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TMI Blog2007 (11) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured by HSGPL were sold to the sole agent M/s Patel Brothers upto 1999. After 1999, the sole selling agent of HSGPL became M/s Anju Agencies, a proprietorship concern owned by Smt. Anju Singh. She is sister-in-law of Shri Mahesh Singh. The goods manufactured by HSGPL were sold to various dealers by sole selling agent M/s Anju Agencies after 1999. M/s Mahesh & Company is a trading firm whose proprietor is Shri Mahesh Singh who is also the Managing Director of HSGPL. M/s Mahesh & Company deals in supari & katha which are principal raw materials in manufacture of gutka/pan masala. M/s Gopal Grinding Industries processed the raw materials namely, supari, katha and cardamom etc. All the processed material is sent to HSGPL for use in the manufacture of pan masala and gutka. The proprietor of M/s Gopal Grinding Industries is Ms. Rajni Singh, the sister of Shri Mahesh Singh. Shri K.N. Singh is the father of Shri Mahesh Singh. He was manufacturing Harsingar brand pan masala and gutka prior to HSGPL's coming into existence. He is the owner of brand name "Harsingar". M/s Flex Industries Limited is manufacturers of packaging materials namely laminated 'rolls, which are supplied to HSGP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules was proposed against 50 other commercial concerns/persons who abetted the clandestine manufacture and removal of excisable goods by HSGPL. (ii) Show cause Notice No. IV-CE(9)CP/34/201/9793-9812 dt. 26-6-2002 demanding duty of Rs. 12.90 lacs on seized goods. (iii) Show cause notice No. IV-CE(9)CP/34/2001/Pt.II/16444 dated 11-12-2002 proposing confiscation of the vehicles allegedly used in transport of illegally cleared goods. Penal provisions were invoked for 13 notices comprising of vehicle owners and Drivers of vehicle used in the alleged clandestine transportation of pan masala/gutka. The adjudicating authority has decided all the issues arising out of the above mentioned show cause notices in the impugned order. 4. In terms of the impugned order, the demand of duty from HSGPL is Rs. 1,37,63,64,527/- only. Equal penalty under Section 11AC read with Rule 173Q of Central Excise Rules, 1944/Rule 25 of Central Excise Rules, 2001 has been imposed. A penalty of Rs. 10 crore has been imposed on Shri Mahesh Singh, Managing Director of HSGPL under Rule 209A of Central Excise Rules, 1944/Rule 26 of Central Excise Rules, 2001. Further penalty of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; Ram Pal Jaiswal, dealer of M/s Harsinghar Gutka Pvt. Limited (xvii) Amitabh Chaurasia, Prop, of Sri Ram Trading Co. dealer of M/s. Harsinghar Gutka Pvt. Limited 6.2 S/Shri Bipin Garg, Advocate and Sh. AtuI Gupta, CA, appeared for the following appellants. (i) M/s. Awadh Wood Products (ii) Shri Rajendra Kumar Maheshwari, Partner of M/s Awadh Wood Products. 6.3 Shri Anurag Mishra, the learned Advocate appeared for the following appellants. (i) M/s AVS Rotopack Pvt. Ltd., (ii) Sh. Ambrish Kumar Chaurasia. 6.4 Shri Kapil Vaish, Chartered Accountant, appeared for the following appellants. (i) M/s. Indian Wood Products Ltd. (ii) Sh. R.K. Agarwal, employee of M/s. Indian Wood Products Ltd. 6.5 Shri R.K. Hasija, Advocate for M/s. Lakshmikiamaran & Sridharan appeared on behalf of the following appellants. (i) M/s. Flex Industries Limited (ii) Sh. Ashok Chaturvedi (iii) Sh. A.P. Singh (iv) Sh.. Anil Sharma (v) &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 72 invoices. The reconstructed data were from the computers seized from M/s. Anju Agencies and M/s Patel Brothers and not from the main appellant M/s. HSGPL. There is no mention either in the show cause notice or in the impugned order that the quantity involving the huge demand of Rs. 63.97 crores was purchased by whom who were the buyers, how they paid for the goods, how such huge amount of cash was received by M/s. Anju Agencies or M/s Patel Brothers. There is absolutely no basis or material or evidence of any nature whatsoever to assume 70 bags per invoices and calculated the duty liability in all those cases were the invoices indicated one to five bags. 8. Another demand of Rs. 30.31 crore has been made based on reconstruction of old deleted destroyed data from the computer hard disk seized from the premises of M/s. HSGPL, M/s. Anju Agencies, M/s. Gopal Grinding Industries, M/s Mahesh & Co. and M/s. Sanathan Cold Storage on 4-7-2001. The department has taken the help of M/s. Steller Information Systems Limited for retrieval of deleted data. The learned Counsel for the main appellant expressed very serious doubts about the authenticity of the retrieved data. He urged that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the computer; (b) during the said period there was regularly supplied to the computer in the ordinary course of the said activities, information of the kind contained in the statement or of the kind from which the information so contained is derived; (c) throughout the material part of the said period, the computer was operating properly or, if not, then any respect in which it was not operating properly or was out of operation during that part of that period was not such as to affect the production of the document or the accuracy of the contents; and (d) the information contained in the statement reproduced or is derived from information supplied to the computer in the ordinary course of the said activities". 10. The short point is that a computer print out would be admissible in evidence, only if the said print out was produced by the computer during the period over which it was used regularly to store or process information. In other words, the important point is that the print out should have been produced when the computer was in regular operation. In the present case, it is not in dispute that the print out or the R-documents is a reconstructed data an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paring such invoices entering lesser quantity and deletion of the entries in the computer is done only on the instruction from Mr. K.N. Singh Patel. Total quantity of the material is always delivered to the party but only an invoice of one bag is kept in the records and the transportation copies destroyed and the original transportation invoice is deleted from the hard disk of computers computer of M/s Harsingar & Anju Agencies''. 12. Shri Rastogi, learned Counsel for the Revenue took us through the statements of S/Shri Amit Kumar Srivastava, Sh. S.S. Bajpai, Kumari Rajni Patel etc., and urged that the entire thing should be viewed in totality to arrive at the proper conclusion. He further drew our attention to the statement of Shri Mahesh Singh and stated that with regard to incriminating statements made by others, Shri Mahesh Singh accepted the facts and therefore, there is very clear admission of evasion of duty. 13. The learned Counsel for the Revenue invited our attention to 32 loose sheets covering the period from 16-5-2001 to 31-5-2001 and said that the factory normally worked in two shifts. He also invited our attention to the statement of Shri Pandey, Superviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GPL. It is contended by the appellant that there is nothing to show from whom alleged quantities were purchased and who paid for it and how it was paid. There were no details of any payments made to supplier of supari. Moreover, documents were not of the appellants and there is nothing to show any delivery to the appellant. As the major portion of the above demand is based on reconstructed computer data, this demand is also hit by the non fulfillment of conditions of Section 36B of the Central Excise Act, 1944. Another point made by the learned Counsel for the appellant is that the entire demand of Rs. 137 crores consists of multiplicity of demands on the same clearance. It is argued that the main raw material, for the manufacture of pan and gutka is supari. Therefore, if there is a demand based on the sales by M/s Mahesh & Company of supari to the appellants, then there cannot be another demand based on the records of M/s. Gopal Grinding Industries because only uncut supari is purchased from M/s. Mahesh & Company and this supari is sent to M/s. Gopal Grinding Industries for cutting. Therefore, any demand based on the records of M/s. Gopal Grinding Industries would already be conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. v. CESTAT, Bangalore - A.P. High Court (iii) 2005 (188) E.L.T. 16 - Ramakrishna Sales Pvt. Ltd. v. UOI - Delhi, High Court (iv) 2006 (201) E.L.T. 256 - Micro Village Communications Pvt. Ltd v. CC, CESTAT. 18. The learned special Counsel for the department pointed out that in a case like this it is difficult to attain mathematical precision. He said that the retrieved data contained in the R-document cannot be dismissed as the department has employed the services of renowned company in retrieving the data and its credibility cannot be just ignored. He said that the statements of various persons coupled with the reconstructed data clearly indicate huge evasion and in terms of recently decided case by the larger bench the appellant is liable mandatory for equal penalty. He cited case laws to show that in a case like this it is not necessary to provide evidence for the receipt of each raw material. He cited many case laws to show that the appellants are liable for penalty under Section 209A. 19. We find that duty of the huge demand of Rs. 137.63 crores, a major portion to the tune of approximately Rs. 135 crores is based on the reconstructed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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