TaxTMI 
TaxTMI 
2026 (9) TMI 1211
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....93/- (inclusive of cesses) for the period from 01.11.2014 to 07.09.2016 has been confirmed against appellant no. 1, along with interest and penalty of an equivalent amount has been imposed under Section 11AC of the Central Excise Act, 1944; a personal penalty of Rs.50,00,000/- was imposed upon appellant no. 2 under Rule 26 of the Central Excise Rules, 2002 read with Section 174 of the CGST Act, 2017. 2. The facts of the case are that the appellant company is engaged in the manufacture and clearance of Sponge Iron and Charcoal falling under Chapters 72 and 27 of the Central Excise Tariff Act, 1985. They were holding Central Excise Registration bearing ECC No. AABCJ4338CXM001. 3. The proceedings originated from intelligence gathered by the Preventive Branch of the office of the Commissioner, C.G.S.T. & Central Excise, Jamshedpur, pursuant to which a search was conducted at the premises stated to be the secret office of M/s. Maa Tara Ferrotech Ltd. During the course of such proceedings, certain documents/records were recovered, which were considered by the Department to contain references to procurement of Sponge Iron from the appellant-company. Accordingly, on 16.09.2016, the o....
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....e seized records and electronic devices were thereafter subjected to examination by the investigating officers. In particular, data was retrieved from the seized CPUs and printouts were taken therefrom, which, according to the Department, contained details relevant to procurement, manufacture and dispatch of goods. The Department subsequently relied upon such retrieved data, along with the documentary records recovered during the searches, to allege that the appellants had engaged in clandestine clearance / removal of finished products i.e., Sponge Iron and Charcoal, without issuing central excise invoices and without payment of applicable central excise duties thereon, by way of wilful suppression of relevant facts. 5. The investigation also involved examination of the statements of persons associated with the appellant-company. Shri Swapan Sinha, Manager (Accounts) of the appellant-company, in his statement dated 16.09.2016 recorded under Section 14 of the Central Excise Act, 1944, stated, inter alia, regarding the accounting and statutory affairs of the appellant-company and also inter alia stated that the said clearances without issuance of central excise invoices were made ....
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.... produce transportation-related documents on the ground that the transactions were old and that the relevant consignment papers had remained at the destination. They also stated that transportation payments were made in cash at the time of loading/unloading. 8. The investigation also brought on record certain data/documents recovered from the alleged secret office of M/s. Maa Tara Ferrotech Ltd., which purportedly reflected procurement of Sponge Iron by M/s. Maa Tara Ferrotech Ltd. from M/s. Jai Mangla Sponge Iron Pvt. Ltd. The Department thereafter compared/tallied the said data with the records of the appellant-company and alleged that, in respect of a portion of the transactions so reflected, corresponding Central Excise invoices had not been issued by the appellant-company. The said material was relied upon by the Department as further corroboration of the alleged unaccounted clearances. 9. In view of the above material and upon scrutiny of the records/documents and the retrieved data, the Department alleged that during the relevant period the appellant-company had procured 44,954.27 MT of coal and 22,179.32 MT of iron ore which were not reflected in its statutory account....
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....ing the alleged clandestine manufacture and clearance is substantially founded upon the statements of Shri Swapan Sinha and Shri Sarabjeet Singh Sony, coupled with the dispatch reports/data purportedly retrieved from the seized computers. It is contended that, apart from the aforesaid material, the investigation does not disclose the existence of the usual and necessary corroborative evidence which could reasonably establish clandestine manufacture and clearance. In particular, there is no corresponding finding of any physical stock discrepancy; excess or abnormal consumption of electricity; statements of the alleged buyers/consignees; transport documents or statements of truck drivers establishing movement of the alleged clandestinely cleared goods; weighment slips; evidence of additional labour having been deployed for manufacture of the alleged unaccounted production; evidence regarding receipt and utilisation of the alleged sale proceeds; corresponding demand of VAT or other commercial tax; statements of the alleged suppliers of the unaccounted raw materials; or the statements of the persons who had actually made the relevant entries in the computerised records. According to th....
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....riate scrutiny and independent corroboration. (v) A principal objection of the appellants concerns the reliance placed by the Department upon the computer data retrieved from the seized computers/CPUs and the printouts taken therefrom. Learned Counsel submits that the said computer printouts do not satisfy the statutory requirements prescribed under Section 36B(2) and Section 36B(4) of the Central Excise Act, 1944, and therefore could not have been treated as admissible evidence for establishing the alleged clandestine clearances. It is specifically contended that the computer printouts relied upon by the Department were not accompanied by the requisite certificate contemplated under Section 36B(4).Section 36B(4) requires a certificate containing, inter alia, particulars regarding the manner in which the electronic record was produced and the particulars of the device involved in the production of such record; the certificate is intended to establish the manner in which the electronic record was produced and to identify the relevant computer/device from which, or through which, the record was generated. The appellants contend that the printouts relied upon in the present p....
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....t could not derive an adverse finding from such a statement without first establishing its proper evidentiary foundation. (ix) It is further submitted that some of the persons who had allegedly been operating the computers and making entries during the relevant period were ex-employees of the appellant-company and had subsequently left the service of the appellant-company. According to the appellants, the Department did not adequately investigate or examine such persons with regard to the alleged computer entries attributed to them. The appellants therefore contend that the alleged computer-generated entries could not reasonably be fastened upon the appellant-company merely on the basis of their existence in the seized electronic devices, particularly when the persons who had actually operated the computers and made the entries were not properly examined during the investigation. Such an investigation, according to the appellants, remained incomplete and could not furnish a reliable evidentiary basis for the demand. (x) It is also submitted that the investigation was materially deficient inasmuch as no effective investigation was conducted against the alleged tran....
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....en the alleged non-disclosure and a deliberate intention to evade duty. It is submitted that no such positive evidence has been brought on record in the present case. He therefore contends that the extended period could not have been invoked merely because the Department, during a later investigation, formed a view that certain clearances were not reflected in the statutory records; the alleged clandestine activity itself being founded substantially upon disputed statements and computer-generated data whose evidentiary admissibility is specifically challenged, the same material cannot simultaneously be treated as sufficient to establish the substantive demand as well as the distinct and higher requirement of fraudulent or wilful suppression with intent to evade duty for the purpose of limitation. The appellants accordingly submit that the demand, insofar as it falls beyond the normal period prescribed under Section 11A, is barred by limitation. 11.2. In view of the foregoing submissions, the Ld. Counsel for the appellants submits that the allegations of clandestine manufacture and clearance have not been established by the Department by cogent, positive and legally admissible ev....
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.... have never been tested by way of examination-in-chief and also not allowed for cross-examination. Therefore, the said statements are not reliable statements, without complying with the mandatory procedure prescribed under Section 9D of the Central Excise Act, 1944, as held by the Hon'ble Punjab and Haryana High Court in the case of M/s. Ambika International vs. Union of India [2018 (361) E.L.T. 90 (P&H)], wherein it has been held as under: - "21. 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 petitioners have 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. 2183 of 1994, dated 3-1-1995 wherein it was held that the order pas....
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....ess concerned. 25. 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 circumstance....
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.... 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 sub-section. The Orders-in-Original dated 19-52016 and 1-6-2016, 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." 16.1. Further, the said issue has also been examined by this Tribunal in the case of M/s. Jai Balaji Industries Limited & ors. v. Commissioner of C.G.S.T. and Central Excise, Bolpur [2023 (8) TMI 989 - CESTAT, Kolkata], wherein this Tribunal observed as under: - "13. The next evidence relied upon by the adjudicating authority to confirm the demands in the impugned order are the statements recorded on the date of search and subsequently during the course of investigation. The statements recorded and the contents therein are given below in brief: 13.1 A statement of Shri Sushil Kumar Roy, Associate (Commercial) of JBIL-III was recorded in which he inter alia stated that data sheet retrieved from pen drives were the details of Billets sold 'on bills' as well as 'without bills'....
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....f 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 Balaji Group he was looking after procurement of raw materials; that while directing the dispatch plan as per the direction of Shri Rajiv Jajodia, Director, he used to interact with weighbridge supervisors namely Shri Kanhaiya at Unit-III; that whether a particular consignment was to be dispatched with bill or without bill was decided by the Directors only; and that the payment for such dispatches was received in JBIL group in cheque or cash respectively. ......... 13.11. The Appellants stated that the procedure set out under Section 9D is a mandatory procedure and without following this procedure no reliance can be placed on any statement recorded under Section 14 of the Central Excise Act, 1944....
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....n 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 contained therein. 6. Section 9D of the Act came in from detailed consideration and examination, by the Delhi High Court, in J.&K. Cigarettes Ltd. v. CCE, 2009 (242) E.L.T. 189 (Del.) = 2011 (22) S.T.R. 225 (Del.). Para 12 of the said decision clearly holds that by virtue of subsection (2) of Section 9D, the provisions of sub-section (1) thereof would extend to adjudication proceedings as well. 7. There can, therefore, be no doubt about the legal position that the procedure prescribed in sub-section (1) of Section 9D is required to be scrupulously followed, as much in adjudication proceedings as in criminal proceedings relating to prosecution. 8. As already noticed herein above, subsection (1) of Section 9D sets out the circum....
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....egnable 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 adjudicating authority under Section 9D of the Act could be challenged in writ proceedings as well. Therefore, it is clear that the adjudicating authority cannot invoke Section 9D(1)(a) of the Act without passing a reasoned and speaking order in that regard, which is amenable to challenge by the assessee, if aggrieved thereby. 13. If none of the circumstances contemplated by clause (a) of Section 9D(1) exists, clause (b) of Section 9D(1) comes into operation. The said clause prescribes a specific procedure to be followed before the statement can be admitted in evidence. Under this procedure, two steps are required to be followed by the adjudicating authority, under clause (b) of Section 9D(1), viz. (i) the person who made the statement has....
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....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 the Indian Evidence Act, 1872, clearly sets out the sequence of evidence, in which evidence-in-chief has to precede cross-examination, and cross-examination has to precede re-examination. 18. It is only, therefore,- (i) after the person whose statement has already been recorded before a Gazetted Central Excise officer is examined as a witness before the adjudicating authority, and (ii) the adjudicating authority arrives at a conclusion, for reasons to be recorded in writing, that the statement deserves to be admitted in evidence, that the question of offering the witness to the assessee, for cross-examination, can arise. ....
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....rocedure 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 Respondent No. 2 to summon the makers of the said statements, so that the Revenue would examine them in chief before the adjudicating authority, i.e., before Respondent No. 2. (ii) A copy of the said record of examination-in-chief, by the Revenue, of the makers of any of the statements on which the Revenue chooses to rely, would have to be made available to the assessee, i.e., to Ambika and Jay Ambey in this case. (iii) Statements recorded during investigation, under Section 14 of the Act, whose makers are not examination-in-chief before the adjudicating authority, i.e., before Respondent No. 2, would have to be eschewed from evidence, and it would not be permissible for Respondent No. 2 to rely on the said evidence while adjudicating the m....
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....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. Since it is relying on such statements, it is the responsibility of the Department to ensure their presence for cross-examination. As already mentioned, whenever such witnesses (i.e. six of them) were produced for cross-examination they resiled from their earlier statements. 43. It is not a matter of mere coincidence that none of the witnesses who were cross-examined stood by their earlier statements. It is one thing to overlook this feature on the premise that all of them were under the pressure and control of the noticees. The other approach is to view this with some caution and ask what might be the case if the remaining witnesses were also produced for cross-examination? Importantly, what would be the prejudice caused to the noticees, in s....
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....re 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 circumstances of the case, the Court considers unreasonable; or When the person who made the statement is (b) examined as a witness in the case before the Court and the Court is of the opinion that having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. The provisions of sub-section (1) shall, so (2) 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 the Court. On scanning the anatomy of the said provision, we find that the statement made and signed by a person before any Central Excise Officer of a gazetted rank during the course of inquiry or proceeding ....
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.... 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, the statement recorded during search and seizure operation by the Investigation Officers cannot be treated to be relevant piece of evidence on which a finding could be based by the adjudicating authority. A rational, logical and fair interpretation of procedure clearly spells out that before the statement is treated relevant and admissible under the law, the person is not only required to be present in the proceedings before the adjudicating authority but the adjudicating authority is obliged under the law to examine him and form an opinion that having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. Therefore, we would say that even mere recording of statement is not enough but it has ....
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....d 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 observe that the statements recorded cannot be relied upon to demand duty, unless the procedure set out in Section 9D are followed. None of the statements recorded in this case conclusively establish any clandestine clearance. During cross examination all of them retracted their earlier statements. Hence, the evidentiary value of the statements have to be examined in the light of the decisions cited above." 16.2. Again, in the case of M/s. Prinik Steels (P) Ltd. &ors. v. Commissioner of C.Ex., Cus. &S.Tax, Bhubaneswar-I [2023 (12) TMI 299 - CESTAT, Kolkata=(2024) 15 Centax 313 (Tri. - Cal.)], under similar facts and circumstances, the Tribunal observed as follows: - "13. (iii) Whether the procedure as set out in Section 9D of the Central E....
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.... hold that the said statements recorded during the course of investigation are inadmissible in the absence of examination-in-chief and cross-examination thereof and non-following of the procedure laid down under Section 9D of the Central Excise Act, 1944. Issue (b): Admissibility of the data retrieved from the CPUs / pen drives without adhering to the provisions of Section 36B of the Central Excise Act, 1944 17. Another issue that arises is whether the data, in the form of print outs / documents, retrieved from the CPUs, computers or pen drives, can be treated as admissible evidence against the appellants in this case, or not. We find that the said data retrieved from the CPUs, computers or pen drives were never tested in terms of Section 36B(2) and Section 36B(4) of the Central Excise Act, 1944 and therefore, the same are not admissible as evidence to substantiate the allegation of clandestine clearance of goods against the appellants. The said issue has been examined by this Tribunal in the case of M/s. Ramgarh Sponge Iron Pvt. Ltd. v. Principal Commissioner, CGST & CX, Ranchi [2024 (9) TMI 1844 (Tri.-Kol.)], wherein this Tribunal held as under:- "7.1.5. We observe....
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....ious chemicals for the month of December, 2005 and January, 2006 were found and seized during the search. The appellants disowned the contents of the printout and stated that it has manipulated the data base with motive, to take revenge from the partner and the firm for the refusal of the loan of Rs. 1 lakh sought by the Computer Operator. The appellant filed an affidavit disclosing this fact on 13-2-2006 i.e. immediately after the raid and a copy of the affidavit was also given to the investigating officer. The Central Excise officers attempted to corroborate the contents of the printout with the statements of 30 persons viz. buyers, transporters etc. The appellants requested for cross-examination of 30 persons which was rejected by the Adjudicating authority. The appellants contended that the statements are pre-drafted computer statements and it cannot be voluntary nature. After considering the submissions of the appellant, the Commissioner (Appeals) allowed the cross-examination of 4 persons randomly selected. Three of them stated that they were made to sign the pre-drafted statements on a promise that no action shall be taken against them. 8. For the purpose of proper ....
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....d removal of the goods cannot be upheld based on the printout of the data contained in the USB drive without following the requirement of condition of Section 36B of the Central Excise Act, 1944. Section 36B of the said Act provides admissibility of microfilms, facsimile copies of documents and computer printouts as documents and as evidence. Clause (c) of Section 36B(1) states that the statement contained in a document and included in a computer printout would be an evidence if the condition mentioned in the subsection (2) and other provisions contained in this section are satisfied in relation to the statement and the computer in question, shall be deemed to be the document for the purpose of this Act and the rules made thereunder and can be admissible in proceedings. Sub-section (2) of Section 35B provides the condition referred to in sub-section (1) in respect of the computer printout shall be the following viz. "(a) the computer printout containing the statement was produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period by the person ....
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....erits. The demand covering the period November, 1993 to September, 1998 is based on certain computer printout relating to the period February, 1996 to September, 1998. These printouts were generated from a personal computer of Shri G. Sampath Kumar, a junior officer of the Company, whose statements were also recorded by the department. Admittedly, whatever facts were stated by Shri Sampath Kumar, in his statements, were based on the entries contained in the computer printouts. The statements of others, recorded in this case, did not disclose any additional fact. Therefore, apparently, what is contained in the computer printout is the only basis of the demand of duty on waste and scrap. The question now arises as to whether these printouts are admissible as evidence, in this case. Ld. Sr. Counsel has pointed out that the computer print-outs did not satisfy the statutory conditions. He has referred to the relevant provisions of Section 36B of the Central Excise Act which deals with admissibility of computer printouts etc. as evidence and says that the statement contained in a computer printout shall be deemed to be a document for the purposes of the Act and the rules made thereunder ....
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....mputer printout, to show that the information contained in the printout had been supplied to the computer in the ordinary course of business of the company. We find that none of these conditions was satisfied by the Revenue in this case. We have considered the Tribunal's decision in International Computer Ribbon Corporation v. CCE, Chennai (supra). In that case, as in the instant case, computer printouts 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 the printouts were neither authenticated nor recovered under Mahazar. It was also found that the assessee in that case had disowned the printouts and was not even confronted with what was contained therein. The Tribunal rejected the printouts and the Revenue's finding of clandestine manufacture and clearance. We find a strong parallel between the instant case and the cited case. Nothing contained in the printouts generated by Sampath Kumar's PC can be admitted into evidence for non-fulfilment of the statutory conditions. It is also noteworthy that the computer printouts pertained to the period February, 1996 to September....
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....& Steel Casting Ltd. v. Additional Director General (Adjn.), Directorate General of GST Intelligence (Adjudication Cell) [Final Order No. 58546 of 2024 dated 09.09.2024 in Excise Appeal No. 55779 of 2023 - CESTAT, New Delhi]. The relevant observations of the Tribunal in the aforesaid decision are reproduced below: - "15. To examine the issues that have been raised, it would be necessary to first examine section 36B of the Central Excise Act. It is reproduced: "Section 36B- Admissibility of micro films, facsimile copies of documents and computer print outs as documents and as evidence. (1) Notwithstanding anything contained in any other law for the time being in force,- (a) a microfilm of a document or the reproduction of the image or images embodied in such microfilm (whether enlarged or not); or (b) a facsimile copy of a documents; or (c) a statement contained in a document and included in a printed material produced by a computer (hereinafter referred to as a ―computer printout). (2) The conditions referred to in sub-section (1) in respect of a computer printout shall be the following namely:- (a) the computer p....
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....ment as may be appropriate for the purpose of showing that the document was produced by a computer, (c) dealing with any of the matters to which the conditions mentioned in sub-section (2) relate, and purporting to be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities (whichever is appropriate) shall be evidence of any matter stated in the certificate; and for the purposes of this sub-section it shall be sufficient for a matter to be stated to be to the best of the knowledge and belief of the person stating it. (5) For the purposes of this section, - (a) Information shall be taken to be supplied to a computer if it is supplied thereto in any appropriate form and whether it is so supplied directly or (with or without human intervention) by means of any appropriate equipment; (b) whether in the course of activities carried on by any official, information is supplied with a view to its being stored or processed for the purposes of those activities by a computer operated otherwise than in the course of those activities, that information....
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....ns mentioned in sub-section (2) relate. 19. The Central Excise Act contains a specific provision that describes the manner in which the admissibility of computer print outs will be accepted as evidence in proceedings initiated under the Central Excise Act. 20. In respect of section 65B of the Evidence Act, which is parimateria to the provisions of section 36B of the Central Excise Act, it would be relevant to refer to the observations made by the Supreme Court in Anvar P. V. The Supreme Court, held that evidence relating to electronic record shall not be admitted in evidence unless the requirement of section 65B of the Evidence Act is fulfilled. The relevant paragraphs of the said judgment are reproduced: ...... 21. The aforesaid judgment of Supreme Court in Anvar P. V. was followed by the Supreme Court in Arjun Panditrao Khotkar vs. Kailash Kushanrao Gorantyal & others [AIR 2020 SC 4908], though with a slight modification. The Supreme Court held that if the original device is not produced, then electronic record can be produced in accordance with section 65B (1) of the Evidence Act together with the requisite certificate under section 65B (4). ....
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.... ...... 30. A hard disk is a rigid magnetic disk that stores data. A pen drive is a data storage device that includes flash memory with an integrated USB interface. 31. The printouts, which are the sole basis for holding that the appellant had indulged 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 base....