2018 (5) TMI 905 - AT - Central Excise

Clandestine removal - under-valuation - entire case has been made on the basis of the data retrieved from the laptops, CPUs, Pen drives seized from the secret office in Gurgaon - Held that - Since the entire case is based on the data retrieved by the GEQD, the issue needs to be readjudicated after examining the concerned official of GEQD in a personal hearing in the presence of the assessee or his representative for the purpose of arriving at the proper conclusion on the veracity of the data retrieved - appeal allowed by way of remand.

Summary

Issues involved:
1. Discrepancy in demand raised by the Commissioner based on retrieved data from electronic devices.
2. Validity of retrieved data and its admissibility as evidence.
3. Failure to examine the concerned official of GEQD during the adjudication process.
4. Need for reexamination and cross-examination of GEQD officials for arriving at a proper conclusion.

Detailed Analysis:
1. The appeal was filed by the Department against the Order-in Original No. 32/14-15, challenging the decision made by the Commissioner regarding the demand raised in a show cause notice. The case involved a search operation conducted by the DGCEI, resulting in the seizure of electronic devices and documents related to clandestine activities. The Commissioner set aside a significant portion of the demand, leading to the appeal before the Tribunal by both parties.

2. The main contention revolved around the validity of the retrieved data from laptops, CPUs, and pen drives, analyzed by the GEQD, Hyderabad. The Commissioner questioned the veracity of the data, suspecting tampering due to access after sealing. The Department argued that the Commissioner erred in disregarding the evidentiary value of the data, emphasizing the lack of proof of tampering and the need to consider the GEQD report's details.

3. It was highlighted that the Commissioner failed to call for the evidence of the GEQD official who retrieved the data, raising concerns about the thoroughness of the examination process. The Adjudicating Authority doubted the authenticity of the data, suggesting possible manipulation by the investigating agency. The Tribunal noted the contradiction in the Commissioner's order and the need for a more detailed examination of the facts.

4. After thorough consideration and perusal of records, the Tribunal concluded that a reexamination of the issue was necessary. The Tribunal directed the Adjudicating Authority to conduct a de novo decision after examining and cross-examining the concerned GEQD officials in the presence of the assessee or their representative. Emphasizing the importance of a fair hearing and the admission of additional evidence if required, the Tribunal allowed both appeals by remanding the matter for further adjudication.