cross examination, most of the persons who have given the statements retracted their statements. In the impugned order, the adjudicating authority has held that if the statements were recorded under threats and duress, it is not understood as to what prevented them from retracting their statements within a reasonable period of time. She further held that all the statements of the concerned persons were supported by documentary evidences. Accordingly, she justified in demanding duty by relying upon these statements. However, a perusal of Section 9D of the Central Excise Act, 1944 clearly establishes that unless a person who has made the statement is examined as a witness before the Adjudicating Authority, no reliance can be placed on any statement recorded under section 14 of the Central Excise Act. Any statement recorded under Section 14 of the Central Excise Act could be admitted in evidence only after the process of examin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (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." 5. A plain reading of sub-section (1) of Section 9D of the Act makes it clear that clauses (a) and (b) of the said sub-section set out the circumstances in which a statement, made and signed by a person before the Central Excise Officer of a gazetted rank, during the course of inquiry or proceeding under the Act, shall be relevant, for the purpose of proving the truth of the facts cont....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (ii) when the person who made the statement cannot be found, (iii) when the person who made the statement is incapable of giving evidence, (iv) when the person who made the statement is kept out of the way by the adverse party, and (v) when the presence of the person who made the statement cannot be obtained without unreasonable delay or expense. 12. Once discretion, to be judicially exercised is, thus conferred, by Section 9D, on the adjudicating authority, it is self-evident inference that the decision flowing from the exercise of such discretion, i.e., the order which would be passed, by the adjudicating authority under Section 9D, if he chooses to invoke clause (a) of sub-section (1) thereof, would be pregnable to challenge. While the judgment of the Delhi High Court in J&K Cigarettes Ltd. (supra) holds that the said challenge could be ventilated in appeal, the petitioner has also invited attention to an unreported short order of the Supreme Court in UOI and Another v. GTC India and Others in SLP (C) No. 21831/1994, dated 3-1-1995 [since reported in 1995 (75) E.L.T. A177 (S.C.)], wherein it was held that the order passed by the adjudica....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 said statement as relevant, for proving the truth of the contents thereof, he has to first admit the statement in evidence in accordance with clause (b) of Section 9D(1). For this, he has to summon the person who had made the statement, examine him as witness before him in the adjudication proceeding, and arrive at an opinion that, having regard to the circumstances of the case, the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o. 2 to rely on the said statements, without following the mandatory procedure contemplated by clause (b) of the said subsection. The Orders-in-Original, dated 4-42016, having been passed in blatant violation of the mandatory procedure prescribed by Section 9D of the Act, it has to be held that said Orders-in-Original stand vitiated thereby. 23. The said Order-in-Original, dated 4-42016, passed by Respondent No. 2 is, therefore, clearly liable to be set aside. 24. In view of the above facts and circumstances, the impugned Order-in-Original dated 4-4-2016 passed by respondent No. 2 stands set aside. Resultantly, the show cause notice issued to the petitioner is remanded to respondent No. 2 for adjudication de novo by following the procedure contemplated by Section 9D of the Act and the law laid down by various judicial Authorities in this regard including the principles of natural justice in the following manner :- (i) In the event that the Revenue intends to rely on any of the statements, recorded under Section 14 of the Act and referred to in the show cause notices issued to Ambika and Jay Ambey, it would be incumbent on the Revenue to apply to Responden....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... placed on the computer printouts and other evidences. The law laid down in the Delhi High Court, in the case of C.C.E Vs. Vishnu and Co. Ltd reported in 2016 (332) ELT 793 (Del), is reproduced below: 41. What the above submission overlooks is the 'reliability' of such statements. Once it is shown that the maker of such statement has in fact resiled from it, even if it is after a period of time, then it is no longer safe to rely upon it as a substantive piece of evidence. The question is not so much as to admissibility of such statement as much as it is about its 'reliability'. It is the latter requirement that warrants a judicial authority to seek, as a rule of prudence, some corroboration of such retracted statement by some other reliable independent material. This is the approach adopted by the CESTAT and the Court finds it to be in consonance with the settled legal position in this regard. 42. The contention that it is the responsibility of the noticees to produce the witnesses for cross-examination is a strange one considering that they are witnesses of the Department and that their statements are being relied upon by the Department in support of the SCNs. Si....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y and not the Tribunal as such because the Tribunal has only exercised appellate jurisdiction. This is quite obvious from orders passed by the Tribunal, the appellate authority and pleadings/ground in the appeal. There is no dispute that the adjudicating authority did not record the statement of the Director Mr. Narayan Prasad Tekriwal and the basis of the finding recorded by the adjudicating authority as well as Customs, Excise and Service Tax Appellate Tribunal, has been the statement of the Director as recorded by the investigation officer during investigation. Section 9D of the Central Excise Act of 1944 reads as under : Section 9D - Relevancy of statements under certain circumstances. A statement made and - (1) 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, - When the person who made the statement is (a) dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by amount of delay or expense which, under the c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cumstances of the case, the statement should be admitted in the evidence, in the interest of justice. 9.4 The legislative scheme, therefore, is to ensure that the statement of any person which has been recorded during search and seizure operations would become relevant only when such person is examined by the adjudicating authority followed by the opinion of the adjudicating authority then the statement should be admitted. The said provision in the statute book seems to have been made to serve the statutory purpose of ensuring that the assessee are not subjected to demand, penalty interest on the basis of certain admissions recorded during investigation which may have been obtained under the police power of the Investigating authorities by coercion or undue influence. 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, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stablished from the record that the aforesaid statements were given by the concerned persons out of their own volition and there is no allegation of 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 lakhs 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 statements recorded without following the procedure as set out in Section 9D of the Central Excise Act, 1944 has no evidentiary value :- 13.14. From the above discussion and the decisions cited above, we obs....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on Shri. Krishna Chandra Padhi. 13.3 The Appellant has pointed out some glaring errors in the drawal of panchanama, seisure documents and the statements recorded during the course of investigation: (i) According to Shri. G.D. Agarwal, the search was conducted on 22-8-06. The list of documents shown to him on the date of search at Rameshwar Patna office was not the same as the list attached with the seizure memo. (ii) Shri. G.D. Agarwal vide his statement dated 712-07 retracted his averments made in his statement dated 22-8-06. (iii) Shri. Manoj Kumar Sahoo has stated that on 228-06, documents seized under Sl. No. 1 to 12 containing weighment slips were shown to him. But, under seizure memo the document attached was a 'Register'. The Appellant submits that the documents shown to Shri. Sahoo was not the same as the one attached with the seizure memo. (iv) Regarding the documents recovered at Rameshwar Patna Office, Shri. Sahoo stated that they have been brought from the Appellant Company (Prink Steels), by Chittaranjan Bhukta. The documents were said to have been written by Shri. Chttaranjan Bhukta. This statement of Shri. Sahoo w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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." 5. A plain reading of sub-section (1) of Section 9D of the Act makes it clear that clauses (a) and (b) of the said sub-section set out the circumstances in which a statement, made and signed by a person before the Central Excise Officer of a gazetted rank, during the course of inquiry or proceeding under the Ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rcumstances : (i) when the person who made the statement is dead, (ii) when the person who made the statement cannot be found, (iii) when the person who made the statement is incapable of giving evidence, (iv) when the person who made the statement is kept out of the way by the adverse party, and (v) when the presence of the person who made the statement cannot be obtained without unreasonable delay or expense. 12. Once discretion, to be judicially exercised is, thus conferred, by Section 9D, on the adjudicating authority, it is self-evident inference that the decision flowing from the exercise of such discretion, i.e., the order which would be passed, by the adjudicating authority under section 9D, if he chooses to invoke clause (a) of sub-section (1) thereof, would be pregnable to challenge. While the judgment of the Delhi High Court in J. & K. Cigarettes Ltd. (supra) holds that the said challenge could be ventilated in appeal, the petitioner has also invited attention to an unreported short order of the Supreme Court in UOI and Another v. GTC India and Others in SLP (C) No. 21831/1994, dated 3-1-1995 [since reported in 1995 (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ould 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 said statement as relevant, for proving the truth of the contents thereof, he has to first admit the statement in evidence in accordance with clause (b) of Section 9D(1). For this, he has to summon the person who had made the statement, examine him as witness before him in the adjudication proceeding, a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....emplated by the said clause. That being so, it was not open to Respondent No. 2 to rely on the said statements, without following the mandatory procedure contemplated by clause (b) of the said subsection. The Orders-in-Original, dated 4-42016, having been passed in blatant violation of the mandatory procedure prescribed by Section 9D of the Act, it has to be held that said Orders-in-Original stand vitiated thereby. 23. The said Order-in-Original, dated 4-42016, passed by Respondent No. 2 is, therefore, clearly liable to be set aside. 24. In view of the above facts and circumstances, the impugned Order-in-Original dated 4-4-2016 passed by respondent No. 2 stands set aside. Resultantly, the show cause notice issued to the petitioner is remanded to respondent No. 2 for adjudication de novo by following the procedure contemplated by Section 9D of the Act and the law laid down by various judicial Authorities in this regard including the principles of natural justice in the following manner :- (i) In the event that the Revenue intends to rely on any of the statements, recorded under section 14 of the Act and referred to in the show cause notices issued to Ambik....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rovisions of Section 9D. Thus, we find that Procedure set out in Section 9D has not been followed in this case. Accordingly, we answer to the question (iii) at Para 11 supra in the negative." 19.2. Further, in the case of Commissioner of Central Excise, Delhi-I v. M/s. Kuber Tobacco India Ltd. [2016 (338) E.L.T. 113 (Tri. - Del.)], the Tribunal at Delhi has dealt with the said issue and observed as under:- "7. We have gone through the facts of the case wherein the certain machines were installed at Sandeep Poultry Farm Khasra No. 63/3, Village Khera Khurd, New Delhi-110082 found wherein 'Kanchan/Kanchann' brand gutka and 'wiz' brand pan masala manufactured clandestinely without declaring the said premises as registered premises for manufacture of the said gutka. The contention of M/s. Kuber is that they were not involved in the activity of manufacture of gutkhas and the said activity was illicit and misused of their brand name and goodwill of the appellant by certain elements who were 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 stat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e and signed by a person before the Central Excise Officer shall be relevant, for the purpose of proving the truth of the facts contained therein. If the circumstances are absent, therefore, the statement, which has been made during the course of inquiry/investigation, before a gazetted Central Excise Officer, cannot be treated as relevant for the purpose of proving the fact contained therein as observed by Hon'ble Delhi High Court in the case of J.K. Cigarettes (supra) wherein Hon'ble High Court has observed as under :- 12. Bare reading of the above section manifests that under certain circumstances, as stipulated therein, statement made and signed by those persons before any Central Excise Officer of a gazetted rank during the course of inquiry or proceedings under this Act can be treated as relevant and taken into consideration if under the given circumstances such a person cannot be produced for cross-examination. Thus, this provision makes such statements relevant for the purposes of 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 subsection (1) to any pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ey should conduct their case before the Court or also what quality of evidence they should place before the Court. But the duty of the court is only to appreciate the case in the proper perspective and on the basis of what is placed before the Court. Even with regard to the prayer for permitting the applicant to cross-examine the plaintiff, the prayer is misconceived as the question of cross-examination arises only when a witness has tendered evidence in chief-examination. Under section 138 of the Indian Evidence Act, cross-examination follows chief-examination, but not without chief-examination. If there is no chief-examination, there is no cross-examination. It is only witness who is examined in chief who can be cross-examined. Therefore, a prayer for cross-examination of the plaintiff even when the plaintiff has not been examined in chief is ridiculous and not provided for under Section 138 of the Indian Evidence Act. The Trial Court has rightly rejected the application. No scope for interference 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. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o 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 cross-examination; and if new matter is, by permission of the Court, introduced in re-examination, the adverse party may further cross-examine upon that matter." 10. We therefore find force in the submission of the ld. counsel for the appellant. We find no reason to justify rejection of request made by the appellant to the adjudicating authority in light of Section 138B of the Act, to summon witnesses for examination and to offer them for cross-examination if their statements were to be considered as relevant and admitted in evidence in the interest of justice. 12. We further find in the case of Bussa Overseas Properties Ltd., this Tribunal 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e form of statements gathered have no link of the appellant to the activities took at Sandeep Poultry Farm which is required to be examined on the basis of records available during the course of adjudication and the same has not been considered judicially." [Emphasis supplied] 19.3. In terms of Section 9D of the Central Excise Act, for relying upon the statements recorded during the course of investigation, the adjudicating authority was required to examine the witnesses, in chief, and also to form the opinion that, having regard to the facts and circumstances of the case, the statements of the witnesses should be admissible as evidence. Thereafter, the witnesses were required to be offered for cross-examination. In the absence of examination in-chief, cross-examination cannot be provided and the same would be a futile exercise. 19.4. From the above, it is clear that for placing reliance on the statements to allege clandestine removal of goods against the appellant, the said statements, recorded during the course of investigation, were to be tested as per the provisions laid down under Section 9D of the Central Excise Act, 1944, which the Revenue has failed to do in the in....