2017 (7) TMI 594 - AT - Central Excise

Clandestine removal - demand - Held that - the case has been booked against the appellant on the basis of computer printouts recovered from pen drive recovered from Shri M. Jaganbabu, Production Manager of the appellant. The printouts of the pen drive were taken in the presence of panchas. The said fact has not been disputed by the appellant at any stage. Moreover, no cross examination of panchas has been sought by the appellant - as the Revenue has been able to corroborate the statement Shri Narendra Gupta with documentary evidence, the Revenue has been able to prove the case of clandestine removal of goods beyond doubt - appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against confirmed duty demand, interest, and penalties based on clandestine removal of goods; Admissibility and reliability of evidence from pen drive; Compliance with Section 36B of Central Excise Act, 1944; Timeliness of show cause notice issuance; Imposition of penalties.

Analysis:
The case involved an appeal against an order confirming duty demand, interest, and penalties on the appellants for alleged clandestine removal of goods. The facts revealed a search conducted based on intelligence, recovering a pen drive containing production data. The appellants contested the demand, arguing that the data from the pen drive, not belonging to them, lacked authenticity and did not comply with Section 36B of the Act. They cited legal precedents to support their contentions, emphasizing the need for corroborative tangible evidence.

The appellant's counsel further contended that reliance solely on the pen drive data, without recording statements from key individuals, rendered the evidence unsustainable. Reference was made to legal decisions highlighting the necessity of complying with evidentiary requirements, akin to Section 65B of the Evidence Act. Additionally, the timeliness of the show cause notice issuance was challenged, citing case law to support the argument that the notice was not sustainable.

On the contrary, the Revenue opposed the appellant's contentions, asserting that the data from the pen drive, supported by the appellant's admission, proved the case of excess production. The Director's statements acknowledging the data and production discrepancies were crucial in establishing the clandestine removal. The Revenue argued that the evidence from the pen drive, taken in the presence of witnesses, was admissible and sufficient to support the demand.

After hearing both sides, the Member (Judicial) upheld the impugned order, dismissing the appeals. The decision rested on the admissibility and reliability of the pen drive data, the Director's admissions, and the absence of substantial challenges to the evidence's authenticity. The Member deemed the evidence conclusive in proving the clandestine removal of goods, thereby rejecting the appellant's arguments against the charge and penalties.

In conclusion, the judgment affirmed the duty demand, interest, and penalties, emphasizing the evidentiary value of the pen drive data, the Director's statements, and the absence of substantial challenges to the evidence's credibility. The decision underscored the importance of corroborative evidence and timely compliance with legal procedures in adjudicating matters of duty evasion and penalties.