TaxTMI 
TaxTMI 
2026 (10) TMI 113
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....ain documents, including sales invoice files, a CD bearing the name "Moserbeer Sterling" and computer printouts, under a mahazar dated 07.03.2012. Subsequently, searches were conducted on 04.04.2012 at the corporate office and factory premises of M/s. V.V. Iron and Steel Company Pvt. Ltd. (VVISCO), Tuticorin, pursuant to information regarding alleged clearance of MS ingots without payment of duty. Certain documents and two CPUs containing data were seized and statements were recorded from its Accounts Manager. The investigation was thereafter extended to M/s. Universal Transport Services, Karaikal, the transporter of ingots from VVISCO, and to the purchasers of TMT rods, namely, M/s. Sri Kumaran Steels, Coimbatore and M/s. Indo Steel Company, Salem. Based on the materials gathered during investigation, a Show Cause Notice was issued to the appellant proposing recovery of Rs.4,08,12,318/- towards Central Excise duty and cess on alleged unaccounted clearances of TMT rods/bars to various parties during the period 01.04.2011 to 02.02.2012, along with interest and penalties. After adjudication, the Commissioner confirmed the demand with interest and imposed an equal penalty on the appel....
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....nnot be admitted in evidence without compliance with the procedure prescribed under Section 9D. E. The allegation of clandestine purchase of ingots is primarily based on the CD recovered from the Appellants' premises and computer printouts/documents obtained from M/s. V.V. Iron and Steel Company; M/s. Universal Transport Services and M/s. Indian General Hardware. Since the CD is inadmissible for non-compliance with Section 36B and the accompanying statements were not subjected to the procedure under Section 9D, the connected documents also cannot independently sustain the demand. F. The Appellants submit that the allegation of clandestine manufacture of TMT bars is founded essentially on the data contained in the CD. Once such data is held inadmissible for non-compliance with Section 36B, the allegation of clandestine production has no independent evidentiary foundation. G. The allegation of clandestine removal is likewise based substantially on the CD data and statements of two buyers recorded under Section 14. In the absence of examination of the makers in terms of Section 9D, such statements cannot be relied upon. The demand relating to 150.45 MT, base....
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....h Appellant-II signing the printouts. Therefore, the electronic data constituted seized and contemporaneously authenticated material and not merely unverified computer printouts. B. Simultaneous investigation at VVISCO resulted in seizure of invoice files and three computer CPUs containing incriminating data under mahazar proceedings dated 04.04.2013. Statements of Shri K. Saravanasamy, Manager (Accounts), Shri T.C. Amarnath, Plant-in-Charge, and Shri R. Manoj, Computer Operator, established the manner in which production, stock, sales, purchases and other operational data were maintained in the computers of VVISCO. C. The computer data recovered from VVISCO contained month-wise production, sales, stock and cost records. The statements of its employees explained the manner of creation and maintenance of such data and confirmed that the entries were made on the basis of laboratory reports, production records, invoices, weighbridge reports and other contemporaneous documents. Hence the VVISCO data independently corroborated the data recovered from Appellant-I. D. Purchase invoices of VVISCO seized from Appellant-I were compared with the Form-IV register and....
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....llant-II stated that 313.22 MTs received from VVISCO had been accounted for, examination of the Form-IV register disclosed that only 271.17 MTs had actually been accounted for. Two consignments of 16.39 MTs and 25.66 MTs received on 21.12.2011 were not accounted for. Appellant-II did not retract his statement dated 17.07.2013. J. The vehicle numbers appearing against accounted clearances in the Appellant's records corresponded with the transporter's computer records. Similarly, several unaccounted clearances appearing in the Appellant's CD corresponded with the vehicles of Shri Maria Antony Cruz Jegan and with the sales data recovered from VVISCO. Shri Jegan also confirmed that the relevant clearances had been made through his vehicles. Thus, the CD data of Appellant-I, VVISCO's computer data and the transporters' records mutually corroborated each other. K. The VVISCO sales records specifically contained three August 2011 clearances described as "Cash sales @ Rs. 32000/Ton". These receipts were not accounted for in the Appellant's records. The unaccounted MS Ingots received by Appellant-I from VVISCO were found to be 100.91 MTs in August 2....
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....suppressed the quantity and value of clearances even when compared with its own statutory VAT records. Q. The clandestine receipt of MS Ingots and manufacture and removal of TMT Bars cannot be examined by isolating the computer printouts from the remaining evidence. The seized CD is corroborated by purchase invoices, Form-IV records, VVISCO's computer data, statements of VVISCO employees, transporter records and statements, evidence of the trader, statements of purchasers, weighment slips, ER-1 returns and VAT returns. R. The purchase data in the CD reflected approximately 12,136.97 MTs of Ingots as against 3,159.195 MTs reported in the relevant statutory returns. Similarly, production recorded in the CD was approximately 9,047.264 MTs as against 2,939.865 MTs reported in ER-1 returns, even without complete data for certain months. These substantial quantitative discrepancies, coupled with the corroborative evidence, establish clandestine manufacture and removal. S. On the cumulative evidence, Appellant-I clandestinely received MS Ingots from VVISCO without payment of duty, suppressed their receipt and used such Ingots for manufacture of TMT Rods/Bars....
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....Excise Act], is mandatory. However, there is no straitjacket formula to arrive at the conclusion of such due compliance. Deviation from a prescribed certificate format does not invalidate it when the authenticity of the documents is undisputed. It also relies on the following decisions: M/s AG Impex Vs Commissioner of Customs, New Delhi [2024 (9) TMI 1257-CESTAT New Delhi]; Shri T.N. Malhotra and M/s S.R. Bristle Products Pvt. Ltd. Vs Pr. Commissioner of Customs, New Delhi [2024 (6) TMI 202-CESTAT New Delhi]; Shri Ulaganayagi Ammal Steels Vs CCE, Trichy [2008 (231) ELT 434 (Tri.-Chennai)]; and M/s Copier Force India Ltd. Vs CCE, Chennai [2008 (231) ELT 224 (Tri.-Chennai)]. V. With regard to the evidentiary value and admissibility of statements under Section 9D of the Central Excise Act, 1944, the Revenue relies upon the judgment of the Hon'ble Supreme Court in M/s G.T.C. Industries Ltd. Vs Collector of Central Excise [2023 (384) E.L.T. 239 (S.C.)]. In the said judgment, the Hon'ble Supreme Court upheld the constitutional validity of Section 9D(2) and held that its invocation requires the competent authority to form a reasoned opinion, based on the material on record, that ....
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....requirements prescribed under Section 138C of the Customs Act, 1962, which is pari materia with Section 65B of the Evidence Act, 1872. Thus, an electronic record cannot be relied upon merely because it exists or has been produced. The statutory requirements governing its admissibility must first be satisfied. The distinction between admissibility and probative value is important. Admissibility concerns whether the evidence is legally receivable and capable of being considered, whereas its probative value or evidentiary weight concerns the extent to which, once admitted, it can safely be relied upon for determining the facts in issue. In Bhogilal Chunilal Pandya Vs State of Bombay [AIR 1959 SC 356], the Hon'ble Supreme Court recognised that admissibility is distinct from the weight to be attached to evidence once admitted. The ultimate question, however, is whether the material on record establishes the fact alleged. In Rajesh Yadav and Anr. Vs State of U.P., [(2022) 12 SCC 200], the Hon'ble Supreme Court held that the concept of "proved" lies at the heart of the law of evidence and requires the Court to determine the existence of a fact on the basis of the matters before it and the....
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...., the electronic data, including the alleged purchase, production and sales figures contained therein, is discarded from consideration. 9. However, the treatment to be accorded to a statement recorded under section 108 of the Customs Act is different. A statement recorded during investigation is a distinct piece of admissible evidence, and its evidentiary or probative value must be examined independently. In IVRCL Infrastructure & Projects Ltd. Vs Commissioner of Customs, Chennai [2015 (319) E.L.T. 194 (S.C.)], the Hon'ble Supreme Court reiterated the settled position that statements recorded by an officer of Customs under Section 108 of the Customs Act, 1962 are admissible in evidence. Referring to its earlier decision in Gulam Hussain Shaikh Chougule Vs S. Reynolds, Superintendent of Customs, Marmagoa, [(2002) 1 SCC 155 / 2001 (134) E.L.T. 3 (S.C.)], and the authorities cited therein, the Court held that the relevant inquiry is whether the admissions were made voluntarily. Examining the issue before them the Hon'ble Court held that the statements of the individuals remained unretracted and there is nothing on record to indicate that they were involuntary. Accordingly, the reli....
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....nd circumstantial evidence and no prejudice is demonstrated. 11. It is trite law that decisions of the jurisdictional High Court as cited above, are binding upon the Tribunal functioning within its territorial jurisdiction. In East India Commercial Co. Ltd., Calcutta Vs Collector of Customs, Calcutta, [1983 (13) E.L.T. 1342 (S.C.)], the Hon'ble Supreme Court held that, having regard to the powers of a High Court under Articles 215, 226 and 227 of the Constitution, the law declared by it is binding on all authorities and tribunals within its supervisory jurisdiction and cannot be disregarded either while initiating proceedings or adjudicating rights. 12. The Hon'ble Delhi High Court in M/s. Vallabh Textiles Vs Additional Commissioner, Central Tax, GST, Delhi East & Ors., W.P.(C) No.4576/2025, dated 09.04.2025, has likewise held that cross-examination is not an absolute right in every case. The requirement depends upon the facts and circumstances and the person seeking such opportunity must demonstrate the prejudice which would be caused in its absence. The Court further observed that a blanket request to cross-examine all persons whose statements were recorded cannot be su....
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....records. The statements of the persons connected with VVISCO, the transporters and the purchasers contain specific references to the movement, supply and receipt of MS ingots/TMT products and, in material particulars, corroborate the allegation of unaccounted transactions. 16. Of particular significance is the statement of Shri C. Saravanan, Managing Director of the appellant, dated 17.07.2013. In that statement, he acknowledged receipt of substantial quantities of material from VVISCO and made a distinction between quantities accounted for and quantities not accounted for. He also explained the manner in which payments were made. Though the appellant has subsequently sought to explain or qualify the statement, there is no contemporaneous retraction establishing that the statement was involuntary or obtained by coercion. 17. The statements of the persons connected with VVISCO and the transporters also provide independent evidence regarding the supply and transportation of material to the appellant. The statement of the proprietor of India General Hardware, in particular, contains an admission regarding his role in arranging supplies from VVISCO to the appellant without corres....