TaxTMI 
TaxTMI 
2026 (6) TMI 1294
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....Act, 1944 along with applicable interest under Section 11AA and equal penalty under Section 11AC of the said Act. 1.1. The present appeal pertains to the aforesaid demand of duty, interest and penalty fastened upon the appellant-company vide the impugned order. 2. Briefly stated, the facts of the case are that the appellant is engaged in the manufacture of M.S. Billets falling under Chapter 72 of the First Schedule to the Central Excise Tariff Act, 1985 and is duly registered with the Central Excise Department. The appellant is duly registered under the Central Excise Act, 1944 bearing Registration No. AAICS9875NXM001. The appellant has been a regular assessee, maintaining statutory records including the Daily Stock Account, issuing Central Excise Invoices in the prescribed manner and filing periodic returns. 2.1 Intelligence was developed by the officers of the Directorate General of Central Excise Intelligence (DGCEI), Kolkata Zonal Unit, alleging that the appellant had indulged in clandestine manufacture and clearance of M.S. Billets without payment of Central Excise duty. In furtherance thereof, simultaneous search operations were conducted at various premises connecte....
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....nfirming the impugned demands. Against the said order, the appellant filed a Writ Petition before the Hon'ble High Court at Calcutta being W.P. 10188(W) of 2019. 2.7. On the ground that the relied upon and nonrelied upon documents were not handed over to the appellant before the first adjudication, the matter was remanded to the adjudicating authority by the Hon'ble Calcutta High Court for fresh adjudication de novo. 3. Upon de novo adjudication, the appellant contested the allegations in toto and filed detailed replies to the Show Cause Notice. It was, inter alia, contended that the entire case of the Department was founded upon assumptions and presumptions and rested principally upon statements recorded during investigation and certain private documents and notebooks, whose evidentiary value was seriously disputed and not free from doubt. The appellant further submitted a detailed reconciliation statement wherein each entry in Seized Document No. 01 was co-related with the corresponding Central Excise Invoice. 3.1. The matter was adjudicated vide the impugned order dated 07.02.2020 wherein the Ld. Commissioner of Central Goods and Service Tax, Bolpur, rejected the conten....
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.... (i) the person who made the statement must first be examined as a witness before the adjudicating authority (examination in-chief); and (ii) the adjudicating authority must thereafter form an opinion that, having regard to the circumstances, the statement should be admitted in the interests of justice. (iii) The word 'shall' in Section 9D(1) makes this procedure mandatory, not directory. The legislative rationale is cogent: statements recorded during investigation by revenue officers can be the product of coercion, compulsion or inducement. Examination before the adjudicating authority, followed by cross-examination by the noticee, provides the only reliable safeguard against reliance on tainted, involuntary or false statements. (iv) The impugned order relies heavily upon the following statements all recorded under Section 14 of the Act during investigation: * Statement of Shri Anil Kumar Agarwal, Director of SEPL, dated 24.04.2015; * Statement of Shri Sunil Agarwal, Director of SEPL, dated 29.05.2017 and 23.05.2017; * Statement of Smt. Shikha Agarwal, wife of Shri Sunil Agarwal, dated 31.08.2017; * Statement of Shri J....
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....icating Authority rejected this reconciliation without recording any reason a serious infirmity going to the root of the order. c. Silence or inability to comment during an investigation particularly when the full set of invoices is not shown to the deponent cannot be equated with an admission. Silence does not amount to confessional evidence of duty evasion. d. In any event, even if the statements were to be considered, they required compliance with Section 9D before they could be used as evidence. As demonstrated above, this compliance was not undertaken. (x) The settled legal position, repeatedly affirmed by the High Courts and this Tribunal, is that non-compliance with Section 9D renders the statements completely devoid of evidentiary value for proving the truth of their contents. The Adjudicating Authority's reliance on these statements amounts to reliance on irrelevant material, vitiating the order in its entirety. Reference in this regard is invited to the following decisions: * G-Tech Industries v. Union of India, 2016 (339) ELT 209 (P&H) * M/s. Amiya Steel Pvt. Ltd. vs. Commissioner of CGST & Central Excise, Bolpur [Final Order ....
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..../KOL/14 - brokerage sheets found at the Director's residence; * Karmakar Notebooks (02/SBIWRes/Joydeb/14) - notebooks allegedly maintained by Shri Karmakar recording loading/unloading at SBIW; * Various comparison charts prepared by the DGCEI by cross-referencing entries in these documents. (iv) The Revenue has failed entirely to establish the mandatory conditions under Section 36B(2). No certificate under Section 36B(4) has been obtained from any person occupying a responsible official position in relation to any computer or device that allegedly generated these records. There is no proof that the entries were produced by a computer that was used regularly for the relevant business activity in the ordinary course, or that the information was regularly fed into it, or that the computer was functioning properly, or that the output faithfully reproduces the input. In the complete absence of these mandatory safeguards, the documents are inadmissible as evidence. Reference in this regard is invited to the following decisions: * M/s. Amiya Steel Pvt. Ltd. vs. Commissioner of CGST & Central Excise, Bolpur [Final Order No.77751-77753/2025 (Tri. - Kol.)]....
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....patory evidence is a serious infirmity and vitiates the Impugned Order. (iii) The investigating authority compared certain entries in Seized Document No. 01 with only the Central Excise Invoices issued to SBIW. The entries in Seized Document No. 01 against dates and weights that did not match SBIW invoices were automatically treated as clandestine removals. However: - * Many of those 'unmatched' entries correspond to sales made by SEPL to other parties (Surya Alloys, Adhunik, etc.) covered by valid excise invoices, a fact the Appellant clearly demonstrated through its reconciliation statement. * The investigating authority never compared the entries in Seized Document No. 01 against the full universe of Central Excise Invoices issued by SEPL to all its customers. * This selective and truncated comparison makes the department's analysis fundamentally unreliable and unsupported. * As a result of this flawed comparison, some excise-paid sales made to parties other than SBIW have been treated as clandestine removals and duty has effectively been demanded twice on the same transactions. This also constitutes a case of double taxation in respe....
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....ess quantities of raw materials (primarily sponge iron, scrap, iron ore, etc.). The investigating authority has not found a single document, invoice, voucher or entry indicating that the Appellant procured any raw material in excess of what is recorded in its books. Without excess raw material input, excess production and clandestine removal is physically and commercially impossible. - No Physical Stock Shortage at the Factory - The basic tool for detecting unaccounted production is a physical stock verification at the manufacturer's factory. If the Appellant had been running its plant at higher capacity and producing goods beyond what it declared, the closing stock of finished goods would be short. No stock taking exercise was conducted at the Appellant's factory. There is no finding of any shortage in stocks of raw material or finished goods. - No Investigation of Electricity Consumption Data - While the Show Cause Notice alleged a disparity in electricity consumption as supporting evidence of excess production, (a) the electricity consumption data was used as the primary premise rather than a corroborative fact, (b) no independent expert inves....
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....laji Industries Limited (Unit-III) vs. Commissioner of CGST & CX, Bolpur Commissionerate [Final Order No. 75583-75585/2020 (Tri. - Kol.)] * M/s. Ramgarh Sponge Iron Private Limited & Oth. vs. Principal Commissioner, C.G.S.T. & C.X., Ranchi. [2024 (9) TMI 1844 - (Tri. - Kol.)] * M/s. MSP Sponge Iron Limited vs. Commissioner of CGST, C. EX & Customs, Rourkela Commissionerate [2020 (3) TMI 15 - (Tri. - Kol.)] * M/s. Ambica Organics vs. Commissioner of C.EX. & Cus., Surat-I [2016 (334) E.L.T. 97 (Tri - Ahmd.)] * M/s. Hi-Tech Abrasives v. Commissioner of C. Excise & Customs, Raipur [2018 (362) ELT 961 (Chhattisgarh)] * M/s. Continental Cement Company v. Union of India [2014 (309) ELT 411 (All.)] * M/s. BST Infratech Limited & Anr. vs. Commissioner of CGST & Excise, Bolpur Commissionerate [2020 (12) TMI 31 - (Tri. - Kol.)] V. STATEMENT OF SHRI JOYDEB KARMAKAR CANNOT BE CONSIDERED AS ADMISSIBLE EVIDENCE TO ALLEGE CLANDESTINE REMOVAL OF GOODS (i) It is submitted that the proceedings against the Appellant are founded upon the statement of Shri Joydeb Karmakar. The very same statement, along with the allegations emanatin....
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....ized Document No. 01 in fact correspond to excise-paid sales. If there was no clandestine removal, the question of intentional suppression does not arise. (vi) It is submitted that even if the evidence were to be taken at face value (which is denied), the evidence is entirely consistent with inadvertent error or dispute about coverage rather than deliberate, intentional suppression. The benefit of doubt on this count must go to the assessee. (vii) Since the primary demand is not legally sustainable for the reasons set out above, the extended period is not independently applicable. However, even on standalone consideration, the conditions for invoking the extended period are not fulfilled. 4.1. In view of the above submissions, the Ld. Counsel appearing on behalf of the appellant have prayed for setting aside the demand of central excise duty confirmed against them vide the impugned order, along with interest. Accordingly, they also prayed for immunity from imposition of penalty under Section 11AC of the Central Excise Act, 1944. 5. On the other hand, the Ld. Authorized Representative of the Revenue appearing before us reiterated the findings in the impugned ....
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.... rests upon various statements recorded during the course of investigation under Section 14 of the Central Excise Act, 1944, as observed hereinabove. However, the admissibility of such statements in adjudication proceedings is not left to discretion, but is expressly regulated by Section 9D of the Act, which embodies a statutory safeguard intended to ensure fairness and reliability in the appreciation of evidence. 8.2. Section 9D, by virtue of sub-section (2) thereof, applies with equal force to adjudication proceedings. The scheme of the provision leaves no room for ambiguity. Under clause (a) of sub-section (1), statements recorded before a Gazetted Central Excise Officer may be admitted straightaway only in exceptional circumstances, namely where the maker of the statement is dead, cannot be found, is incapable of giving evidence, has been kept away by the adverse party or cannot be produced without unreasonable delay or expense. In such eventuality, the adjudicating authority is required to record a reasoned satisfaction regarding the existence of any of the aforesaid contingencies. 8.3. In all other cases falling under Section 9D(1)(b), the statute mandates a two-stage p....
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.... to be used as substantive evidence against the assessee, amounts to denial of a valuable right and constitutes a serious infraction of the principles of natural justice. 8.7. We also find considerable force in the contention of the appellant that the statements of the Directors have been misconstrued by the adjudicating authority. A careful reading of the statement dated 24.04.2015 of Shri Anil Kumar Agarwal reveals that while confronting him with the entries appearing in Seized Document No. 01, only certain invoices pertaining to M/s. SBIW were shown to him. Admittedly, the invoices relating to other buyers, including M/s. Surya Alloys, M/s. Adhunik Industries and several other customers, were never put to him. In such circumstances, his inability to immediately identify particular invoice numbers or his response that he was unable to comment thereon could not, by any stretch of imagination, be construed as an admission of clandestine manufacture and removal. 8.8. The appellant has also specifically contended that the Director's silence in the said statements as "I cannot comment" cannot be considered as an admission of guilt on the part of the appellant. It is trite law th....
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....ment, 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 statement should be admitted in the interests of justice. 17. In fact, Section 138 of....
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....y clause (b) of the said sub-section. The Orders-in-Original, dated 4-4-2016, 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." 8.11. The above view has also been expressed by the Tribunal at Chennai in the case of M/s. Geetham Steels Pvt. Ltd. v. Commissioner of G.S.T. and Central Excise, Salem [2025 (3) TMI 1098 - CESTAT, Chennai], wherein it has been held as follows: - "57. If we notice the provisions of Section 9D, what flows from it is that 9D(1) stipulates when a statement given under section 14 would be relevant for the purpose of proving, "in any prosecution for an offence", the truth of the facts which it contains and provides for various scenarios in the sub-sections thereto at (a) and (b). It is only when the Department first adduces evidence in the proceedings before the adjudicating authority, of the existence of the aforementioned scenarios in section 9D(1)(a) that the deponent's statement is taken as a substantive piece of evidence, without the deponent deposing thereto before the adjudicating authority. That would still not ob....
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....cumstances of the case. In other words, it is only after such examination in chief, that the adjudicating authority can arrive at a considered decision, whether to declare the witness appearing before it as a hostile witness and then to decide in the facts and circumstances whether to rely on the earlier statement; or if upon finding major inconsistencies between his earlier deposition and in the contradictions brought about in cross-examination, to not rely on the earlier statement; or if it is only minor discrepancies as that which does not majorly disturb the essential truth of his deposition, to rely upon it, if in the circumstances of the case, the adjudicating deems it fit in the interest of justice. 60. Therefore, we are of the view that Section 9D(2) not only legislatively mandates the adjudicating authority to apply the provisions of S.9D (1), depending on the facts and circumstances of the case, to the extent possible. but also when read along with Section 9D(1)(b), leads to the inexorable conclusion that the adjudicating authority necessarily has to conduct an examination in chief of the deponent of the statement so as to determine not only the voluntary nature ....
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....fficials to the factory premises of SRPML. Before that, he had already recorded four statements in which there was no mention of any clandestine purchase on cash basis by SRPML. Further, we find that when the reliance is placed on the five recorded statements of Debashsis Shasmal, it was necessary for the Revenue to follow the Section 9(D) procedure to ascertain as to whether the statements were recorded by him on his own or were they recorded under any pressure or coercion. Only after this, the Statements could have been relied upon as an evidence which the Department has failed to do in this case." [Emphasis supplied] 8.13. Similar principles have also been reiterated by the Hon'ble Chhattisgarh High Court in the case of M/s. Hi Tech Abrasives Ltd. v. Commissioner of Central Excise & Customs, Raipur [2018 (362) E.L.T. 961 (Chhattisgarh)]. Statements of Shri Sunil Agarwal: 8.14. Specifically, with regard to the statements of Shri Sunil Agarwal, Director of the appellant-company, from the records, it transpires that certain private papers had been recovered from the residential premises of the Agarwal family during the course of search and seizure proceedings and th....
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....ey, a transporter in this case. A careful reading of the said statement reveals that the witness merely acknowledged having provided transportation services to the appellant. Such fact, by itself, is wholly unexceptionable and undisputed, the appellant admittedly being engaged in the manufacture and clearance of finished goods to various customers through different vehicles. Significantly, the investigating officers had confronted the transporter with a list of dates, vehicle numbers and quantities and sought his confirmation thereof. Such a mode of questioning, being inherently suggestive and leading in nature, cannot be regarded as constituting independent evidence of clandestine removals. 8.16.1. Further, we find substance in the contention of the appellant that the transporter was never questioned as to whether the consignments allegedly transported by him pertained exclusively to M/s. SBIW or whether he had transported goods for several other customers of the appellant as part of its regular business operations. Therefore, the mere confirmation of transportation services does not inexorably lead to the conclusion that any particular consignment was cleared without payment o....
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....grafts certain mandatory safeguards to ensure the authenticity and reliability of electronic evidence. The conditions stipulated under Section 36B (2) are cumulative in nature and are required to be strictly fulfilled before any computer-derived evidence can be admitted and acted upon. 10.2. We find that Section 36B (4) further mandates issuance of a certificate identifying the electronic record, describing the manner in which it was produced and certifying compliance with the requirements prescribed under sub-section (2). Such certificate is required to emanate from a person occupying a responsible official position in relation to the operation of the computer or the management of the relevant activities. Compliance with these safeguards is not an empty formality but constitutes the very foundation upon which the admissibility of such evidence rests. 10.3. Upon a careful examination of the records, we find that no such certificate contemplated under Section 36B (4) has been brought on record by the Revenue. There is nothing to demonstrate that the computers or devices from which the impugned records are alleged to have been generated were regularly used in the ordinary cours....
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....ve. In the present case, we observe that neither the mandatory conditions of Section 36B(2) have been complied with nor there is any certificate on record as mandated under Section 36B(4). Thus, we hold that the print-outs taken from the computers, pen drives and laptop cannot be relied upon to demand duty in this case, as the provisions of Section 36B(2) and 36B(4) are not satisfied. 7.1.6. In support of their contention that the computer printouts resumed from the computers, pen drives and laptop in this case are not admissible evidences, unless the mandatory procedure prescribed in Section 36B is followed, the appellants cited various decisions. We observe that in the case of Ambica Organics vs. Commissioner of C.Ex. & Cus., Surat-I reported in 2016 (334) E.L.T. 97 (Tri.- Ahmd)., it has been held as under: "7. After hearing both the sides and on perusal of the records, I find that the Central Excise officers while visiting the factory of the appellant, recovered a USB drive in the appellant's premises. The USB drive was connected with computer and a printout was taken by the computer expert accompanied with the Central Excise officers. The printout gives the de....
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....his fact gives credence to the allegations made by the appellant that the statements were not voluntary. It is apparent that the thirty statements have been recorded under a promise that no action shall be taken against them. Under these facts and circumstances, the evidentiary value of these thirty statements is considerably weakened. However, the solid evidence in the form of electronic records (USB Drive) and the computer printout from the same are sufficient to nail the appellant." 9. The Commissioner (Appeals) observed that the evidence in the form of electronic record (USB drive) the computer printout are strong evidence to establish the clandestine removal of the goods. It is seen that the said printout of the data in the USB drive contained the details of raw material and finished goods along with the names and addresses of the suppliers and the purchasers of the finished goods. It is seen that the statements were recorded to corroborate the contents of the printout and the Commissioner (Appeals) had held that the said statements has no strong evidentiary value. Shri Anil Gupta, Partner of the appellant firm had stated that he was not aware of the details contained....
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....and for the purpose of the sub-section, which shall be sufficient for a matter to be stated to the best of the knowledge and the belief of the persons stating it. In the present case, the data was not stored in the computer. It is stated that the computer expert accompanied with the Central Excise officers had taken the printout from the USB drive by connecting to the computer. The officers had not obtained any certificate as required under Section 36B 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 clandestine removal of the goods. 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. In the case of M/s. Premier Instrument & Controls Ltd. (supra), the Tribunal has held that the printout of the personal computer of the company's officer, had not fulfilled the statutory condition laid down under Section 36B(2) of the Act and the demand is not sustainable. The relevant portion of the said decision is reproduced below : - "9. O....
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....perating properly or was out of operation during that part of that period was not such as to affect the production of the document or the accuracy of the contents; and (d) the information contained in the statement reproduced or is derived from information supplied to the computer in the ordinary course of the said activities." Ld. Sr. Counsel has argued that the above conditions were not fulfilled in respect of the computer printout taken from the personal computer of Shri Sampath Kumar. It appears from the statement of Shri Sampath Kumar and the averments in the memorandum of appeal that it is an admitted fact that Shri Sampath Kumar was the person having lawful control over the use of the computer. The computer was not shown to have been used regularly to store or process information for the purposes of any activities regularly carried on by the company. It was also not shown that information of the kind contained in the computer printout was regularly supplied by the Company to the personal computer of Shri Sampath Kumar in the ordinary course of activities. Again, it was not shown that, during the relevant period, the computer was operating in the above manne....
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....o, the imposition of penalties are not warranted" 7.1.7. In the case of Anvar P.V. Vs. P.K. Basheer reported in 2017 (352) E.L.T. 416 (S.C.), the Hon'ble Supreme Court has held as under: . . . 7.1.8. Section 65B of the Evidence Act is pari materia with Section 36B of the Central Excise Act, 1944. From the above observation of the Hon'ble Apex Court and the decision in the case of Ambica Organics referred above, we find that unless the conditions of Section 65B(2) of the Evidence Act, which is pari materia with Section 36B(4) of the Central Excise Act, are complied with, no reliance can be placed on any data recovered from computer printouts. Admittedly, the procedure set out in Section 36B has not been followed in this case. Thus, by following the judgement of the Hon'ble Apex Court and the other decisions cited above, we hold that the data resumed from the computer print-outs alone cannot be relied upon to demand duty, without any corroborating evidence." 10.6. A similar matter also came up for consideration before the Tribunal in the case of M/s. Jai Balaji Industries Ltd. v. Commissioner of CGST & CX, Bolpur Commissionerate [Fi....
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....val. 10.9. We also find considerable force in the contention advanced on behalf of the appellant that during adjudication, a detailed reconciliation statement was furnished correlating the entries appearing in Seized Document No. 01 with corresponding Central Excise invoices issued to various customers including M/s SBIW Steels Pvt. Ltd., M/s Surya Alloys Industries Ltd., M/s Adhunik Industries Ltd. and several other buyers. According to the appellant, the entries contained in the seized document represented the broker's working sheets reflecting sales effected to different parties and not unaccounted transactions. 10.10. Furthermore, the notebooks allegedly maintained by Shri Joydeb Karmakar merely contain dates, vehicle numbers, quantities and, in certain places, the number of pieces. They neither describe the goods nor mention the names of the consignors or consignees. There is no indication therein that the entries pertain to goods supplied by the appellant-company. Such rough and anonymous notings recovered from the residence of a third party, without independent corroboration, cannot constitute reliable evidence of clandestine manufacture and clearance. 10.11. It....
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..... 11. In view of the foregoing discussion, we are unable to persuade ourselves to concur with the findings recorded in the impugned order insofar as the admissibility and evidentiary value of the seized documents and comparison charts are concerned. We hold that the mandatory requirements of Section 36B of the Central Excise Act, 1944 having not been complied with, the said documents and computer-derived materials cannot be treated as admissible evidence for sustaining the charge of clandestine manufacture and removal against the appellant. Issue (III): Whether the documents and evidences available on record conclusively establish that the Appellant had indulged in clandestine manufacture and removal of excisable goods, as alleged, or not? 12. We further find that the allegation of clandestine manufacture and removal, being a serious charge carrying civil as well as penal consequences, cannot be sustained on the basis of assumptions and presumptions. It is now well settled through a catena of decisions that such a charge must be established by the Revenue through tangible and independent corroborative evidence. The various parameters and tests which are ordinarily required....
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....ined or on mere statements of some persons, may even be responsible officials of the manufacturer or even of its Directors/partners who are not even permitted to be cross-examined, as in the present case, without one or more of the evidences referred to above being present. In fact, this Bench has considered some of the case-law on the subject in Centurian Laboratories v. CCE, Vadodara [2013 (293) E.L.T. 689]. It would appear that the decision, though rendered on 3-5-2013, was reported in the issue of the 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. is....
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....w materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. On careful examination, it is found that with regard to alleged removals, the department has not investigated the following aspects : (i) To find out the excess production details. (ii) To find out whether the excess raw materials have been purchased. (iii) To find out the dispatch particulars from the regular transporters. (iv) To find out the realization of sale proceeds. (v) To find out finished product receipt details from regular dealers/buyers. (vi) To find out the excess power consumptions. 13. Thus, to prove the allegation of clandestine sale, further corroborative evidence is also required. For this purpose no investigation was conducted by the Department. 14. In the instant case, no investigation was made by the Department, even the consumption of ....
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....goods outside the factory (d) Instances of sales 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 for in excess of what is necessary for manufacture of goods otherwise manufactured and validity 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 document recovered during the search and activities being carried on in the factory of production; etc." 12.3. Examining the facts of the present case in the light of the aforesaid principles, we find that except for placing reliance upon certain seized documents and statements, which have already been held to be inadmissible, the Revenue has failed to establish several essential circumstances ordinarily expected in cases of clandestine manufacture and removal. There is no evidence regarding procurement of excess raw materials, no stock verification revealing shortage of raw materials or finished go....
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...., Kolkata]. It is seen that the Tribunal, while considering the evidentiary value of the statements and records maintained by Shri Joydeb Karmakar, held that the statements could not be treated as reliable evidence in the absence of compliance with Section 9D of the Central Excise Act, 1944. It is further observed that the Tribunal, in the aforesaid decision, also noticed that no meaningful effort had been made by the Revenue to verify the veracity of the records maintained by Shri Joydeb Karmakar, despite the same being crucial to the allegation of clandestine manufacture and removal. In the absence of any documentary evidence supporting the statements of Shri Karmakar, the Revenue's case against SBIW was held to be unsustainable. Since the very same statements and records of Shri Joydeb Karmakar have also been relied upon in the present proceedings, the observations made by the Tribunal in the case of SBIW Steels Pvt. Ltd. lend further support to the conclusion already arrived at by us regarding their lack of evidentiary value. 14.1. We further note that out of the alleged purchasers, investigation appears to have been confined substantially to M/s. SBIW Steels Pvt. Ltd. a....