2019 (11) TMI 122 - HC - Central Excise

Clandestine removal - SS Ingots - cross examination of the witnesses - production capacity of respondents - matching of actual production with electricity consumption and fuel consumption - Section 35H of the Central Excise Act, 1944 - HELD THAT - It appears that there are allegations about production capacity of the respondent. As per Department appellant, production capacity of the respondent of SS Ingots is 13,580 MT per annum whereas as per respondent and the evidences led by the respondent with the help of Engineer Certificate dated 1st July, 2008 the production capacity of the respondent of SS Ingots is 1963 MT per annum. There are allegations and counter allegations about the DG Set transformers and the crucible furnaces. Be that as it may, the fact remains that the order passed by the CESTAT is on appreciation of the evidences on record and this appellant is in search of re-appreciation on record. Hence, it cannot be said that any substantial question of law is involved - Much has been argued out by the counsel for appellant about the procurement of the documentary evidences like a kutcha receipt of sale from the computer which was found in custody of Mr. Sahu. There is already an appreciation of facts done by CESTAT while pointing out that this appellant has failed to prove the production of SS Ingots, sale of SS Ingots and procurement of the raw material. So far as procurement of the raw material is concerned, there is no convincing evidence on record, as stated by CESTAT which requires interference by CESTAT to the Order-in-Original dated 10th October, 2013 and therefore, we see no reason to re-appreciate those evidences on record. This appellant has failed to prove the clandestine removal of the final product. Even otherwise, all the arguments of this appellant is based upon re-appreciation of the evidence by the CESTAT. The CESTAT is the final fact finding authority, and in matters such as this, an appeal lies, from the final order of the CESTAT, to this Court, only on substantial questions of law. Matters involving appreciable evidence ordinarily, would not involve substantial question of law, as this Court, in exercise of its powers conferred by Section 35H of the Act, is not empowered to re-appreciate evidence, which has already been appreciated by the CESTAT. There is nothing to indicate compliance with the strict stipulations contained in subsections (1) and (2) of Section 36B of the Act in the present case. There are no reason to interfere with the findings of the CESTAT regarding non-compliance of Section 36B of the Act either - there are no substantial question on law is involved in this Central Excise Appeal - appeal dismissed.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Allegations regarding the production capacity of SS Ingots.
3. Cross-examination of witnesses.
4. Admissibility of computer printouts under Section 36B of the Central Excise Act.
5. Evidence of clandestine removal of excisable goods.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The application for condonation of delay of 127 days in filing the appeal was allowed. The court found reasonable grounds for the delay based on the reasons stated in the application and thus condoned the delay.

2. Allegations Regarding the Production Capacity of SS Ingots:
The Department alleged that the respondent had a production capacity of 13,580 MT per annum, while the respondent, supported by an Engineer Certificate dated 1st July 2008, claimed a capacity of 1963 MT per annum. The CESTAT had earlier directed the Commissioner to ascertain the production capacity, match actual production with electricity and fuel consumption, and seek technical opinion. The Commissioner, in remand proceedings, found the Department's evidence unsatisfactory and dropped the proceedings against the respondents. The CESTAT upheld this finding, noting that the Department's projection of production capacity was inflated and unsupported by technical opinion.

3. Cross-Examination of Witnesses:
The CESTAT had directed the cross-examination of several witnesses whose statements were relied upon by the Department. The Commissioner allowed these cross-examinations, which revealed that the witnesses could not provide corroborative evidence of supplying scrap to the respondent. The CESTAT found that the statements of co-noticees could not be relied upon without independent corroboration, and the cross-examinations did not substantiate the Department's claims.

4. Admissibility of Computer Printouts Under Section 36B of the Central Excise Act:
The CESTAT and the Commissioner both found that the computer printouts retrieved from the residence of Mr. S.K. Sahu did not meet the conditions specified in Section 36B of the Act. The court upheld this finding, noting the mandatory nature of the provisions and the lack of evidence showing compliance with the conditions required for the admissibility of computer printouts.

5. Evidence of Clandestine Removal of Excisable Goods:
The Department failed to prove the clandestine removal of SS Ingots. The CESTAT noted the lack of convincing evidence regarding the procurement of raw materials and the production of SS Ingots. The court found no reason to re-appreciate the evidence already considered by the CESTAT, emphasizing that the CESTAT is the final fact-finding authority and that appeals to the High Court should only address substantial questions of law. The court concluded that the appreciation of evidence by the CESTAT was not perverse and did not warrant interference.

Conclusion:
The court dismissed the appeal, finding no substantial question of law involved. The findings of the CESTAT were based on a thorough appreciation of evidence, and the Department's arguments largely sought re-appreciation of this evidence, which is not permissible under Section 35H of the Central Excise Act.