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TMI Blog2015 (3) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... with interest and penalties on the appellants cannot be sustained. Accordingly, the impugned orders are set aside - Decided in favour of assessee. - Appeal No. E/1049-1051/2009 - Order No. A/10197-10199/2015 - Dated:- 4-3-2015 - Hon ble Mr. P. K. Das,J. For the Appellant : Shri J.C. Patel, Shri Rahul Gajera - Advocates For the Respondent : Shri K. Sivakumar, Addl. Commissioner (AR) ORDER Per: P.K. Das 1. These appeals are arising out of a common order and therefore all are taken up together for disposal. 2. The relevant facts of the case, in brief, are that M/s Ambica Organics (Appellant No.1) a partnership firm, was engaged in the manufacture of Textile Auxiliary Chemicals such as Polysol, MBX, Adhesives, Binders, UF Resin etc. They were clearing the goods without payment of duty by availing SSI exemption notification, as their clearance value was less than ₹ 1 Crore in a financial year. On 11/12.02.2006, the Central Excise Preventive Officers visited the appellant s factory and conducted stock verification and found excess stock of the finished goods valued at ₹ 83,248.00, which was seized by the Central Excise officers. The Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. He relied upon the following decisions:- a) M/s Premier Instruments Controls Pvt.Ltd. Vs CCE 2005 (183) ELT 65 (T) b) M/s Premier Packaging Pvt.Ltd Vs CCE 2005 (184) ELT 165 (T) c) M/s Tex-Age Vs CC (Exports) 2008 (221) ELT 395 (T) d) M/s Harsinghar Gutka Pvt.Ltd. Vs CCE 2008 (221) ELT 77 (T) e) M/s S.J.N. Auto Industries Pvt.Ltd. Vs CCE 2008 (231) ELT A 101 f) M/s Indo Green Textile Pvt.Ltd. Vs CCE 2007 (212) ELT 343 (T) 5. It is also submitted that the Adjudicating authority denied the cross examination of the 30 persons. The statements of the 30 persons were pre-drafted computer statements. The Commissioner (Appeals) allowed cross examination of only 4 persons which were randomly selected. After considering the nature and contents of the statements and the cross examination, the Commissioner (Appeals) has observed that the evidentiary value of the 30 statements is considered weak. He submits that it is clearly established that the statements have no evidentiary value and therefore, the demand of duty on the basis of USB drive without following the requirement under Section 36B of the Act, 1944, cannot be sustained. It is also submitted that the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended that the statements are pre-drafted computer statements and it cannot be voluntary nature. After considering the submissions of the appellant, the Commissioner (Appeals) allowed the cross examination of 4 persons randomly selected. Three of them stated that they were made to sign the pre-drafted statements on a promise that no action shall be taken against them. 8. For the purpose of proper appreciation of the case, the relevant portion of the findings of the Commissioner (Appeals) is reproduced below:- 4.5 Another contention of the appellant is that department has brought artificial evidence in the form of 30 statements from the buyer parties. The appellant stand is that the statements of the 30 parties are pre-drafted computer statements and involuntary. Four of the buyers (randomly selected) deposed before me. Three of them stated before me that they were made to sign a pre-drafted statement on a promise that no action shall be taken against them. One of them stated that his statement was voluntary. In the statements it has been recorded that these person stated that they received the textile auxiliary chemicals without invoice and against cash payments. Statement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35B provides the condition referred to in sub-section (1) in respect of the computer print out shall be the following viz. (a) the computer print-out containing the statement was produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period by the person having lawful control over the use of 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 of the kind from which the information so contained is derived; (c) throughout the material part of the said period, the computer was operation 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. Sub-section 4 of Section 36B requires issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omputer print-outs did not satisfy the statutory conditions. He has referred to the relevant provisions of Section 36B of the Central Excise Act which deals with admissibility of computer print-outs etc. as evidence and says that the statement contained in a computer print-out shall be deemed to be a document for the purposes of the Act and the rules made thereunder and shall be admissible as evidence of the contents of its original, if the conditions mentioned in sub-section (2) and other provisions of the Section are satisfied in relation to the statement and the computer in question. Sub-section (2) reads as under :- 2. The conditions referred to in sub-section (1) in respect of the computer print-out shall be the following, namely :- (a) the computer print-out containing the statement was produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period by the person having lawful control over the use of the computer; (b) during the said period, there was regularly supplied to the computer in the ordinary course of the said activities, informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture and clearance. We find a strong parallel between the instant case and the cited case. Nothing contained in the print-outs generated by Sampath Kumar s PC can be admitted into evidence for non-fulfilment of the statutory conditions. It is also noteworthy that the computer print-outs pertained to the period February, 1996 to September, 1998 only but the information contained therein was used for a finding of clandestine removal of waste and scrap for earlier period also, which, in any case, was not permissible in law. In the result, we hold that the entire demand of duty on waste and scrap is liable to be set aside. 11. Taking into consideration the overall facts and circumstances of the case, I find that the entire case was made out on the basis of statements of the buyers and the computer printout. Commissioner (Appeals) already held that the evidentiary value of the statements is weak. It is also noted that the statements of the 30 persons were mostly similarly pre-drafted. The investigating officers failed to comply with the conditions of Section 36B of the Act in respect of relying upon this computer print out. There is no adequate material available on record to establi ..... 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